Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I've got 40K in a savings account with very low interest. I'd like to not see it dwindle & to hold onto it as long as possible... either making an investment (buying a house/condo, money market account for higher interest) or saving it for retirement (which is a long way off, but nonetheless, it would be hard for me to accumulate that amount again). I prefer to shun the investment/stocks route... lost a ton of $ in investments before the 90s tech crash... I need stability & would rather make a slow nickle than a fast dime.
I'm in Denver & about to return to CA. In the 2-mos remaining here, I'll do my best to secure employment in CA prior to moving... if I can't, no worries, I'll move anyway sans job. I know that stresses others, but as an unmarried woman with no children, I've done it a dozen times & all's been well, so I don't want to focus on that. I'm open to city... don't care as long as I'm 20-min from the beach/ocean, as I routinely walk on the beach.
Alternately, I could move to a small town (even in another state) & buy a nice condo (in NEPA, where I was born, houses can be gotten for 20-30K... I've even seen that in inland CA), or at least put down a down pmt on a modest house. I have no particular attachment to any particular area, as I've really no family or friends stateside... but, I must live on/very near an ocean. Yes, must. I've lived most of my life mere minutes from an ocean... we all differ, I realize, but, the ocean is my saving grace.
Not really soliciting advice, because as most should do, I'll make up my own mind... but, I'd love to hear opinions on what any of you single working women do? I love the west coast... the time zone fits my body rhythms quite nicely & I've lived in downtown Seattle, L.A., Long Beach & downtown San Diego, so am quite familiar with Pacific living. I love it most, even though I lived many years on the east coast (Boston, NYC mostly). Don't wish to return to the east & am hoping someone similar to me has an idea which may spark a new idea in me.
I've got 40K in a savings account with very low interest. I'd like to not see it dwindle & to hold onto it as long as possible... either making an investment (buying a house/condo, money market account for higher interest) or saving it for retirement (which is a long way off, but nonetheless, it would be hard for me to accumulate that amount again). I prefer to shun the investment/stocks route... lost a ton of $ in investments before the 90s tech crash... I need stability & would rather make a slow nickle than a fast dime.
You can do the following:
1. Subtract emergency fund from the 40k for 6 month living expense.
2. With the remaining pay off a debt: student loan, credit card debt, high interest car loan, etc.
3. If no debt, then take the remaining and once year max out your ROTH IRA to $5.5k. Use Vanguard Target Retirement Fund. Do this once a year and watch your money grow and never have to lift finger but to check it once a year to see if you balanced ok. But Vanguard does this, but you are just checking.
4. Start contributing more to 401K if you are not into good low cost index funds. Max it out fully to $17.5K if you can.
5. If you have down steps 1 thru 4 already, then you simply do nothing and continue saving for your house downpayment one of these days. But make sure steps 1 thru 4 is done before doing anything else.
1. Subtract emergency fund from the 40k for 6 month living expense.
2. With the remaining pay off a debt: student loan, credit card debt, high interest car loan, etc.
3. If no debt, then take the remaining and once year max out your ROTH IRA to $5.5k. Use Vanguard Target Retirement Fund. Do this once a year and watch your money grow and never have to lift finger but to check it once a year to see if you balanced ok. But Vanguard does this, but you are just checking.
4. Start contributing more to 401K if you are not into good low cost index funds. Max it out fully to $17.5K if you can.
5. If you have down steps 1 thru 4 already, then you simply do nothing and continue saving for your house downpayment one of these days. But make sure steps 1 thru 4 is done before doing anything else.
Just my two cents.
+1 on this...
great advice. Regarding the retirement fund, I would definitely go more conservative than aggressive due to the OP's risk tolerance.
1. Subtract emergency fund from the 40k for 6 month living expense.
Hiya Darrell, cheers for responding. Okay, being very generous that would be $40K-12K leaving $28K.
Quote:
2. With the remaining pay off a debt: student loan, credit card debt, high interest car loan, etc.
Fortunately, nil... never had any debt.
Quote:
3. If no debt, then take the remaining and once year max out your ROTH IRA to $5.5k. Use Vanguard Target Retirement Fund. Do this once a year and watch your money grow and never have to lift finger but to check it once a year to see if you balanced ok. But Vanguard does this, but you are just checking.
I'm a bit lost here. All the money I lost in the past was WITH a Roth IRA I opened myself (not through a company) in NC. I'm more than a wee bit distrustful of banks, based on how many I know who've lost money with IDG, pension plans with companies that just shut down & walked away with employees' money (including my mum), etc. In fact, my company is going bankrupt, so I'd need to find a new job anyway... glad I have no investments with them. The $40K is in a low interest savings account with Wells Fargo... not my preferred bank, but since they have offices in CA & CO, I opted to stay with them... despite the multitude of mistakes they've made on my accounts.
Quote:
4. Start contributing more to 401K if you are not into good low cost index funds. Max it out fully to $17.5K if you can.
Never had a 401K. Again my company is going bankrupt & I've known people who worked for Enron & lost everything, hence my asking. I'm basically starting over in a new locale, new job (don't have it yet), etc.
Quote:
5. If you have down steps 1 thru 4 already, then you simply do nothing and continue saving for your house downpayment one of these days. But make sure steps 1 thru 4 is done before doing anything else.
Just my two cents.
In lieu of the above, that's why I was thinking to sock it away in real estate... however, depending upon area, that can be risky. Look what's happened to cities like Las Vegas (amongst so many others) where people are having incredible difficulty selling their condos.
Not panning your advice... just adding further details.
I'm a bit lost here. All the money I lost in the past was WITH a Roth IRA I opened myself (not through a company) in NC. I'm more than a wee bit distrustful of banks, based on how many I know who've lost money with IDG, pension plans with companies that just shut down & walked away with employees' money (including my mum), etc. In fact, my company is going bankrupt, so I'd need to find a new job anyway... glad I have no investments with them. The $40K is in a low interest savings account with Wells Fargo... not my preferred bank, but since they have offices in CA & CO, I opted to stay with them... despite the multitude of mistakes they've made on my accounts.
OK, so step 1 and 2 is complete. good job on no debt right now.
So that leaves $28K to decide on.
Let me ask a few questions and give some comments:
1. How are old are you? I ask because if you are young, you should be savings for retirement, even if you are older. Remember savings for retirement reduces your tax bill now or later.
2. Although things and situations in the past may have ruin people accounts, its importance to stay the course with your retirement investments if you want to retire one day comfortable. Market crashes has been happening througout century and it may happen again. Out of your control and has nothing to do with how you invest your money for retirement unless you are already millionaire .
3. There is no way you can lose with a ROTH IRA tied to a Vanguard Target Fund picked around your age. The only way you will lose, is if you sell all your investments in the ROTH IRA out fear your account is losing large amounts of money in weeks like in 2008-2009. During the times, you don't nothing but continue to contribute. You only sell when you are retired from working. Over time your account will grow in size!! If you don't believe, run the numbers yourself Roth IRA Funds Calculator someone who started this at age 25 will be a millionaire by age 60ish.
You simple contribute to once a year and forget it!! Don't do nothing else. This means if the banks go to hell in the next 5 years, you still contribute your $5.5K a year (or monthly contributions). If the market goes to 0 points tommorow, you still contribute. If the market goes to 1 million points, you still contribute. Why do I say this? because this a retirement account that saves on taxes in the future. Its all about long term investment.
4. If you new job don't have 401K, then you need to use the ROTH IRA to take advantage of tax shelter. As time goes by, look for company that has 401K in the line of work that you like, if you can. This is preference. Just my two cents. the same applies with 401K, you can not lose with 401K, at all!!!!! Unless you sell!!! Contribute to it, allocate it towards your risk level, and forget it til retirement.
5. You can do real estate investments after taking advantage of the ROTH IRA per year. Ask your company when they will add 401K. Atleast with 401k and ROTH IRA, you are saving and reduces your taxes over time for retirement, before making extra investments in real estate or stock investments.
You need to make the decision if you want to save retirement now and plan for it now! To this, you will need 401k and a ROTH IRA.
here is my approach and many will suggest it as well.
The normal working person should be doing the follow if they want retire in peace:
1. Fully max out 401K to company match to get free money.
2. max out 401K to government level, $17.5k, if the options are cheap and index funds.
3. If can't do 2, put whatever you can.
4. After you done with 2, max out ROTH IRA once a year
5. After 1 and 2 is done and the only debt you have is mortage, do nothing. Enjoy life.
6. If step 5 is boring and you still got extra money (dont forget about the kids college help as well) after completing steps 1 and 2, only then you can try other investments, stocks and real estate if you want to.
Doing step 1 and 2 will ease your thinking and stress levels and will ensure you can retire comfortable. Not doing step 1 and 2, then you will be all over the place worry about this and that and what the president is doing and what Cramer say do and this stock went up this much and I need to put money in the bed cause I am scared the world will end soon and blah blah. Prepare for retirement and then worry about that stuff.
This is just my two cents, i am still working on 1 and 2 myself
There is no way you can lose with a ROTH IRA tied to a Vanguard Target Fund picked around your age. The only way you will lose, is if you sell all your investments in the ROTH IRA out fear your account is losing large amounts of money in weeks like in 2008-2009. During the times, you don't nothing but continue to contribute. You only sell when you are retired from working. Over time your account will grow in size!! If you don't believe, run the numbers yourself Roth IRA Funds Calculator someone who started this at age 25 will be a millionaire by age 60ish.
Thank you, Darrell. I'll have to research into this, because I'm not knowledgeable enough with terms to be able to absorb & understand it all.
Quote:
You need to make the decision if you want to save retirement now and plan for it now! To this, you will need 401k and a ROTH IRA.
Brilliant, I'll research both. Thank you so much again.
The risk level depends on the OP age now and the year the person plans to retire. Just my two cents.
I'm over 40 & will retire the moment I can... if I can afford to retire at 62, I certainly shall... if it's 67, well, what can I do. Some perish in retirement... I've had such little downtime in my life, I'm perfectly comfortable walking on the beach, staring at ocean waves & pondering stars (no, not the Pacino kind... haha).
I'm over 40 & will retire the moment I can... if I can afford to retire at 62, I certainly shall... if it's 67, well, what can I do. Some perish in retirement... I've had such little downtime in my life, I'm perfectly comfortable walking on the beach, staring at ocean waves & pondering stars (no, not the Pacino kind... haha).
It all starts with a plan. In my opinion the plan is half the battle. Go to boglehead.org forums for more expert help on your situation and how you plan to save for retirement. I personally enjoy working, its the being in debt part I hate! As long as you can reduce debt and increase cash flow savings (in the right retirement accounts) you will be fine.
Real estate isn't too safe either. I can't tell you how to make a million $ in real estate, but I can tell you all too well how to lose a million in it.
-- From a guy who retired 30 years ago and is now working again to make ends meet.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
