As much as I hate to send you to Reddit, the r/personalfinance flowchart is hard to beat for most people. I’d recommend you start there to make sure you’re not overlooking something like your emergency fund.
For the most part you can follow it. Pay down debts, save what you can, make a budget but it gets wonky when you hit 401K, IRA and healthcare
Problem is each country in the EU is different. What works for Germany may not work for the Netherlands or Denmark.
As an Aussie I substituted it’s and 401K with our pension equivalent called Superannuation. The healthcare is different in AU. Here in Europe it isn’t too different to AU, replace 401K and IRA are private pension or one offered through an employer.
I looked around a bit, and while I couldn’t find a drawn flowchart for the EU, r/EUpersonalfinance has a page on their wiki inspired by(links to it too) the US flowchart and accompanying text.
I hate to plug reddit as well, but here is the link.
Is there a reason to focus on 401k (beyond the employer match) before HSA? Isn’t HSA more tax savings advantageous, even if just limited to health care expenses?
I’m not certain why they have HSA after 401k and IRA, but some possible things I can think of:
HSAs can be harder to take advantage of of the triple tax benefit if you’re retiring early (that is, still younger and healthier)
HSAs probably have worse investment options than an IRA
Allowing the user to optimize their Roth vs Traditional mix
Again, I don’t really know because you’re right about the HSA triple tax advantage making it seem better than IRA or 401k, but I’m sure there was a reason given if you care to trawl the subreddit.
Financial advice will always be intrinsically linked to fiscal advice, and that will vary with jurisdiction. Where I live we have no 401k or medical debt, but we have other debt and investment instruments with preferential tax treatment.
As much as I hate to send you to Reddit, the r/personalfinance flowchart is hard to beat for most people. I’d recommend you start there to make sure you’re not overlooking something like your emergency fund.
This is awesome! Would love to see a version for EU too!
For the most part you can follow it. Pay down debts, save what you can, make a budget but it gets wonky when you hit 401K, IRA and healthcare
Problem is each country in the EU is different. What works for Germany may not work for the Netherlands or Denmark.
As an Aussie I substituted it’s and 401K with our pension equivalent called Superannuation. The healthcare is different in AU. Here in Europe it isn’t too different to AU, replace 401K and IRA are private pension or one offered through an employer.
I looked around a bit, and while I couldn’t find a drawn flowchart for the EU, r/EUpersonalfinance has a page on their wiki inspired by(links to it too) the US flowchart and accompanying text. I hate to plug reddit as well, but here is the link.
spoiler
https://www.reddit.com/r/eupersonalfinance/wiki/basics/?utm_medium=android_app&utm_source=share#wiki_general_graphical_version
(I’m not near a desktop, so can’t really copy and paste the info here with functional hyperlinks.)
Link is broken for me over on infosec.pub.
Link is broken for me when I try opening it in a new tab. Something is up with imgur.
Is there a reason to focus on 401k (beyond the employer match) before HSA? Isn’t HSA more tax savings advantageous, even if just limited to health care expenses?
I’m not certain why they have HSA after 401k and IRA, but some possible things I can think of:
Again, I don’t really know because you’re right about the HSA triple tax advantage making it seem better than IRA or 401k, but I’m sure there was a reason given if you care to trawl the subreddit.
Not really if you exclude the employer match from consideration.
Can’t retire on it I guess
*Utterly irrelevant for most people
Sorted that for you. What the hell is 401k, Roth, medical debt?
Financial advice will always be intrinsically linked to fiscal advice, and that will vary with jurisdiction. Where I live we have no 401k or medical debt, but we have other debt and investment instruments with preferential tax treatment.
The main line of the flow chart is sound.