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Cha-ching, it's the [Financial Literacy] thread

2456779

Posts

  • milskimilski Poyo! Registered User regular
    Aioua wrote: »
    milski wrote: »
    Also I think there's some weird thing where you can overcontribute to a 401k if your employer lets you and then legally roll it into a Roth IRA and pay no tax on the Roth IRA contribution or the withdrawals, but that seemed like magic bullshit.

    it's not magic bullshit

    it's very specifically crafted and maintained bullshit so a few people don't need to pay as much taxes

    I mean its not like it's The Rich, it's people saving more than 24k a year on sub 110k income iirc.

    I ate an engineer
  • MugsleyMugsley DelawareRegistered User regular
    Aioua wrote: »
    Can someone help me decide if I'm doing retirement right?

    I have an old retirement account with TIAA-CREF about $20k. It goes up and that's fine. It just sits there. (It's gone from like 15k to 20k in 4 years)
    I have my current job retirement account where I contribute 6% to get a 3% match (the max from employer).

    Both of these are in low fee, pretty favorable return mutual funds. I feel okay with that.

    Am I missing out by not having an IRA/Roth IRA? I don't quite understand what I should/could be doing differently than my current set up.

    Thank you.

    I would do some math and see if you like the numbers you'd get with your current investments, and if you'd like to save more then and IRA is probably how you'd do it.

    Personally, I would also roll off the old retirement account into an IRA, mostly because I'm uncomfortable with old 401ks for places I don't work any more. I've heard stories of all kinds of headaches for people trying to access that money down the road.

    See if you can get some sort of portfolio statement or prospectus for the TIAA fund. In general, they tend to be very good and fairly low fee. TIAA is usually what teachers and school districts use for their investment vehicles. In general, if your fees are below about 0.5%, then you are in good shape. From a higher perspective, you should be paying higher than 1% in fees.

    The others are right, in that IRAs are geared more toward those who don't have any matching, or have additional funds they'd like to sock away.

  • milskimilski Poyo! Registered User regular
    milski wrote: »
    I find it very unlikely you would need more then 10k in liquid savings. Adding 1k to it per month is really overkill. I mean yes, you could suddenly become jobless for a very long time. But you can pull the money out of wherever you put it and it is not doing anything in a savings account so you're overplanning for an unlikely outcome.

    Most people don't even have 2k in savings (which is bad) so good work being responsible!

    I try to add $500 a month to my checking account but that's because I'm insane.

    Oh I used to save $600 a month on less salary but I had no car payment and my rent was a lot cheaper. Still, I waste far too much money on bullshit food and drink. Now I take a reasonable $100 per biweekly paycheck and put it in savings.

    I meant that I'm putting in 500 a month liquid in addition to my other savings, which are maximized contributions.

    I ate an engineer
  • PaladinPaladin Registered User regular
    I'm really counting on virtual reality to be cheap enough when I retire that all I'd have to do is pay plumbing and electric on some shared student apartment

    Marty: The future, it's where you're going?
    Doc: That's right, twenty five years into the future. I've always dreamed on seeing the future, looking beyond my years, seeing the progress of mankind. I'll also be able to see who wins the next twenty-five world series.
  • OnTheLastCastleOnTheLastCastle let's keep it haimish for the peripatetic Registered User regular
    You can get expense ratios in the .0X% region. My main old account is .04% with excellent returns.

    It's the Vanguard Institutional Index Fund Institutional VINIX:NASDAQ

  • MugsleyMugsley DelawareRegistered User regular
    milski wrote: »
    Aioua wrote: »
    milski wrote: »
    Also I think there's some weird thing where you can overcontribute to a 401k if your employer lets you and then legally roll it into a Roth IRA and pay no tax on the Roth IRA contribution or the withdrawals, but that seemed like magic bullshit.

    it's not magic bullshit

    it's very specifically crafted and maintained bullshit so a few people don't need to pay as much taxes

    I mean its not like it's The Rich, it's people saving more than 24k a year on sub 110k income iirc.

    You're probably thinking of a Back Door Roth, and it's used by high income earners (>$250k/yr) to gain the benefits of a Roth despite being above the income limits.

    Unless you're referring to Traditional -> Roth conversion; which is a different animal.

  • tinwhiskerstinwhiskers Registered User regular
    Surfpossum wrote: »
    I had hoped to save up enough to pay off my mortgage in under ten years, but this looks less and less likely.

    I have about $10k sitting in a savings account, and I expect to be adding at least $1k to it per month. I'm also hoping to pull out enough to pay off my mortgage before I hit 59.5 (slightly over 30 years from now).

    This leads me to believe I should be putting stuff into something other than my 401k or an IRA. I've seen Vanguard mentioned a few times, so I'm guessing I should just be investing? In mutual funds? Or whatever an ETF is?

    I care less about taxes and gains and more about liquidity, being highly risk averse, but I think it's time to say goodbye to some of my cushion.

    Also, I recently started using You Need A Budget; as far as I can tell you need to go to the desktop site to do anything on a phone, and my brain just cannot get a grasp on the way they handle credit card spending, but it is very slick and makes it easier to track what you're spending too much on. They've got a free trial, it's worth a look.


    Mortgage interest is the least important interest to be worried about- if you are itemizing it is tax deductible- and its generally locked in long term at sub 5% rates. You will be much better off in 30 years paying the bare minimum on your mortgage and putting the rest into retirement accounts, than you will trying to pay down the mortgage as fast as possible and then catch up.

    6ylyzxlir2dz.png
  • MugsleyMugsley DelawareRegistered User regular
    edited September 2016
    Chanus wrote: »
    Goes into more explanations even if they don't cover the assumptions/details, but this is basically the % of your income you need to save every year to retire at the same lifestyle level.


    safe-savings-25-35_w.png


    safe-savings-15-50_w.png

    So yeah, Start Early.

    yeah i see stuff like this or look at the projected returns on my retirement and i'm like

    cool i should get a good six or eight years out of it

    well played, chanus

    A few things that are common in financial planning stuff like this -at least as far as I've seen- is that they always assume 0 social security dollars. I mean I'm as much of a believer in "the boomers are going to drain all the money like vampires and I'm getting nothing" as anybody, but that probably isn't strictly true.

    Also, they tend to make very linear assumptions about spending habits. I've seen some better analysis that looks more at like "how much money does a 85 year old actually spend vs a 67 year old". One person I talked to once explained it as "we assume 65% income after age 80, because that's all you'll need for coffee, the newspaper, and daytime TV".

    The more astute planners will work out changing expenses based on age and lifestyle. The more a client can tell an adviser, the better the plan will be.

    Also, yes, 0 SS dollars are assumed when you're below a certain age because you want to be planning for the worst case. Then, if stuff like SS is still available, it's gravy. If you have a good plan, and/or you're still with the planner, you can change where your money is held to keep from having SS income push you into a higher tax bracket.
    I've heard it discussed recently, and I believe it but I haven't done the detective work, that SS was set up to keep the elderly off the street. Essentially a living wage. And over time, people began relying on it for income for retirement; and so they didn't invest as much as the probably should have. With the Boomers starting to retire, that system will have an historic burden on it, and it remains to be seen whether that system can handle the strain. I'm not expecting it to go away, but I can see changes in the next ~10 years where the minimum age is increased, or some sort of increased "tax" (because I can't think of another word) is levied to try to keep it solvent.

    Mugsley on
  • VishNubVishNub Registered User regular
    Lets not turn this into a SS reform thread.

  • Evil MultifariousEvil Multifarious Registered User regular
    So for the Canadians who might be in here, I have an RRSP through my company, and they do a small contribution matching, etc. It's got a default investment structure that I haven't looked into. But what is the usual investment structure and expected return rate for an RRSP? What should I be looking for?

  • MugsleyMugsley DelawareRegistered User regular
    Surfpossum wrote: »
    I had hoped to save up enough to pay off my mortgage in under ten years, but this looks less and less likely.

    I have about $10k sitting in a savings account, and I expect to be adding at least $1k to it per month. I'm also hoping to pull out enough to pay off my mortgage before I hit 59.5 (slightly over 30 years from now).

    This leads me to believe I should be putting stuff into something other than my 401k or an IRA. I've seen Vanguard mentioned a few times, so I'm guessing I should just be investing? In mutual funds? Or whatever an ETF is?

    I care less about taxes and gains and more about liquidity, being highly risk averse, but I think it's time to say goodbye to some of my cushion.

    Also, I recently started using You Need A Budget; as far as I can tell you need to go to the desktop site to do anything on a phone, and my brain just cannot get a grasp on the way they handle credit card spending, but it is very slick and makes it easier to track what you're spending too much on. They've got a free trial, it's worth a look.

    Piggybacking off of @tinwhiskers, the savings account should be used for your down payment. After that, keep an amount around as an emergency fund. This is generally 6 months to a year of expenses (not income). If you finance your house for 30 years, you can overpay as you have the funds to do so, and get yourself closer to having the house paid off before you retire. That's pretty much the best way to do it without knowing more information because you're not locked into higher payments with a shorter-term mortgage.

    ----
    So general knowledge: 401k and IRA are both types of investment accounts. These accounts -- generally -- invest the money in mutual funds; which are "packs" of stocks that are bought and sold under a general investment strategy for that fund. Vanguard is one of the companies that handles these investments, and it is highly regarded because its fees are SUPER low, while proving to perform quite well.

    An ETF is an Exchange Traded Fund; which is essentially a mutual fund that is publically traded. So those stock "packs" that Vanguard puts together are, themselves, bought and sold instead of their individual stocks. It starts to become a bit of a "nesting doll" scenario because you're starting to look at stocks-of-stocks; but the general idea of an ETF is to own small amounts of multiple companies that fulfill a given strategy (i.e. large companies, foreign corporations, commodities, technology, etc.).

  • MugsleyMugsley DelawareRegistered User regular
    VishNub wrote: »
    Lets not turn this into a SS reform thread.

    I apologize. I felt I needed to explain a bit more, even though -- re-reading it -- that last paragraph is all opinion. If you'd like, I can remove that part of the post.

  • PaladinPaladin Registered User regular
    I use a high interest checking account. I get 5% interest off it. It's capped, though, and I have to make $500 in debit card purchases a month

    Marty: The future, it's where you're going?
    Doc: That's right, twenty five years into the future. I've always dreamed on seeing the future, looking beyond my years, seeing the progress of mankind. I'll also be able to see who wins the next twenty-five world series.
  • Evil MultifariousEvil Multifarious Registered User regular
    Paladin wrote: »
    I use a high interest checking account. I get 5% interest off it. It's capped, though, and I have to make $500 in debit card purchases a month

    Wtf. Are there fees? What's the cap?

  • MugsleyMugsley DelawareRegistered User regular
    Yeah, that's pretty ridiculous; in an age of sub-1% accounts!

  • VishNubVishNub Registered User regular
    Paladin wrote: »
    I use a high interest checking account. I get 5% interest off it. It's capped, though, and I have to make $500 in debit card purchases a month

    Wtf. Are there fees? What's the cap?

    More importantly, what's the catch?

  • PaladinPaladin Registered User regular
    edited September 2016
    Paladin wrote: »
    I use a high interest checking account. I get 5% interest off it. It's capped, though, and I have to make $500 in debit card purchases a month

    Wtf. Are there fees? What's the cap?

    The cap is $5000, so it's only good for earning money on the side for accounts you have to pay bills with. I get no-fee transfers to the account though, which is neat

    However banks that do this are local or online, meaning it may be difficult or impossible to cash a paper check. But some reimburse your ATM fees.

    Paladin on
    Marty: The future, it's where you're going?
    Doc: That's right, twenty five years into the future. I've always dreamed on seeing the future, looking beyond my years, seeing the progress of mankind. I'll also be able to see who wins the next twenty-five world series.
  • Evil MultifariousEvil Multifarious Registered User regular
    VishNub wrote: »
    Paladin wrote: »
    I use a high interest checking account. I get 5% interest off it. It's capped, though, and I have to make $500 in debit card purchases a month

    Wtf. Are there fees? What's the cap?

    More importantly, what's the catch?

    I assume it involves goat blood and a cauldron

  • SurfpossumSurfpossum A nonentity trying to preserve the anonymity he so richly deserves.Registered User regular
    Surfpossum wrote: »
    I had hoped to save up enough to pay off my mortgage in under ten years, but this looks less and less likely.

    I have about $10k sitting in a savings account, and I expect to be adding at least $1k to it per month. I'm also hoping to pull out enough to pay off my mortgage before I hit 59.5 (slightly over 30 years from now).

    This leads me to believe I should be putting stuff into something other than my 401k or an IRA. I've seen Vanguard mentioned a few times, so I'm guessing I should just be investing? In mutual funds? Or whatever an ETF is?

    I care less about taxes and gains and more about liquidity, being highly risk averse, but I think it's time to say goodbye to some of my cushion.

    Also, I recently started using You Need A Budget; as far as I can tell you need to go to the desktop site to do anything on a phone, and my brain just cannot get a grasp on the way they handle credit card spending, but it is very slick and makes it easier to track what you're spending too much on. They've got a free trial, it's worth a look.


    Mortgage interest is the least important interest to be worried about- if you are itemizing it is tax deductible- and its generally locked in long term at sub 5% rates. You will be much better off in 30 years paying the bare minimum on your mortgage and putting the rest into retirement accounts, than you will trying to pay down the mortgage as fast as possible and then catch up.
    Intriguing.

    I hadn't run the math on this stuff like when I first got my mortgage, but it looks like this is very correct.

    I'm going to be paying $140k in interest over 30 years, and it looks like plugging in $10k principle/just $500 monthly/5% interest rate into a compound interest calculator would get me $270k in interest over 30 years.

    How... unsatisfying, to have "ignoring" my debt be the financially correct choice.

  • MugsleyMugsley DelawareRegistered User regular
    Paladin wrote: »
    Paladin wrote: »
    I use a high interest checking account. I get 5% interest off it. It's capped, though, and I have to make $500 in debit card purchases a month

    Wtf. Are there fees? What's the cap?

    The cap is $5000, so it's only good for earning money on the side for accounts you have to pay bills with. I get no-fee transfers to the account though, which is neat

    However banks that do this are local or online, meaning it may be difficult or impossible to cash a paper check. But some reimburse your ATM fees.

    This is a similar reason why I opened a checking account at Fidelity. They reimburse all ATM fees, so I use it exclusively as a spending-cash account ($60/paycheck), but mine doesn't pay any interest.

  • HounHoun Registered User regular
    edited September 2016
    Here's my question:

    What options are available for someone in their mid-30s with no plans or ability to save for retirement? I currently have no debt, but I rent, and within a few short years I'll be having to pay for TWO children to go to college. I also have aging, overweight parents who will not be able to take care of themselves and have no savings or retirement, either, and I suspect their care will fall to me as well*.

    In a worst-case scenario in which I am still paying off that debt and caring for my parents until I am no longer able to work, is my choice to simply resign myself to dying homeless in the gutter? If so, please recommend good cities that stay warm year round and have decent meal programs for elderly homeless and regularly cleaned streets so that my corpse doesn't cause too much disruption.



    *Don't misunderstand, I am perfectly willing to care for my parents. I love them dearly. I'm simply pointing out that as the eldest childest and greatest earner, caring for them is going to fall to me.

    Houn on
  • KakodaimonosKakodaimonos Code fondler Helping the 1% get richerRegistered User regular
    Mugsley wrote: »
    Surfpossum wrote: »
    I had hoped to save up enough to pay off my mortgage in under ten years, but this looks less and less likely.

    I have about $10k sitting in a savings account, and I expect to be adding at least $1k to it per month. I'm also hoping to pull out enough to pay off my mortgage before I hit 59.5 (slightly over 30 years from now).

    This leads me to believe I should be putting stuff into something other than my 401k or an IRA. I've seen Vanguard mentioned a few times, so I'm guessing I should just be investing? In mutual funds? Or whatever an ETF is?

    I care less about taxes and gains and more about liquidity, being highly risk averse, but I think it's time to say goodbye to some of my cushion.

    Also, I recently started using You Need A Budget; as far as I can tell you need to go to the desktop site to do anything on a phone, and my brain just cannot get a grasp on the way they handle credit card spending, but it is very slick and makes it easier to track what you're spending too much on. They've got a free trial, it's worth a look.

    Piggybacking off of tinwhiskers, the savings account should be used for your down payment. After that, keep an amount around as an emergency fund. This is generally 6 months to a year of expenses (not income). If you finance your house for 30 years, you can overpay as you have the funds to do so, and get yourself closer to having the house paid off before you retire. That's pretty much the best way to do it without knowing more information because you're not locked into higher payments with a shorter-term mortgage.

    ----
    So general knowledge: 401k and IRA are both types of investment accounts. These accounts -- generally -- invest the money in mutual funds; which are "packs" of stocks that are bought and sold under a general investment strategy for that fund. Vanguard is one of the companies that handles these investments, and it is highly regarded because its fees are SUPER low, while proving to perform quite well.

    An ETF is an Exchange Traded Fund; which is essentially a mutual fund that is publically traded. So those stock "packs" that Vanguard puts together are, themselves, bought and sold instead of their individual stocks. It starts to become a bit of a "nesting doll" scenario because you're starting to look at stocks-of-stocks; but the general idea of an ETF is to own small amounts of multiple companies that fulfill a given strategy (i.e. large companies, foreign corporations, commodities, technology, etc.).

    The big difference between an ETF and a mutual fund is an ETF trades on the stock exchanges, so you'll need a brokerage account and you'll pay whatever trade fees and commissions are associated with the account to purchase and sell ETF shares.

    Mutual funds are going to be through a fund management firm and will only be able to be traded at the end of the day.

  • AiouaAioua Ora Occidens Ora OptimaRegistered User regular
    Houn wrote: »
    Here's my question:

    What options are available for someone in their mid-30s with no plans or ability to save for retirement? I currently have no debt, but I rent, and within a few short years I'll be having to pay for TWO children to go to college. I also have aging, overweight parents who will not be able to take care of themselves and have no savings or retirement, either, and I suspect their care will fall to me as well*.

    In a worst-case scenario in which I am still paying off that debt and caring for my parents until I am no longer able to work, is my choice to simply resign myself to dying homeless in the gutter? If so, please recommend good cities that stay warm year round and have decent meal programs for elderly homeless and regularly cleaned streets so that my corpse doesn't cause too much disruption.



    *Don't misunderstand, I am perfectly willing to care for my parents. I love them dearly. I'm simply pointing out that as the eldest childest and greatest earner, caring for them is going to fall to me.

    your options are, sadly,
    1. Dramatically increase your income
    2. Dramatically decrease your expenses
    3. Be poor

    life's a game that you're bound to lose / like using a hammer to pound in screws
    fuck up once and you break your thumb / if you're happy at all then you're god damn dumb
    that's right we're on a fucked up cruise / God is dead but at least we have booze
    bad things happen, no one knows why / the sun burns out and everyone dies
  • MugsleyMugsley DelawareRegistered User regular
    edited September 2016
    @Houn

    You say you have no ability to save for retirement, so I'm not sure what your employment situation is, or if there's any prospect of moving "up." Based on the info you gave, and the dependencies you're expecting:

    1) Were you able to start some sort of 529 Plan for your children? If not, do you have any relatives who give you money around the holidays "for the kids"? If so, start one now. You can get more info HERE and HERE

    2) You have no debt and you rent. Is there any non-obligated income you have available or can make available? I'm reading into your post that the number is either low or non-existent; which is fine.

    My first suggestion is to find a financial planner in your area that can tailor something specific to your situation. Check XY Planning Network or NAPFA for a start. Also ask friends or coworkers if they are working with anyone and whether they like them. Please make sure whichever advisor you pick is acting as a fiduciary and is willing to use financial instruments outside of a given company (for example, someone in -- say -- Ameriprise will probably put you in all Ameriprise funds. While that may not be bad, if you can choose the funds along with the advisor, at least you know where your money is going)

    What is your lifestyle? Are there any budgetary changes you can make to free up funds for investing? Do you eat out a lot? Do you have an expensive hobby that can be dialed back? Are there any monthly expenses that aren't needed? (e.g. gym memberships or various subscriptions) A financial advisor will go over this with you as well, but it's worth asking yourself the hard questions ahead of time.


    As @Aioua mentions, your other option is to sacrifice some time for income. So, you could use a site such as http://www.upwork.com to do small side jobs for income. Or, if there are any blogs that you frequent, you could offer to write some articles for compensation. As much as it sucks, you could also look into part time work at places like a grocery store, or retail. Also, Amazon is hiring seasonal online workers to help customers navigate through their website.

    Mugsley on
  • ChanusChanus Harbinger of the Spicy Rooster Apocalypse The Flames of a Thousand Collapsed StarsRegistered User regular
    Quid wrote: »
    Chanus wrote: »
    tax deferment is also something to consider when choosing an IRA or a Roth IRA

    not having to pay taxes now may not actually be better for you in the long run. you're basically betting that taxes will never be higher than they are currently

    and currently taxes are near the lowest they've ever been in the US in the modern era (like post WW2)

    I agree with this post completely. For the flip side however: Depending on your lifestyle in later years your income requirements may be much lower. My wife and I plan to retire to either the country or city by then. Which either means significantly cheaper real estate or eliminating one or both vehicles, either way decreasing our yearly budget notably.

    Basically, a person's investments should be planned around the life they intend to live in the next few years to decades down the line.

    yeah, i definitely meant that more as a "something people don't often consider" thing than a "this is definitely the right way" thing

    errbod life different

    Allegedly a voice of reason.
  • AiouaAioua Ora Occidens Ora OptimaRegistered User regular
    sorry I shouldn't be so fatalistic

    I have some friends who are drowning and it's like there are just no real answers

    there aren't enough jobs out there that pay real wages for people to live on :(

    life's a game that you're bound to lose / like using a hammer to pound in screws
    fuck up once and you break your thumb / if you're happy at all then you're god damn dumb
    that's right we're on a fucked up cruise / God is dead but at least we have booze
    bad things happen, no one knows why / the sun burns out and everyone dies
  • SurfpossumSurfpossum A nonentity trying to preserve the anonymity he so richly deserves.Registered User regular
    @Houn your finances sound pretty tight, but I think even something like $50 a month* in a 401k turns into a decent amount after 30 years ($18k contributed becomes $58k at 7%).

    It's not, y'know, enough but maybe you'll be able to splurge on one of the nicer ditches.

    * I know this isn't realistic for many, but just in case.

  • ChanusChanus Harbinger of the Spicy Rooster Apocalypse The Flames of a Thousand Collapsed StarsRegistered User regular
    Aioua wrote: »
    sorry I shouldn't be so fatalistic

    I have some friends who are drowning and it's like there are just no real answers

    there aren't enough jobs out there that pay real wages for people to live on :(

    there

    there's one answer vowels

    say it with me

    abol-

    Allegedly a voice of reason.
  • milskimilski Poyo! Registered User regular
    Chanus wrote: »
    Aioua wrote: »
    sorry I shouldn't be so fatalistic

    I have some friends who are drowning and it's like there are just no real answers

    there aren't enough jobs out there that pay real wages for people to live on :(

    there

    there's one answer vowels

    say it with me

    abol-

    Itionists were rad

    I ate an engineer
  • RMS OceanicRMS Oceanic Registered User regular
    UK Future Planner guy here.

    So next month, I will have been paying into my company's pension scheme for eight years, ever since I joined them at age 23. At present my company matches most of what I put into it, for a total monthly contribution of £330.

    The pot's value is at present £29,500, and the scheme's website has a median projection that when I take the pension, it will be worth £7,000-£8,000 a year, though there are high/lowball projections as well saying it could be worth £3,000 or £14,000.

    Now I'm still entitled to a state pension of £8,000, so an annual income of £16,000 sounds pretty good. But since there are a lot of ifs in that projection I'd like to set aside more. Would upping my contributions be the best approach, or should I look into alternate financial schemes to diversify?

    One possible factor: I have a mortgage that I still have 20 years to pay up on, with a fixed rate until 2018. The cash cushion in my current account would be to either pay a lump off when the rate changes or maybe invest in some renovations.

  • ChanusChanus Harbinger of the Spicy Rooster Apocalypse The Flames of a Thousand Collapsed StarsRegistered User regular
    milski wrote: »
    Chanus wrote: »
    Aioua wrote: »
    sorry I shouldn't be so fatalistic

    I have some friends who are drowning and it's like there are just no real answers

    there aren't enough jobs out there that pay real wages for people to live on :(

    there

    there's one answer vowels

    say it with me

    abol-

    Itionists were rad

    also true

    Allegedly a voice of reason.
  • HounHoun Registered User regular
    Mugsley wrote: »
    @Houn

    You say you have no ability to save for retirement, so I'm not sure what your employment situation is, or if there's any prospect of moving "up." Based on the info you gave, and the dependencies you're expecting:

    1) Were you able to start some sort of 529 Plan for your children? If not, do you have any relatives who give you money around the holidays "for the kids"? If so, start one now. You can get more info HERE and HERE

    2) You have no debt and you rent. Is there any non-obligated income you have available or can make available? I'm reading into your post that the number is either low or non-existent; which is fine.

    My first suggestion is to find a financial planner in your area that can tailor something specific to your situation. Check XY Planning Network or NAPFA for a start. Also ask friends or coworkers if they are working with anyone and whether they like them. Please make sure whichever advisor you pick is acting as a fiduciary and is willing to use financial instruments outside of a given company (for example, someone in -- say -- Ameriprise will probably put you in all Ameriprise funds. While that may not be bad, if you can choose the funds along with the advisor, at least you know where your money is going)

    What is your lifestyle? Are there any budgetary changes you can make to free up funds for investing? Do you eat out a lot? Do you have an expensive hobby that can be dialed back? Are there any monthly expenses that aren't needed? (e.g. gym memberships or various subscriptions) A financial advisor will go over this with you as well, but it's worth asking yourself the hard questions ahead of time.


    As @Aioua mentions, your other option is to sacrifice some time for income. So, you could use a site such as http://www.upwork.com to do small side jobs for income. Or, if there are any blogs that you frequent, you could offer to write some articles for compensation. As much as it sucks, you could also look into part time work at places like a grocery store, or retail. Also, Amazon is hiring seasonal online workers to help customers navigate through their website.

    1. No. If I were just having children now, that could have been an option, but was not financially viable at the time they were born.
    2. We do currently stash money in savings each month; everything not earmarked for expenses. This is a recent development, as previously, ALL extra went to paying off debt (paying over minimums, rolling payments from closed accounts right back into payments for other lines of credit rather than pocketing the extra.) I'm not going to say the number online, but it's getting "decent": we can survive a small emergency (medical, car, etc) quite easily.

    We eat out more than we should, but not excessively. My wife and I allot ourselves $100 each a month for "play" money: games, movies, books, stuff like that. I rarely spend mine. My only monthly expenses are... Netflix and cable internet? I might be forgetting something. I'm probably pretty capped out in my job, I don't foresee any drastic shifts in my title or income for the foreseeable future.

    I shouldn't make it sound so dire; I'm actually in a damn good place at the moment. I'm just looking ahead, and four years from now the first kid is going to graduate High School, with the second three years behind. I make too much for them to qualify for assistance and the loans will be in my name, not theirs. On top, as I mentioned, my parents are getting up there and have been poor and rural their entire lives. They have no savings of their own, still living paycheck to paycheck, and worse, just lost their medical insurance and my mom's too brainwashed to even look at the ACA exchanges. Both of them are looking like prime candidates for diabetes and other medical issues.

    My problem is, I basically have four years to plan for the next 50 for my wife and I, before every cent I make is going to be sucked up supporting my parents and children. And I will do it, because I can and it's my responsibility to do so, but I don't expect to have anything left over to put toward "retirement". I grew up below the poverty line, I took out loans and got myself through college by working to pay for my food and bills, got hit hard by graduating two weeks after 9/11 as the economy slid into the shitter, and only now have finally dragged myself out of that financial hole. As a consequence, I'm irrationally afraid of credit cards (and credit in general) despite having a fantastic credit score, and get anxiety over even the thought of taking out a mortgage (also, fuck Seattle house prices). My entire childhood and adult life has taught me to hate and fear the system, all banks are corrupt, the stock market is a fool's gamble for anyone by the ultra-rich, and that my place in life is to work until I can't, then die somewhere where I will not be a burden.

    In case anyone was curious why I put "Eat at Arbys" on the end of so many of my posts these days.

  • dispatch.odispatch.o Registered User regular
    Brought to you by Carl's Jr.

  • QuidQuid Definitely not a banana Registered User regular
    @Houn if you're capped out at your job, maybe consider throwing your résumé on monster or somewhere else to see what pops up. You've got the bonus of experience and have the benefit of getting to be a bit choosy. Government in particular pays better than most expect with the added benefits of health care and possible pensions.

  • PaladinPaladin Registered User regular
    Should I pay off my credit cards before saving for retirement?

    Marty: The future, it's where you're going?
    Doc: That's right, twenty five years into the future. I've always dreamed on seeing the future, looking beyond my years, seeing the progress of mankind. I'll also be able to see who wins the next twenty-five world series.
  • HounHoun Registered User regular
    Quid wrote: »
    @Houn if you're capped out at your job, maybe consider throwing your résumé on monster or somewhere else to see what pops up. You've got the bonus of experience and have the benefit of getting to be a bit choosy. Government in particular pays better than most expect with the added benefits of health care and possible pensions.

    I'm capped out, but I'm in a good spot for the moment. I also don't think my current skillset and responsibilities would be very widely transferrable: a side effect of a ten year stint in which I have become super specialized. Any career changes would require dropping back several levels in responsibility and autonomy, and carry a huge pay cut with it.

    I might potentially be able to slide into a management role in a few years, which would open up more options, but seriously, I don't think I'm going to find anywhere that pays as well as here.

    But, I feel like I've whined enough. I'll come back to the thread when I'm done panicking and look over some of the links in the OP.

  • RMS OceanicRMS Oceanic Registered User regular
    Paladin wrote: »
    Should I pay off my credit cards before saving for retirement?

    Find the thing with the highest interest rate, be it debt or savings, and put money into that. Paying down a 15% loan is better than putting money into a 2% savings scheme.

  • tinwhiskerstinwhiskers Registered User regular
    Paladin wrote: »
    Should I pay off my credit cards before saving for retirement?

    Unless you have like sub 6% interest rates, yes.

    That said, it wouldn't be the worst thing in the world to set up an account with a small biweekly deposit into it. So that once you pay off the cards you don't have the "get this stuff all set up and figured out" hurdle to overcome and can just make the number bigger.

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  • ChanusChanus Harbinger of the Spicy Rooster Apocalypse The Flames of a Thousand Collapsed StarsRegistered User regular
    Paladin wrote: »
    Should I pay off my credit cards before saving for retirement?

    Unless you have like sub 6% interest rates, yes.

    That said, it wouldn't be the worst thing in the world to set up an account with a small biweekly deposit into it. So that once you pay off the cards you don't have the "get this stuff all set up and figured out" hurdle to overcome and can just make the number bigger.

    yeah, like, set something small up now, and then use part of the money you used to pay off your cards as your new retirement savings amount

    since you'll already be used to setting that amount aside anyway

    ez pz bing bang boom

    Allegedly a voice of reason.
  • SurfpossumSurfpossum A nonentity trying to preserve the anonymity he so richly deserves.Registered User regular
    Definitely plug some numbers into the various calculators you can find online; even 4 years of saving turns into a significantly larger amount after 30 years of sitting there.

    For credit/mortgage type stuff, try a credit union instead of a bank. I switched about five years ago from Keybank to a local credit union, WECU, and the experience has been much nicer. I believe they're much less incentivized to profit off their members, but I don't know the specifics.

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