Need to know what I'm missing

**sweeps** · 01-16-2006, 02:31 PM

Re: Need to know what I'm missing

Looks really good. You mention that you just opened your Roth -- did you contribute the max for 2005? You can make 2005's contributions until April 17th of this year.

I applaud your aggressive saving towards the 529, but I personally think it may be a little too aggressive. I would shift $100 to the mutual fund bucket, making it $400 a piece.

Do you have life insurance? Disability insurance?

**Mixelflick** · 01-16-2006, 02:35 PM

Re: Need to know what I'm missing

Thank you for your advice.

Yeah. I have 5X salary I think on the life + some Accidental Death. I bought 70% income replacement for Disability at work. I get the STD for free.

Reason I am funding my 529 so aggressively is, well, that's what the calculators said to do! I can see your point though. Better to max out the Roth first?

I don't know. I just worry that in the event of job loss I'll have to stop contributing to his 529 and that would kill me. I'd sleep much better knowing it's paid up and all I had to do was keep the lights on.

**Mixelflick** · 01-16-2006, 02:36 PM

Re: Need to know what I'm missing

Sorry... I haven't funded the Roth yet. Just started this month.

**sweeps** · 01-16-2006, 02:46 PM

Re: Need to know what I'm missing

I'm very for funding your child's 529 as soon as possible. However, here's my reasoning for backing off a bit. First, even though it is very unlikely, there is a possibility that Congress will allow the tax-free treatment of 529's to expire in 2010. You'd really kick yourself if that happened. Second, you can always get loans for your child's education. You can't get a loan for your retirement. 18 years from now, if your retirement fund is overfunded, and your 529 is underfunded, you can always use your Roth to help pay for the education. Worst case, low-interest student loans. Third, there is always the possibility that your child will not need all the money the calculators say he will. He may choose not go to college, or he may get scholarships, or there are other possibilities as well. The 529 fund limits your options in this respect. Just my 2 cents.

**Mixelflick** · 01-16-2006, 02:49 PM

Re: Need to know what I'm missing

I hear you. Good advice.

Thanks!

**Snoopy2645** · 01-16-2006, 03:19 PM

Re: Need to know what I'm missing

Wow you look like you are doing great for being 36

**sweeps** · 01-16-2006, 03:20 PM

Re: Need to know what I'm missing

No problem. Thought of one more thing.... As a compromise on the 529, you can reduce your regular contributions a little bit, and whenever cash gifts come in for your child (birth, baptism/christening/bris, birthday, holidays, etc.), deposit them directly in the 529. Family members and friends seem to be more willing to give cash if they know the money is going to your child's college fund.

Side note: I totally agree with Snoopy, you're doing fantastic. Keep up the good work, but don't overstress. Enjoy the time with your family and set aside a little money for fun and entertainment.

**Mixelflick** · 01-16-2006, 03:23 PM

Re: Need to know what I'm missing

Thanks everyone.

I actually just woke up to this financial reality. Didn't know I had been doing a lot of things right just instinctually I guess. I've always hated debt.

And the best thing I ever did: Filled out a 401(k) enrollment form at 23. At least I can say I never left any "free money" on the table.

**gakline** · 01-17-2006, 04:52 AM

Re: Need to know what I'm missing

I think you can make Roth IRA contributions for your spouse (i believe the full $4000). Something to check into.

**Ima saver** · 01-17-2006, 07:57 AM

Re: Need to know what I'm missing

Mikel, I agree with sweeps. Every thing I have read says pay more attention to your retirement funds (mutual funds) than to a 529. You can get loans for college but not for your retirement!

**Ima saver** · 01-17-2006, 07:59 AM

Re: Need to know what I'm missing

Make sure your mutual funds are no load also.

Need to know what I'm missing