Alex is 25 years old and he is about to start his first full-time job. He is currently single and he is willing to take the appropriate risk he needs to prepare for retirement. His starting annual salary is $55,000 and he has no retirement savings yet. His employer will match 100% of his contributions up to the first 3% of his salary to the company’s 401(k) account.
1. What amount should Alex should be saving each year?
2. How much of the total annual savings should he be saving in his 401(K), a Traditional IRA, and a ROTH IRA?
3. Why did you pick each amount?