Retirement savings.Where to start?

[eeyoresmom]

I need some advice on where to put money for retirement.I tend to get too wordy so will try to keep this to the point. 46 years old, hubby is 50. I work full time but my job offers no 401k, hubby is self employed . A significant amount of my pay is discretionary and hubby and I have different ideas about how to save for retirement.I had opened an IRA with Fidelity just before the crash in 2008. Lost about 30%. I had some debt at that point and decided to close the IRA and pay off debt. I do not regret doing tht, but now am thinking I have to open another IRA. Right now I have about $7000 in an account set aside for retirement, earning less than 1%. Husband has been adament about saving lots of cash, paying off business property and home (will be paid in full this fall) and paying cash for our 4 kids college education (2 down, 2 to go).Any recommendations? I HATE to admit this, but stocks and bonds bore me to death. Don't know why as I am interested in most finance topics. I THINk I am looking for a moderate risk investment. If I remember correctly, my old Fidelity IRA was set up so that as I aged the investments would be swithched to low risk.That would make me very comfortable. Thanks for reading.

[disneysteve]

I would suggest that you open a Roth IRA and start funding it fully ($5,500 for 2013) as long as you have at least that much in earned income. As for how to invest it, what you are describing from your former IRA is a Target Date retirement fund. All of the major firms have them - Vanguard, Fidelity, T. Rowe Price, etc. You pick a "target date" when you expect to retire and the fund automatically becomes more conservative as that year approaches. So if you are 46 and expect to retire in 20 years, you might pick the 2030 or 2035 fund.

What is your husband currently doing for retirement savings? Since he is self-employed, he can have a SEP-IRA which has a much higher contribution limit. And how much is currently put away for retirement?

I'm very concerned about the plan to pay all of the college expenses because it sounds like that has been done in lieu of retirement savings. I hope I'm wrong about that.

[eeyoresmom]

Thank you DisneySteve. No not in lieu of at all. We have real estate investments and a comfortable amount of cash saved. Husband is at least talking about opening a SEP now. He was/is very uncomfortable in the volatile market of late and I am uncomfortable having all of our eggs in two baskets. The 5,500 per year max for this IRA will not be missed fron our budget.

[disneysteve]

He was/is very uncomfortable in the volatile market of late and I am uncomfortable having all of our eggs in two baskets.

The markets have always been volatile and always will be volatile. That's the nature of the markets.

In your Roth or his SEP, you guys can diversify as broadly as you'd like and be as aggressive or as conservative as you wish. Just sit down together, look at your overall situation, your current holdings, your risk tolerance, and your goals and come up with an asset allocation model that you are both comfortable with.

[Petunia 100]

Hubby can also open a traditional and/or Roth IRA. Since he has reached age 50, he can contribute up to 6.5k.

[eeyoresmom]

In addition to the SEP IRA?

[disneysteve]

In addition to the SEP IRA?

You can have both.

[eeyoresmom]

So hubby can have a regular IRA in addition to a SEP and I can have a seperate IRA? The 12,000 per year for both of our regular IRAs is exacatly what I have been saving for retirement of late, so I could continue that and he could make the contrubutions to the SEP.......

[disneysteve]

So hubby can have a regular IRA in addition to a SEP and I can have a seperate IRA? The 12,000 per year for both of our regular IRAs is exacatly what I have been saving for retirement of late, so I could continue that and he could make the contrubutions to the SEP.......

Yep. $5,500 for you. $6,500 for him. That's in the Roths. Then he can also fund the SEP. I'm not sure of the limit there but I think it is something like up to 25% of income.

[eeyoresmom]

Thank you.

[snafu]

eeyoresmom, I hope you'll stay in touch and let us know what you and DH decide, I mention this because it's so easy to put it off, procrastinate and not action the plan. Meanwhile, the months slip by and you lose opportunities like the 2013 funding opportunity.

[eeyoresmom]

Researched last night. I am going ahead and opening my IRA with Fidelity since I was happy with their customer service previously. Goal for June is to open hubby's regular IRA. He will have to open the SEP without much input from me but at least he now agrees.

[afm171]

Just as important as where to put money for retirement, is where NOT to put it.

For example, do not put it in depreciating assets, like cars...