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'm 47 years old, single and due to illness had to cash out my employers 401k a few years ago. Luckily I have fully recovered now, and am making decent money ($70k per year) and have $90,000 to invest from the proceeds of selling a house.
I have six months of living expenses saved in my savings account in addition to the $90k and have no debt. I'm currently renting a home and don't plan on purchasing another one any time soon.
I know I need to open an IRA as soon as possible. I'll fully fund it this year and probably do monthly payments next year.
I'm deciding what to do with the $90k for the best return for the future. With 20 to 25 years left till retirement I feel comfortable being somewhat aggressive with it. I should be able to afford to invest another $500 per month in addition to my future IRA contributions.
My parents want me to go with their Edward Jones guy but after reading threads here and online I know that is not the way to go. I'm leaning towards Vanguard.
hate to say it, if you havent been investing much for the last 20 years, your lifestyle expenses may not let you invest a lot without large changes. $500/month isnt very much money for retirement.
at age 50, govt lets people put a little over $30k/year into retirement accounts (401k/ira limits). it would be hard for you to earn more money via overtime (younger people seem to get by better on those 60 hour weeks) and most are hitting their income highs around your age as well (hard to make career changes/go back to school and start over)
basically saying, you may need to start to learn to cut expenses as well as invest if $500/month is what you can put away since it wont allow you to maintain current lifestyle in retirement. learning to live on what it can sustain now lets you make adjustments/accept it and not have it dropped on you.
or start looking at cheaper areas to retire in
avoid edwardjones, they are all over the low income areas because they prey on poor financial skills
Thanks, I've considered that as well. How do you figure out which should perform better over 25 years?
Where do you live? :-)
I would check the S&P 500 verses what the calculator produces... But I would also ask someone who has experience in the area of rentals (not me) if the calculator numbers are reasonable.
Yes, I agree. And I meant I can save at least $500 per month IN ADDITION to as much IRA contributions is allowed for my age. I may be able to save a bit more but $500 at least.
And yes, I plan to retire somewhere cheaper to live. Mexico or somewhere in South America since I speak Spanish. Plus I should have over $2500 in Social Security coming in per month.
Quote:
Originally Posted by MLSFan
you plan to work to 70-75? will you be able to?
hate to say it, if you havent been investing much for the last 20 years, your lifestyle expenses may not let you invest a lot without large changes. $500/month isnt very much money for retirement.
at age 50, govt lets people put a little over $30k/year into retirement accounts (401k/ira limits). it would be hard for you to earn more money via overtime (younger people seem to get by better on those 60 hour weeks) and most are hitting their income highs around your age as well (hard to make career changes/go back to school and start over)
basically saying, you may need to start to learn to cut expenses as well as invest if $500/month is what you can put away since it wont allow you to maintain current lifestyle in retirement. learning to live on what it can sustain now lets you make adjustments/accept it and not have it dropped on you.
or start looking at cheaper areas to retire in
avoid edwardjones, they are all over the low income areas because they prey on poor financial skills
Yes, I agree. And I meant I can save at least $500 per month IN ADDITION to as much IRA contributions is allowed for my age. I may be able to save a bit more but $500 at least.
And yes, I plan to retire somewhere cheaper to live. Mexico or somewhere in South America since I speak Spanish. Plus I should have over $2500 in Social Security coming in per month.
if you are maxing out retirement accounts for 20 years, you should be fine?
why not start with what the company 401k offers, then use ira/extra to fill in gaps?
in tsp, i use 50/50 C and S and ira for anything else i want. G fund will be bond fund later for me so i dont need it in IRA.
the I fund in tsp is a bit lacking so i dont use it, and FERS pension will cover fixed income so the F fund is out as well
instead of randomly picking what sounds good, i stick with an index and find one that 401k doesnt cover. if i want it i add, if not i dont. no real reason to duplicate things in 401k, if i want more, i add more to the retirement fund and not go looking for an "alternative"
but i realize tsp is fairly cheap as far as 401k options go, others might not have similar options
I'm 47 years old, single and due to illness had to cash out my employers 401k a few years ago. Luckily I have fully recovered now, and am making decent money ($70k per year) and have $90,000 to invest from the proceeds of selling a house.
I have six months of living expenses saved in my savings account in addition to the $90k and have no debt. I'm currently renting a home and don't plan on purchasing another one any time soon.
I know I need to open an IRA as soon as possible. I'll fully fund it this year and probably do monthly payments next year.
I'm deciding what to do with the $90k for the best return for the future. With 20 to 25 years left till retirement I feel comfortable being somewhat aggressive with it. I should be able to afford to invest another $500 per month in addition to my future IRA contributions.
My parents want me to go with their Edward Jones guy but after reading threads here and online I know that is not the way to go. I'm leaning towards Vanguard.
Thanks for any suggestions.
Audrey
I agree with you. Go with Vanguard.
There is more than one good option.
I personally like Vanguard Wellington. 2/3 stocks 1/3 bonds (strictly investment grade--no junk bonds). Good returns, and like all Vanguard Funds, very low expenses. You can use it for both your IRA and your taxable account. If you invest $50,000 in the fund, it has an expense ratio of .16%...which is in the neighborhood of what they charge for their index funds.
20 year returns for Wellington (8.16% annualized for the more expensive share class) are slightly better than for their S&P 500 Index fund (7.38% for their super cheap "institutional" share class), with much less volatility. We certainly can't guarantee the next 20 years will be like the previous 20, but even if it trails the S&P 500 somewhat, it still has a better "sleep at night" factor.
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.
