Tong Family

If you can, you should make your Health Spending Account contributions. They are $3650 for 2022 (or so) and $3850 for 2023 for individuals. Basically, this is pre-tax money you put into an account and then you can actually invest this money, so if you are just starting out, then this just grows and grows for that rainy day when you will need it. There is a $1,000 addition you can make if you are over $55. And it is $7,750 for families so that is even better.

And remember they have this rule that you can contribute for last year as long as you do it before April 15. You have to have your company set this up, so this is one thing to ask about.

The same is true with IRA and 401(k) which are complicated, there are Roth IRAs and Traditional ones too. The long and short of it, is that you do need to be employed, but basically a 401(k) is a retirement account that is pretax. It follows you in your job and sometimes your employer makes a contribution to you. These are taxed when you use the funds, so they work well if your tax rate is high now and when you retire they will shrink.

The Roth IRA is not employee based, you just set this one up and the difference is that it you use taxable dollars on the way in, but it is tax-free on the way out. So this makes sense if you are just starting out and your tax bracket is low and you will be rich at the end when your bracket is high. The limits are $6,500 under 50 and $7,500 over 50. However, you can only do this up to the limit of your earned income