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Investment Decision Tree

1,298 Views | 10 Replies | Last: 3 yr ago by RockOn
YouBet
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AG
Anyone happen to have the investment decision tree pic handy they can post? I've searched online for too long and flat out can't find it.

Basically, it's the one that flows you through when to invest in 401k, IRA, HSA, taxable accounts, etc. Want to pass it onto some friends who are new to investing.

Thanks.
Topher17
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AG
YouBet
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AG
Thank you!!!
Diggity
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AG
don't a lot of folks on here recommend maxing out HSA before filling up the 401K?
Brian Earl Spilner
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AG
401k up to employer match should always be #1. Then HSA. Then max 401k.
Diggity
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AG
right. this flow chart seems to reverse the last two
Topher17
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AG
I read it as saying to save 15% for retirement, then max HSA, then max 401k. Not necessarily max 401k before HSA.

I've always gone by:
1. Get your match
2. Max Roth
3. Max HSA
4. Max 401k

Regardless of exactly how you choose to do it, I think the flowchart above is a great tool for anyone new to personal finances.
Diggity
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AG
my understanding was maxing HSA before Roth was the way current wisdom.

Is that incorrect?
Topher17
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AG
Diggity said:

my understanding was maxing HSA before Roth was the way current wisdom.

Is that incorrect?
I think it is generally personal preference. HSA has better tax advantages for sure, so that wouldn't be the wrong choice by any means.
YouBet
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AG
You could argue that you could elevate Max HSA above Max Roth because of it's added flexibility to cover medical expenses in present day. If you don't actually use it for medical expenses then maybe it's a coin toss between maxing Roth first or maxing HSA first.

OTOH, investment options in your HSA are also probably limited compared to your Roth so you might want to do Roth first in that scenario to take advantage of a particular sector or market right now vs later.
Diggity
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AG
thanks
RockOn
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Just max both, its not that much.
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