- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Where to start? Retirement or Emergency Fund?
Posted on 5/15/18 at 8:28 am
Posted on 5/15/18 at 8:28 am
My brother has 1200 dollars to his name. He wants to open a roth IRA and put the whole 1200 into a target date fund. He has no savings other than this amount. I suggested that he first build an emergency fund and worry about Roth IRA after he has about 3 months of EF. HE has no 401k, is 30 , no house or anything. Was my advice correct? Thanks
6
Posted on 5/15/18 at 8:46 am to rivermonsters87
My advice would be wtf is he doing with his life with 1200 to his name at 30 years old?
Posted on 5/15/18 at 9:05 am to rivermonsters87
Emergency fund. 100%.
There are others in here much more capable of talking to the strategic reasons, but from a personal standpoint, I went from 15k in the bank to 1.5k very quickly. Launched a failed startup, got married, moved, and ran into a few unexpected scenarios. All learning lessons that I am 100% responsible for, but things would have been pretty rough without my emergency fund. It's a humbling experience.
You never know what life will throw at you. Tell him to build the emergency fund up to a couple of months expenses, never touch it, and then start considering other alternatives.
There are others in here much more capable of talking to the strategic reasons, but from a personal standpoint, I went from 15k in the bank to 1.5k very quickly. Launched a failed startup, got married, moved, and ran into a few unexpected scenarios. All learning lessons that I am 100% responsible for, but things would have been pretty rough without my emergency fund. It's a humbling experience.
You never know what life will throw at you. Tell him to build the emergency fund up to a couple of months expenses, never touch it, and then start considering other alternatives.
This post was edited on 5/15/18 at 9:06 am
Posted on 5/15/18 at 9:14 am to LSUShock
The easy answer is emergency fund.
The only reason to forego this is if he isn't in debt and he has a strong monthly income (and he can do the fund next month, etc..)
Most people that age without savings usually don't have a huge income or they have a large debt. So it defaults to the easy answer... emergency fund.
The only reason to forego this is if he isn't in debt and he has a strong monthly income (and he can do the fund next month, etc..)
Most people that age without savings usually don't have a huge income or they have a large debt. So it defaults to the easy answer... emergency fund.
Posted on 5/15/18 at 9:27 am to rivermonsters87
I generally advise building a small emergency fund (about a month of expenses) then shift to IRA as you can’t make up those lost contributions, but OP doesn’t have enough info to really give advice.
Posted on 5/15/18 at 9:37 am to MrJimBeam
quote:
My advice would be wtf is he doing with his life with 1200 to his name at 30 years old?
still very young. has plenty of time. we do not know what he has went through financially or anything else for that matter so we cannot just assume. many do not start making jack until early 30's anyway. like the old sayaing goes, 20's are for learnin and 30's are for earnin!
Posted on 5/15/18 at 9:42 am to rivermonsters87
emergency fund. but it could be split if he's torn and decision is adds stress to it.
far too often people make all or nothing decisions when they can split it up and the difference is negligible
far too often people make all or nothing decisions when they can split it up and the difference is negligible
Posted on 5/15/18 at 10:19 am to rivermonsters87
My personal opinion and full disclosure I am not a financial advisor. I would throw just $100-$500 or so to open up a Roth IRA, and then focus on building up a full Emergency Fund of 3-6 months reserves. Only reason is in my opinion it is easier and more likely to go back and put more money in the future in your Roth IRA once you have already open and started the account.
Then set aside money every paycheck to fund both of those accounts. Start off with a higher allocation to your savings than roth. Once you have filled up your savings adequately you can then move over and start to work on maxing your roth IRA every year.
Then set aside money every paycheck to fund both of those accounts. Start off with a higher allocation to your savings than roth. Once you have filled up your savings adequately you can then move over and start to work on maxing your roth IRA every year.
Posted on 5/15/18 at 10:41 am to HYDRebs
I like and agree with that advice.
Posted on 5/15/18 at 11:28 am to rivermonsters87
Put it in the Roth but invest in a money market fund. He can pull it back out for emergencies at any time but by putting it in a money market fund he'll at least make a little interest that is tax-free.
He shouldn't put it in a market fund yet b/c of the possibility of a market crash right when he needs the money.
He shouldn't put it in a market fund yet b/c of the possibility of a market crash right when he needs the money.
Posted on 5/15/18 at 12:59 pm to foshizzle
Establish 3 to 6 months emergency fund first.
Page 1 of 1
Back to top
Follow TigerDroppings for LSU Football News