Account Prioritization

Thanks to the wonderful Amelia for making it pretty.

Here you will find the accompanying visual aid for one of the podcast episodes (#11) about which investment accounts should be in your arsenal. A couple notes.

401(k) is a specific type of retirement account. However if your employer offers a 457, TSP, or 403b then those plans are similar to the 401k and work nearly the same.

Listen to the podcast for specifics on HSAs.

EVERYONE should have an IRA. Do your own research to decide on if you want Traditional or Roth, but get ONE OF THEM.

Money in your retirement accounts can be accessed before 59 1/2 of age but it generally takes 5 years to do so without penalty. There is what’s called a Roth ladder, where you take your 401k, roll it into a traditional IRA, and then convert those balances to Roth money. However, once in that Roth account, that money has to mature for 5 years, Then you can access it without penalty. So if you plan to Retire Early, you have to formulate a plan for those 5 years. Taxable brokerage is one option and probably the most efficient. However you could just use CDs or Cash if you plan well enough. Just make sure you plan for those first 5 years before the Roth Ladder starts being accessible.

I highly encourage you to listen to the podcast episode about FI accounts for an in depth look. Available wherever you get your podcasts.