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And with the knowledge you have now, what would you do in order step by step financially,from the start of college to retirement , if you have to take student loans to pay it all? Friends are also interested with financial but they do not have any money for college.
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That is a much more complicated question than it seems.Originally posted by ninja_sam View Post
If they have any other debt (credit cards, car payment, etc.) they should likely follow this plan: http://www.daveramsey.com/media/pdf/fpu_babysteps.pdf
But general step by step advice is just that - general. Not specific to their situation. Not specific to their risk tolerance. Not specific to their goals and dreams. Not specific to their tax situation.
It'd be very general advice.
For retirement accounts, 1st determine if you're ready to save for retirement. (no debt over 6% interest, and EF in place of 3-6 months)
Do you need to pay for school? Then company match only. Rest goes to school to avoid loans
2nd determine your tax situation.
Are you lower than the 25% tax bracket? Take company match, then fund Roth IRA.
Are you higher than the 25% tax bracket? (or in 25% bracket + state income tax) Then save for retirement in 401k.
Are you in the 25% bracket? Then do half and half. (if saving 10% of income, do 5% in 401k, and 5% in Roth)
But that question is so complicated because financial planning is complicated. See the CFP boards topic list for the CFP exam: http://www.cfp.net/downloads/Financi...ics%202006.pdfComment
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