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Strange that I got to page six and not one person asked him his planned age of retirement, nor did anyone discuss his investment mix for his 401K which because of his age need to be at the right risk level.
OP you should go to the personal finance section of this forum to get advise. You get some motivation here but you will get better financial advise as well at the other forum.
Your debts are a problem and, your income is not bad but nothing to really brag about either at your age., and you have no assets at all. But the worst thing is your financial discipline (which it seems you have come to terms with). You can still catch up by your mid to late 60s but you need some financial advice that might be out of scope for this particular forum. But you have to have a goal - what age of retirement, what income level do you want in retirement?
Strange that I got to page six and not one person asked him his planned age of retirement, nor did anyone discuss his investment mix for his 401K which because of his age need to be at the right risk level.
The retirement age is a fair point. He talked about working until 70, though.
His current investment mix is really not an issue. He mentioned in the opening post he has $4200 in his 401k. Whether he earns 1% on that or 10% is not going to matter. For now and the next few years the big lever is savings and debt repayment. Hopefully he gets a handle on the investment stuff by the time he's got, let's say $100K in his 401k account, which is a few years down the road.
Thanks moving onto finicial advice section. I just started a new gig last year W2 143k. This year im.building business. All comments were helpful, im X athelete do i dont mind a kick in the butt with the truth. Thank you all and i mean it. To the ones who kicked me in the butt thanks. Its all apart of waking up.
I had that in the back of my mind all along. It is a personal responsibility thing. At no given time in my life did I individually came close to that sort of income even on my best behavior. Combined income is another thing but DW and I did the right thing. We lived within our means. We worked out what issues came along. Didn't take extravagant trips but still had a great time with family and friends. Criticism is to be expected and should be given. At 51 I woke up and realized that all along the way I was on track. I didn't have the entire picture since that was 9 years ago but it was a lot easier knowing.
But when the OP admits he knows he made mistakes and is turning his finances around, continuing to flog him is a kind of smug and/or self-righteous back-patting. We've all made mistakes, some dumber than others. That's life. We can learn from others and still resist the urge to speculate, needle, carp and carry on about lifestyle choices.
SPY and VOO are ETFs that mirror the S&P 500. SPY has been around since 1993. It keeps all dividends as cash so it is just about identical to the S&P 500. Day traders use it and a huge fraction of the shares are bought & sold every day. VOO is the Vanguard version of it. It re-invests dividends. It has the lowest expense ratio of the S&P 500 index funds. For a buy & hold investor in an IRA or 401(k), it makes sense to go with the lowest expense ratio which is why it's popular to have in an IRA brokerage account. There are a bunch of similar ETFs like IVV, too. Because of the way dividends are handled, taxes are slightly different across the different versions of S&P 500 index funds if it's in a taxable portfolio. SPY does slightly better in down markets because the dividends are kept as cash. The others do better in an up market because the dividends are re-invested. You need a pretty big portfolio to care much.
If you believe that large companies are going to continue to dominate the economy and that the United States is going to lead the way globally, the S&P 500 is a good place to have your money long term. I believe that but I tend to be 100% wrong in all my predictions so my opinion is as valid as a dart board or Ouija board.
My 401k plan is held by fidelity and they want to charge me a small monthly fee to help me manage my plan or i can just choose something on my own. I let them help me last year and my 401k grew by 9%.
I see here I can go from conservative to agressive with my contributions
The index options are Bond - US debt index
Stocks Equity index, large blend
Small blend - index fund M
International global Index fund M
Then i see vanguard target retirement trust options
I con contribute 1% to 75% of my check as pretax., there is also an annual automatic increase plan available if i want to increase it by 1% automatic each year.
I also see a Roth 401k option here
Company matches 100% up to 8%
I am immedialty vested at 100%.
Do i pay fidelity $1 to 3$ a month to help me grow the 401k or do it myself?
I don't see an option for an index option like SPY or Vanguard VOO.... I will ask, but please share your thoughts. I already told them to take out 8% yesterday into the same plan that got me a 9% growth the year prior.
Happy Wednesday folks
Well you have a great attitude...Not sure why you don't clean up your debt? I didn't read every post so maybe I missed it. Also your credit score is affected by debt, maybe I missed that too. Why work to 70 if you don't have to? The market is hot but you should be shifting a % to a stable income,& yes I would use a Pro to analyze my finances at least until I'm stable in my planning. I'm not sure if this thread is serious or you're just having some fun? Whatever, good luck...
Oh well i woke up finally at 51 and only have $4200 in my 401k and I owe the IRS over 65k and I owe the student loan people around 45k.
THE GOOD
I make over 120k a year, car is free and my rent is $600 and I have no kids....
My company matches 100% up to 8% with my 401K.
I went with 8% and I only claim one dependent for taxes.
My buddies wife told me i can do it if i get serious, which I have no choice now....
She told me to send my performance bonuses checks straight to the IRS so i don't even see them.
Is there any other advice folks can give me? other than I am a total fool for waiting so long. (:
I haven't read to the end, but if you are single and making 120k per year, you should absolutely be contributing the max (24k) to your 401k. It will reduce your tax bill significantly. And you are not on track to have your 0% bracket full in retirement, so it is a complete no-brainer.
A rented room and a paid for car, no other consumer debt to service? You could have your debt GONE in 3 years.
In the US, any senior who has worked for 10+ years can actually survive without major difficulty (although not in luxury) even without any savings/investments, since there is a social security income, low-income senior housing, and Medicaid. One becomes eligible for some of it (eg, housing) as early as age 55. Savings/investments are necessary for having more freedom, for being able to retire early, or for being able to leave something to kids (unnecessary if one has no kids). That's my view of things, at age 57 (I do have savings/investments, though, which I have mostly applied to early semi-retirement starting around 50). Just pay off that debt gradually, don't waste precious time (and from the 50s onward, time becomes ever more precious) obsessing about money.
Know that Roth IRA's have income eligibility rules, and it sounds like you may not be eligible for the full contribution amount. If you make too much in a year, you can contribute to a Traditional IRA. Copied below are the limits for Roth IRA's for 2017. Also, your contribution for your 2017 IRA can be made until April 15, 2018, which at your age is $6,500 for calendar year 2017. You have been advised to get a tax attorney for your IRS issue, she or he can advise you on the IRA item.
Roth IRA Income Limits for Single Filers
If you file as single, head of household, or married filing separately (if you did not live with your spouse at any time during the year) your income must be less than $118,000 to contribute up to the limit.
If your income falls between $118,000 and $133,000 you cannot contribute up to the limit. Your contribution is reduced. Use the IRS worksheet to calculate your new reduced Roth IRA contribution limit.
If your income exceeds $133,000 you cannot contribute to a Roth IRA.
Thanks for showing the electronic public your imperfections. I think it was brave.
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