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Advice you'd give your son
Posted by Patfic15 on 1/31/23 at 4:20 pm45
If I was your son lol. Wife and I have finally hit a point in our lives where it feels possible. We are both 40. We've started talked about the future and where our money goes. My current job pays really well but doesn't have a 401k. I have 30k in a previous 401k account.What's the best advice for someone like me who's still learning (albeit a little late?)
re: Advice you'd give your sonPosted by tigerclaw10 on 1/31/23 at 4:52 pm to Patfic15
What is really well? What I used to think is really well is not as good as I thought it would be now that I am there.
re: Advice you'd give your sonPosted by LemmyLives on 1/31/23 at 5:23 pm to Patfic15
Do they have a 403(b)? If not, just open an IRA, using the 30k from the previous 401(k), and schedule automated deposits every two weeks. Look at the ten year returns on the mutual funds, and split the funds between 3-5 of them.
At 40k, you're pretty much screwed as it is with 30k in retirement. If it makes you feel better, I started when I was 20, and due to inflation, the money in there is going to be nearly worthless in 20 years.
Real estate is a much better investment, but you're absolutely not ready for that. You need to prepare for when the real estate market pulls back by learning what other property owners do. You'll make far more money in perpetuity with property ownership/rentals than you're likely to earn in an IRA or 401(k).
If you can get a high deductible health care plan, using the medical savings account (it can't be a flexible spending account, because those "expire" every year) can also be a vehicle for retirement savings, since your medical expenses are expected to increase in the next 15 years, for the duration of your life.
At 40k, you're pretty much screwed as it is with 30k in retirement. If it makes you feel better, I started when I was 20, and due to inflation, the money in there is going to be nearly worthless in 20 years.
Real estate is a much better investment, but you're absolutely not ready for that. You need to prepare for when the real estate market pulls back by learning what other property owners do. You'll make far more money in perpetuity with property ownership/rentals than you're likely to earn in an IRA or 401(k).
If you can get a high deductible health care plan, using the medical savings account (it can't be a flexible spending account, because those "expire" every year) can also be a vehicle for retirement savings, since your medical expenses are expected to increase in the next 15 years, for the duration of your life.
re: Advice you'd give your sonPosted by SaDaTayMoses on 1/31/23 at 5:34 pm to Patfic15
max out your wife's 401k?
start a Roth?
buy bonds now with the interest rates?
start a Roth?
buy bonds now with the interest rates?
re: Advice you'd give your sonPosted by DiamondDog on 1/31/23 at 5:52 pm to el Gaucho
quote:
ETA: saving now doesn’t matter we’re all gonna be in the fema camp soon
dude you're such a consistent and good troll
re: Advice you'd give your sonPosted by makersmark1 on 1/31/23 at 6:54 pm to Patfic15
Pay yourself first.
The job is the job. It does not love you. Make sure they pay you for every minute they take from you.
Material goods will not make you happen.
Exercise daily.
Eat right.
Enjoy life.
The job is the job. It does not love you. Make sure they pay you for every minute they take from you.
Material goods will not make you happen.
Exercise daily.
Eat right.
Enjoy life.
re: Advice you'd give your sonPosted by baseballmind1212 on 1/31/23 at 7:54 pm to Patfic15
Start simple, max the 401k match from whichever spouse (or both) that has one. That is free money.
After that either pay off high interest debt or max roths. If you have no high interest debt.
ETA: that is assuming you have an emergency savings. If not, start there.
After that either pay off high interest debt or max roths. If you have no high interest debt.
ETA: that is assuming you have an emergency savings. If not, start there.
This post was edited on 1/31 at 7:55 pm
quote:
What's the best advice for someone like me who's still learning (albeit a little late?)
I’ll be honest. The numbers you have are not good. Out of curiosity, if you were to retire at 65, how much do you think you need to have in retirement savings to live comfortably? What’s the dollar amount?
Also what’s your annual income?
MT folks can give you some good advice.
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re: Advice you'd give your sonPosted by BestBanker on 2/1/23 at 7:53 am to Patfic15
Honor The Father, and love your neighbor as yourself.
Insure the event.
Marry the girl.
Save at least 15% of your gross.
Be fruitful and multiply.
Use employer tax-law plan only to the matching funds.
Take the leadership position in your family.
Resist consumer debt.
Own real estate for income and tax benefits.
Limit internet time because it's life sucking.
Fear not.
Call your mom often.
Insure the event.
Marry the girl.
Save at least 15% of your gross.
Be fruitful and multiply.
Use employer tax-law plan only to the matching funds.
Take the leadership position in your family.
Resist consumer debt.
Own real estate for income and tax benefits.
Limit internet time because it's life sucking.
Fear not.
Call your mom often.
re: Advice you'd give your sonPosted by TorchtheFlyingTiger on 2/1/23 at 8:05 am to Patfic15
#1 live on much less than you make. You've been spending most if not more than what you bring in for years. Now that your "job pays really well" you need to be investing a very high percentage to make up for those years you lived at or above what your income could support. You've already inflated lifestyle beyond what you could actually afford. Now, keep that lifestyle in check now that you may be able to afford it.
2. Max tax advantaged investment accounts. Fund Roth IRAs for both you and spouse (if you dont already have traditional IRA that will complicate it.) Backdoor Roth if over the income limit. If wife works max her work retirement accounts.
3. Dont try to outsmart the markets. Even most professional fund managers underperform. Just buy and hold low cost index funds. You'll be less tempted to sell at wrong time and avoid huge timing mistakes.
2. Max tax advantaged investment accounts. Fund Roth IRAs for both you and spouse (if you dont already have traditional IRA that will complicate it.) Backdoor Roth if over the income limit. If wife works max her work retirement accounts.
3. Dont try to outsmart the markets. Even most professional fund managers underperform. Just buy and hold low cost index funds. You'll be less tempted to sell at wrong time and avoid huge timing mistakes.
This post was edited on 2/1 at 8:33 am
re: Advice you'd give your sonPosted by Dawgfanman on 2/1/23 at 8:25 am to Patfic15
If you are 40 and only have 30k saved toward retirement (absent other savings)my advice is as follows:
Austerity, you need to cut your lifestyle to the point you can save 50k or more per year for the next 15 years. As much as you can legally in pretax accounts (or to the match if it exists), the rest in Roth and/or regular brokerage accounts. You need to be aggressive in your savings like you are gonna starve later if you don’t, because that’s the reality.
Austerity, you need to cut your lifestyle to the point you can save 50k or more per year for the next 15 years. As much as you can legally in pretax accounts (or to the match if it exists), the rest in Roth and/or regular brokerage accounts. You need to be aggressive in your savings like you are gonna starve later if you don’t, because that’s the reality.
re: Advice you'd give your sonPosted by FinleyStreet on 2/1/23 at 12:59 pm to Patfic15
If you can invest $2300 per month you're looking at 2M at the age of 65 assuming a 7% rate of return. That's a pretty nice retirement by most standards.
You're starting late but still have plenty of time to turn it around, assuming you stay healthy and employed.
You're starting late but still have plenty of time to turn it around, assuming you stay healthy and employed.
re: Advice you'd give your sonPosted by go ta hell ole miss on 2/1/23 at 2:56 pm to AUCE05
quote:
You could have been lazy the past 15 years and had 200k.
You think people that are lazy about funding retirement could have put away over $13k per year? I think you are out of touch with reality if you really believe that.
In 2022, the average 401k balance at Fidelity was $120k for ages 40-49. The average 401k Vanguard balance was $97k for ages 35-44.
This post was edited on 2/1 at 5:56 pm
re: Advice you'd give your sonPosted by Royalfisher on 2/1/23 at 4:46 pm to Patfic15
If you can’t get into a 401k then open an IRA. Save 20% of your income. Cut expenditures. Cook instead of eating out. Keep your cars longer. Don’t worry about having what those who sell it tell you you should have. Forget about the Jones and make your time on earth with family and friends meaningful.
And save save save. So you can get to a nest egg making over 5% that is 9-11x your annual salary now and at age 60. Invest in cheap low cost but quality mutual funds that you find using Morning Star.
And save save save. So you can get to a nest egg making over 5% that is 9-11x your annual salary now and at age 60. Invest in cheap low cost but quality mutual funds that you find using Morning Star.
re: Advice you'd give your sonPosted by meansonny on 2/1/23 at 5:20 pm to FinleyStreet
quote:
You're starting late but still have plenty of time to turn it around, assuming you stay healthy and employed.
The biggest assumption is the 7% rate of return.
But you are correct.
25 years is plenty of time to catch up if disciplined.
The other way to frame it is the more money he puts away now (shoot for $3k or $3500), the more wiggle room he would get later if he couldn't be disciplined for all 300 monthly deposits (health and employment).
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