I agree with a lot of what Clint said, but as somebody who works in financial services I'll add my advice. First- at 25 years old (I'm guessing by the 3 years out of college comment) a financial advisor is a waste of money for you. Unless you have a minimum of 50k sitting around, there's nothing that any of those guys will do for you that you can't do for yourself for free. I've personally gotten lucky b/c I have a legacy broker through my family- but I do very little with him. Second- sit down and think about what you're saving for. At this point of your life, you're mainly saving for 1) Retirement (taken care of by a 401k for now) and 2) A house/rainy day fund. I combine house and rainy day in the same category for right now b/c you're going to invest the money the exact same way- safe instruments, steady returns, tax beneficial.
Your priorities for the next 5 years of your life should be:
1) Invest 15% of your salary in your 401K EVERY YEAR!!! I cannot express how much compound interest/returns can come into play, particularly since it's pre-tax. It doesn't matter whether there's a match or not, take advantage of the fact that the money builds up tax free. The max investment each year is 15% or 15,500- so take advantage of it. Now being 25 you're not retiring for another 40 years (about), therefore when picking funds you should be fairly aggressive. I know it's hard to look at things this way- but you have to be willing to accept a year of losses when you're young for the potential to make larger gains. At your age 85% of your money should be in growth stocks, 15% in value stocks or bonds. If you work for a company that offers retirement year funds (e.g. Fidelity Freedom 2045) then you can be simple and invest in one of those. If you want to get more complex then you should look to break up your money between International Equity, Equity Large Cap Growth, Small Cap Growth, and Large Cap Value/Blend funds. If you want more specific advice feel free to PM me.
2) Keep a budget of monthly expenses, include in the budget the amount you want to save per month and automatically take it out at the top. This will help you start to get an idea of what you can reasonably put away each month, and will help you adjust for other expenses accordingly. Btw- there's nothing wrong with saving less for a month so you can go on vacation or buy christmas presents (gotta still have fun), but if you can work those things into a monthly budget you'll be amazed how much you can save.
3) As for the house/rainy day fund- you can save in a couple of different ways, but my recommendation is to find a good mutual fund and invest your money there, as well as have all dividends re-invested. Fidelity and Vangard are great companies and their advisors are generally reasonable. I would wait until you have about $4-5K in cash prior to looking into one though, since many of the good funds have minimums. The nice thing about a MF is that you can constantly add more money whenever you want, and you can also sell off in pieces in case you need to access your cash. This can serve as backup emergency fund.
4) You also want to have a decent cash balance, so take some of your monthly savings and just put it into a savings account or money market to have for emergencies. This money plus your MF money will be more than adequate to back you up.
5) AVOID Roth IRAs. Roth's were great when they first came out b/c there were no limits on your income level for contributions.... however, they recently changed the laws to penalize high earners from contributing. First, you can only contribute $4,000 a year. Second, once your salary level hits 100K your contribution is cut in half, and once you 115K you can no longer contribute. Compare this to the 401K where you can contribute 15.5K a year no matter how high your salary gets. If you don't believe that you're ever going to make that much money then it's a different story.... My main dislike of the Roth, however, is that you have no control over how the money is invested compared to the 401K. With the 401K you can at least allocate the funds, the Roth does not allow you to do that, and it also charges higher penalities than the 401K should you require early withdrawal (aside from those reasons that are penalty free). Finally- a Roth is only superior to a 401K from a tax perspective if you are absolutely sure that tax rates (ordinary and cap gains) in the future will be higher than tax rates today.
6) A house is a great buy if A) you are in an area where it's worthwhile to own as a young person (e.g. not in NYC, LA, DC, etc) and B) you don't have to struggle to put 20% down. Otherwise I would wait, especially since I don't believe the bottom of the mortgage market has been hit.
7) If your job offers life insurance coverage through your benefits then take that- and there's no need to go up to 10X your salary until you're married and have kids. 2-3X is quite fine as a 20-something.
8) Agree with Clint on avoiding stocks unless you like to throw darts at the stock pages. Once you make some serious cash a real financial advisor can help you out... and by serious cash I'm talking about 6 figures in non-house assets.
The biggest piece of advice I can give you (as a 28 year-old myself) is not to worry on a daily basis about your retirement. Don't look at your 401K balance every day, even every week... look every 6 months. It's not going to grow on a daily basis- it grows over the years. As long as you keep at least 3 months worth of rent handy between your cash and mutual fund accounts, you'll be more than fine.
