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Started By
Message
My pathetic and inadequate 17/18 year retirement window. Advice Welcomed.
Posted on 12/15/14 at 4:08 pm
Posted on 12/15/14 at 4:08 pm
Be gentle guys. Numbers ain't my thing.
I'm 48. Self employed. No debt. Wife stays at home. Great income (for me at least) with LOTS of business expenses keeping my net at tax-friendly level.The college funds are good to go. I'm properly insured. I will also have "renewals"/"residuals" into retirement that should make the rent and groceries. I also plan on working indefinitely with my client base and could see going into my 70's if I'm still enjoying it. And there is also SS, of course.*yeah right
For reasons too laborious and tedious to state here, I have been almost entirely liquid since early 2009. I've obviously missed a LOT of gains. I've made up a bit by earning a lot and saving a lot and paying down debt. I'm not in a bad position, but neither am I in a "smart" position.
Being self-employed I have about 3k a month that I could devote to retirement. Maybe even 4k. I'm considering just rolling over my existing Lincoln Financial IRA into a Vanguard IRA target fund with a 17/18 year window. I'm thinking the advantage of a Roth IRA is not really that great anymore at my age. I'm wondering what you smarter financial guys would do if you were in my shoes? And would you do it yourself, or get an advisor?
In short, what should a self-employed guy do with 3k/4k a month at age 48 to maximize retirement?
I'm 48. Self employed. No debt. Wife stays at home. Great income (for me at least) with LOTS of business expenses keeping my net at tax-friendly level.The college funds are good to go. I'm properly insured. I will also have "renewals"/"residuals" into retirement that should make the rent and groceries. I also plan on working indefinitely with my client base and could see going into my 70's if I'm still enjoying it. And there is also SS, of course.*yeah right
For reasons too laborious and tedious to state here, I have been almost entirely liquid since early 2009. I've obviously missed a LOT of gains. I've made up a bit by earning a lot and saving a lot and paying down debt. I'm not in a bad position, but neither am I in a "smart" position.
Being self-employed I have about 3k a month that I could devote to retirement. Maybe even 4k. I'm considering just rolling over my existing Lincoln Financial IRA into a Vanguard IRA target fund with a 17/18 year window. I'm thinking the advantage of a Roth IRA is not really that great anymore at my age. I'm wondering what you smarter financial guys would do if you were in my shoes? And would you do it yourself, or get an advisor?
In short, what should a self-employed guy do with 3k/4k a month at age 48 to maximize retirement?
3
Posted on 12/15/14 at 4:13 pm to Lsupimp
What is your current income?
How much do you currently have in retirement?
You say no debt, is your house paid for?
How much do you currently have in retirement?
You say no debt, is your house paid for?
Posted on 12/15/14 at 4:19 pm to Lsupimp
If you are looking for tax savings and retirement accounts, you can do a solo 401k and contribute soemthing like 20% of income + 18,000$ as a max.
Posted on 12/15/14 at 4:29 pm to I Love Bama
350k house essentially paid for.
I have low six figures in an IRA but I also have cash elsewhere.
I'd rather not say the income. But I am under this:
I have low six figures in an IRA but I also have cash elsewhere.
I'd rather not say the income. But I am under this:
quote:
Net compensation for self-employed individuals is generally the net profit from IRS Schedule C minus one-half of the individual's self-employment tax. The eligible compensation limit, indexed for inflation by the IRS, is $260,000 for 2014.
Posted on 12/15/14 at 4:35 pm to Lsupimp
Fair enough. I guess you need to figure out what your expenses are, add inflation and work backwards.
I'd say you are in a very good position right now though.
I'd say you are in a very good position right now though.
Posted on 12/15/14 at 4:39 pm to I Love Bama
So do you think a Vanguard IRA (an unspecified target fund) is a solid option at these market "highs" ? I just want low maintenance and reasonable returns.
This post was edited on 12/15/14 at 4:41 pm
Posted on 12/15/14 at 4:44 pm to Lsupimp
I'm more real estate minded so I'll let the stock guys chime in.
Posted on 12/15/14 at 4:52 pm to I Love Bama
I sold seven residential properties post-Katrina and did really well. Most were short term flips acquired at Sheriff's auctions. Never invested another real estate cent. That wore me out. Above my risk tolerance at this stage as well.
Posted on 12/15/14 at 4:53 pm to I Love Bama
Since you're self-employed, you qualify for a SEP rather than a plain vanilla traditional IRA. That's good, because SEP contribution limits are much higher than trad IRAs. The SEP limits are determined by your income...it's something like 25% of income or a max of $52K per year. (but go read the IRS pub on SEPs, please)
Most financial institutions (Fidelity, Vanguard, TIAA-Cref) can set up a SEP for you. It shouldn't require any more paperwork than a traditional IRA. Then set up a monthly electronic transfer into your shiny new SEP account...don't get stuck paying contract fees or front-loaded crapola. Like I said, TIAA-Cref will set up a SEP for you with very little paperwork and no BS. (It's a nonprofit corp managing the assets of 1,000s of university/college/hospital employees, including a crapload of business school professors).
How you invest once you've set up the SEP is another thread entirely. You can certainly pick a lifecycle fund, if that makes you comfortable.
But if you're gonna do $4K/mo for the next 15 years, you will still have WAY more retirement savings than the average American, even if the money experiences only modest to no growth.
Most financial institutions (Fidelity, Vanguard, TIAA-Cref) can set up a SEP for you. It shouldn't require any more paperwork than a traditional IRA. Then set up a monthly electronic transfer into your shiny new SEP account...don't get stuck paying contract fees or front-loaded crapola. Like I said, TIAA-Cref will set up a SEP for you with very little paperwork and no BS. (It's a nonprofit corp managing the assets of 1,000s of university/college/hospital employees, including a crapload of business school professors).
How you invest once you've set up the SEP is another thread entirely. You can certainly pick a lifecycle fund, if that makes you comfortable.
But if you're gonna do $4K/mo for the next 15 years, you will still have WAY more retirement savings than the average American, even if the money experiences only modest to no growth.
Posted on 12/15/14 at 5:17 pm to hungryone
Yes a SEP would be a good idea because I can far exceed the IRA maximum. Are there any tax implications I am forgetting?
Posted on 12/15/14 at 9:27 pm to Lsupimp
Roth 401k is superior to an SEP, as you can defer $18,000 in income plus the same profit sharing amount as an SEP.
Posted on 12/16/14 at 7:03 am to GoIrish02
^^^yes, a solo K will allow you to double dip as both boss/employee (of yourself). It can also be set up as trad (funded w pretax money, taxed upon withdrawa(, or as a Roth (post tax money, but tax free when you take it out). If you think you can do way more than your $4k, then the solo 401k is the way to go.
Posted on 12/16/14 at 7:26 am to hungryone
Put your wife on your payroll and you can then double the amount you contributing to retirement.
Posted on 12/16/14 at 8:38 am to Lsupimp
I'll just post this for your review. The gist is roth accounts offer benefits even for older investors. Personally, I want as much tax free income as I can get.
WSJ Article
WSJ Article
Posted on 12/16/14 at 9:33 am to guttata
quote:
Posted by guttata Put your wife on your payroll and you can then double the amount you contributing to retirement.
I struggle with this. I own my own business and max out the 401k (52k). I think about adding wifey but not sure if it is worth it with the 15.3 payroll taxes we would have to pay on it - whereas in staying under my income it is only 3
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