the gist: retirement accounts aren’t investments. they’re tax wrappers.

what you put inside them (index funds, etfs, etc.) is the investment.

when you hear retirement account, think: a special container that tells the irs how and when it gets paid.

this is the retirement account you get through work.

a quick tidbit on matching: always contribute enough to get the full employer match. anything less is like telling someone you don’t want the free lunch they’re offering you, which is just socially unacceptable.

another quick tidbit on employer match vesting: your employer’s match isn’t always your immediately. many companies use a vesting schedule, which means you only keep the employer-contributed money if you stay with the company for a certain amount of time.

your own contributions, however, are always yours. vesting rules only apply to the employer match.

these are retirement accounts you open yourself, outside of work.

these are limits on what you can contribute to these accounts set by the irs. these contribution limits apply to all retirement accounts and vary based on the account.

this order tends to be a pretty solid default.

retirement accounts don’t invest your money automatically.

you still need to choose investments inside them, such as index funds, etfs, or target date funds (um…I will opt to not get on my soapbox about these for brevity).

key distinction: you are generally only penalized for withdrawing gains early, not contributions, especially in a roth ira.

roth ira contributions can be withdrawn at any time and are penalty-free. withdrawing earnings early usually triggers taxes + a 10% penalty.

early withdrawals from traditional iras and 401ks usually mean taxes + a 10% penalty. there are exceptions, but the rules are stricter.

if your income is above the irs limit, you can’t contribute directly to a roth ira. the workaround is called the backdoor roth. you can read more about that here. it’s legal, common, and not scary.

for brevity, here are topics I’d love to cover, but people tell me this is getting long:

for the past few months, I’ve been trying to find the middle ground between restriction and recklessness.

I want to enjoy the money I’m earning…not in a radical self-love, “treat yourself” kind of way, but in a very practical one. I’m in my 20s. I’m young, fun (hopefully, increasingly so), and it would be silly to pretend that future-me is the only one worth spending money on.

at the same time, I have this lingering fear that if I loosen my grip too much, everything will spiral. that one day I’ll wake up as a completely different person with maxed-out credit cards and no idea how I got there.

part of being a recovering frugal is pushing myself to spend more than I used to (because, trust me, that was painful to watch and immensely embarrassing in hindsight). and, honestly, I didn’t know how to spend my money, even if I wanted to.

so, the question I’ve been sitting with lately isn’t whether to inflate my lifestyle, but where to do it and, just as importantly, where not to.

because of that, I’m hyper-aware of the difference between spending because something genuinely improves my life and spending just ~because I can~.

what’s helped is shifting the goal from “never let lifestyle creep happen” to something simpler: minimizing regret (a subtle nod to an early mentor of mine that once told me to make decisions based on optimizing for the least amount of regret).

but when it comes to the bigger, recurring upgrades, I’m trying to be more intentional by choosing a few areas to intentionally grow and letting the rest stay exactly where they are (for example, I still refuse to spend a penny on streaming subscriptions).

the takeaway isn’t to fear lifestyle creep or to keep my life artificially small by sweeping all spending. it’s to inflate my lifestyle on purpose, in ways that actually match ~the life I want~ (insert woo woo me) and to trust that enjoying money now doesn’t automatically mean losing control later.

here’s the thing: I’m a big believer that saving/investing should be the first line item in your “budget". not because it’s morally superior, but because it creates structure. (this is not novel and I take no credit for this idea, lol).

it’s not uncommon to be taught to approach saving like a rule you must follow to be a “good” person. sort of like saving as if it’s a moral obligation (especially, again, when you grow up in middle-class, midwest, suburban bliss environment). and while this has many positive benefits, it’s also what leads people to feel guilty the moment they want to spend their money, because this is the opposite of what a “good person” does. see the issue?

so, here’s the framework I use to treat saving/investing like a function of goals and timelines, rather than a virtue. I start with these three questions:

once you answer those three questions, you’ve already solved most of the problem.

enough to fully fund the goals you’ve defined on the timeline you’ve set.

when the goal is funded or when the timeline changes.

at that point, you don’t need to keep saving “just because”. you can redirect that money, pause contributions, or let it flow into spending.

bankrate.com has simple calculators that let you plug in a target amount and timeline and tell you exactly what you need to set aside each month.

if you start with goals, then what you can spend each month becomes obvious.

saving should be purposeful. and, once the purpose is met, you can move on.

there’s a tension that exists between choosing and staying.

to choose is to commit. to stay is to endure. both carry weight and both create stories we feel obligated to internalize.

once time or energy has been invested, walking away feels like a waste.

and then the sunk cost fallacy enters the picture. we feel responsible for our contributions and bound by our commitments.

so, staying is praised as strength and persistence becomes our moral compass. leaving requires justification.

over time, commitment becomes identity and decisions stop being something to be made and starts being something we are.

in this way, reversal feels less like a correction and more like contradiction.

permanence is mistaken for seriousness and endurance becomes evidence of virtue.

within this framework, indecision feels safer than action.

not choosing delays responsibility. it preserves possibility. it avoids the moment where a direction must be owned and later, perhaps, revised.

but indecision carries its own cost.

time continues. circumstances change. what is left undecided does not remain untouched. the absence of decision still shapes the outcome.

most decisions, in practice, are reversible.

the more expensive commodity is time, time spent waiting for certainty that never comes.

perhaps the deeper issue isn’t fear of choosing poorly, but the belief that a decision must justify itself forever in order to have been worth making.

maybe the decision worth honoring is making one at all?

I bought a house! more to come on this in the next newsletter :)

also, this month, I am introducing the ~free~ 15-minute call to get more of my two cents. the goal here is to create a space where you can ask the more specific “okay but what about this?” questions.

you know that question people always ask growing up: “what would you do if money didn’t matter?” for me, it’s this. so I’m trying the thing I’d do if money didn’t matter and, because of that, I’m offering it for free :)

if you’re interested, let me know here!

thanks for being here. if this resonated, share it with someone who’d find it useful :)

see you at the end of february,

aaliyah aramjoo

disclaimer: this is not financial advice or otherwise affiliated with kcrise fund.

did someone forward this newsletter to you?