Questions about retirement plans.....

[Jim Oaks]

I was wondering if any of you guys could give me some insight on retirement plans.

I have a state retirement and never paid in to social security when I was working for the state or dealt with any type of retirement plans.

My wife is 23 and works full time hours but is considered part time.

I would like for her to have some type of personal retirement plan so she won't have to rely soley on social security when she gets older and retires.

I was wondering if any of you have any advise on personal retirement plans. Especially since I've heard some people complain about losing money.

 

[Bryan22]

Get her started on a roth IRA ASAP. the sooner you start the better off she'll be when time comes to retire. And don't ask me about specifics, cause i don't remember, my tax guy is the one who I went through, and i forgot most of the figures he was giving me. Though it's based on stocks, he has his own and said even though you'll lose money some years it always ends up growing in the long run.

 

[snake]

You can start a roth IRA anytime and contribute up to 4K a year (single) and maybe 5K Married? Can't remember, but it is limited as to the amount you can stash per year. The roth is a great deal because it is after tax dollars, and you don't pay tax when you retire- even on the gains. You can invest in damn near ANYTHING (money market, mutual funds, stocks, CD's, etc) within the IRA and change the investments whenever you want as long as you leave it in there until 59 1/2. Money market or CD is the safe way to go but you'll never have enough in the end, because they rarely keep up with inflation. The riskier stuff pays better, and right now the market is down. May (or may not be) a good time to jump in. If you can handle this on your own you can open an account with TD ameritrade or other discount broker, but if not go with a professional- who can lose your money for you (trust me, I know)

Out of town for a few days, expect a delay in any response.

 

[baadboy11]

go for the roth, its the best way to go, and now may be a good time to dump money in the stock market...it will go back up...hopefully.

 

[Capt Jay]

First off get yourself a financial planner. Not one of these big mega stores like Charles Swab. Find a local person who cares if you make money or not and will answer your phone calls. They will go over what funds you want in you Roth IRA. There are very safe, low yield funds. These are funds that aren't going to tank when the economy goes down. They also won't make a lot of money when the times are good. There is the other side of the coin in high risk funds. You should have your portfolio diversified between high and low risk. You should also have some mutual funds. They are funds that are fairly low yield but there is no penalties for early withdrawal. I think of them as rainy day funds. There has been a couple of times that I've had to dip into these when we were on strike.

The advise you get here is good, but we aren't financial planners. Get one and get one now. With the market down, this is the perfect time to buy funds. You have a much greater buying power. If you contribute $100 and a stock is trading at $1.00 a share you get 100 shares. When the market goes up and the stock is $5.00 per share you only get 20 shares and the shares that you bought at $1.00 are now worth $500. If you can afford it get in now. If you can't afford it you need to find a way to. You don't need to invest huge amounts. It compounds over years and adds up to a lot at age 60.

 

[woodyedmiston]

Jim,

Have you considered a second career? Aren't you still in your forties? I'm sixty and have no plans to retire (there is no mention of retirement in the Bible, FYI) and I enjoy working with people and kids too much. Consider working in a large corp that offers benefits and a saving plan that has matching $ to everything you put in. Think big, figure out how much of your supervisory, human resources, and leadership training translates into an asset for a large company. My guess, from what I've read of your posts, is you could be a great trainer, human resources interviewer/background checker, or manager. You can roll that money over into a shared IRA if you leave the company after a few years.

 

[97ranger4x4]

Yeh I agree with working with a financial planner. Their are so many options. I am assuming your wife is thinking of going part time because you can live off your sole income. If that is the case I would reccomend maybe putting 20-25% of her income into several retirement accounts. Out of the total 20-25% maybe half in a higher yield and half in a stable lower yield account. Because she is so young, she has 35-40 years of compounding. And like those before now is a great time to buy stocks because everything is on discount. Now that doesnt mean to just buy whatever. But talking to a good financial planner that is licensed in investments (series 63 license I think) would pay off heavily over your future.

If Vanessa does not mind working full time that is only more money that she can build for the two of you.

Jim you have a pension right? Do you know what percentage you will get after 25, 30 years? How many do you have currently?

I am for investing after tax dollars into an retirement account. You will save in the future when you are being taxed in probably a higher tax bracket. Also if for whatever reason you need to borrow money from your retirement and you pay it back, you will not be taxed twice. if you have say a 401k. you pay pre-tax dollars. If you borrow you get taxed. Then if you repay that money, you have to repay it with your taxed income. then when you withdrawl it again during retirement, you will be taxed again. So if you have a 401k you do not want to withdrawl until retirement.

Sorry for the essay. I spent 6 months as a financial representitive for Northwestern Mutual and learned a lot of pros/cons to different retirement accounts.

 

[Ozwynn]

First off get yourself a financial planner. Not one of these big mega stores like Charles Swab. Find a local person who cares if you make money or not and will answer your phone calls. They will go over what funds you want in you Roth IRA. There are very safe, low yield funds. These are funds that aren't going to tank when the economy goes down. They also won't make a lot of money when the times are good. There is the other side of the coin in high risk funds. You should have your portfolio diversified between high and low risk. You should also have some mutual funds. They are funds that are fairly low yield but there is no penalties for early withdrawal. I think of them as rainy day funds. There has been a couple of times that I've had to dip into these when we were on strike.

The advise you get here is good, but we aren't financial planners. Get one and get one now. With the market down, this is the perfect time to buy funds. You have a much greater buying power. If you contribute $100 and a stock is trading at $1.00 a share you get 100 shares. When the market goes up and the stock is $5.00 per share you only get 20 shares and the shares that you bought at $1.00 are now worth $500. If you can afford it get in now. If you can't afford it you need to find a way to. You don't need to invest huge amounts. It compounds over years and adds up to a lot at age 60.

agreed, but make sure you know what they are investing your money in.

 

[skippy]

What Jay Said.

 

[Capt Jay]

agreed, but make sure you know what they are investing your money in.

What Jay Said.

I believe the top of my head just blew off. (all in fun)

 

[kerry]

I agree that financial planners can earn their fees. I would interview at least 5 and pay particular attention to how much they charge, and how many satisfied clients they give as references.

 

[JohnnyO]

IRA and/or Roth IRA for now. At the moment I'd stay out of stocks and mutual funds and just keep it in CD's or money market funds with a fixed interest.