Retirement Planning for IB Analysts

I think you're already in a good spot considering you're thinking about this now. Here are my two cents, as someone who's tried planning, then replanning, then rereplanning, and recently even more rerereplanning.

Tax-advantaged accounts:

• Makes sense to max out 401K and Roth IRA if you're comfortable with a high savings rate, though I imagine you wouldn't be in a place to do that if you're planning on living in NYC and enjoying your youth at least a bit. I think maxing out 401k would get you to ~20% contribution, slightly above what you mentioned.

Non-tax advantaged accounts:

• Build up a HYS cash account with a few months of living expenses. Most people will tell you ~3 months is good, but I strongly advise getting to ~6-12 months. Realistically, this will be largely funded by your bonus after the first year. The difference between 3 months and 12 months of living expenses wouldn't mean that you can be out of job for a year, it just means that if you decide to take a break between jobs, or get laid off, you'll have a much more relaxed time recruiting (or YOLO traveling) and won't have to go for the first good-enough offer. Before I get MS-spammed, I fully realize this is a heavier cash allocation than most people would advise but I'm just sharing learnings from personal experience and that of peers.

• Automate monthly deposits into a saving/investing account where you can either load up on low cost ETF's or build an allocation that suits you.

• Throw $1-10k into a TD/Robinhood account, it's a relatively small sum and you can have something to chat about with the rest of the industry morons who're trying to make YOLO plays in hopes of making it rich and leaving banking. This is less of an asset allocation, and more of a "lottery ticket"/"fun expense." Obviously do so in line with the compliance rules at your firm.

Other approaches I've seen work:

• Throw most of your paycheck into a savings/investment account and keep what you need to pay your monthly rent & expenses.

• Throw ~all of your paycheck into a savings/investment account and "pay yourself" (assuming transfers are free) from your savings account what you need to maintain your lifestyle. This is an attempt to mitigate lifestyle creep during promotions and salary bumps.

• Throw most of your paycheck into a savings account, and use your bonus to max out retirement accounts. (I personally prefer smaller pay checks and slightly larger cash bonus payout, but I think many people do the opposite.)

Counterpoint:

• Allow yourself to splurge on things and experiences that will create lasting memories/spark joy

• This might not matter out of undergrad, but having a decent place in close proximity to the office has a very high ROI for your lifestyle compared to incremental dollars spent. You can accomplish this with roommates in NYC, but a long-term girlfriend who contributes to rent will do wonders since you can live in a one bedroom together.

• Consider at least some minimal form of disability insurance. There is no denying that the job is stressful, and it can take a toll on one's mental and physical health. I have seen people leave their high-paying jobs to deal with health issues and then rerecruit for more chill jobs. While many had savings to get them through the times, the last thing you want when dealing with stress-induced health issues is more financial stress.

• Be prepared for your long-term plans to require potentially dramatic adjustments. Business school, engagement, and home purchase would all require you to reassess your situation.

• Cheesy shit that bears repeating: invest in yourself. Figure out what that means for you (education, hobbies, travel), and allocate discretionary spending for this accordingly.