retirement?

[UnknownXV]

I don't even know how they can get away with calling it a savings account when it pays basically 0% interest.

[wikiwiki]

So if we do the max Roth, what is that amt? We haven't been paying too much attention to that, just sending a % of his check to it through work. Are you saying at the year end, we should send up to the max to the Roth? What is that?

I have been working part time doing freelance design work for 2 years now and want to get more serious about saving. (hence this post) I am aiming for 12% of mine too - but is the idea to max the Roth accounts for both, even if it doesn't come from my pay?

EF is only $1k now but will be built up with my pay going forward, along with paying off car loan. We had a debt to pay off and now that's gone, we can build the EF up.

So I'm thinking, build up EF, pay 12% to retirement and pay down car loan sooner than 3 years. ? What would you all recommend? Just wanting to do the right thing with the money we have. DH's job is very stable but I do want to have some liquid savings since we have 3 kids and need something saved up just in case. We have ING accounts, is there a better place for EF's?

[sandrark]

So if we do the max Roth, what is that rate? We haven't been paying too much attention to that, just sending a % of his check to it through work. Are you saying at the year end, we should send up to the max to the Roth? What is that?

If you're under 50, the max you can each put in a ROTH, under your own names, is $5K.

I have been working part time doing freelance design work for 2 years now and want to get more serious about saving. (hence this post) I am aiming for 12% of mine too - but is the idea to max the Roth accounts for both, even if it doesn't come from my pay?

Yes! You're paying taxes jointly, so you should make sure that BOTH of you are covered in retirement, even if it means your DH uses some of "his" income to pay for YOUR retirement account. You being a SAHM benefits the both of you, and your retirement should not be penalized just because you are not working FT outside the home.

EF is only $1k now but will be built up with my pay going forward, along with paying off car loan. We had a debt to pay off and now that's gone, we can build the EF up.

So I'm thinking, build up EF, pay 12% to retirement and pay down car loan sooner than 3 years.
?

If it were me, I'd take the $110K combined gross income, and calculate from there. 12% is $13,200 per year. $10K is already in the ROTHs, right? So he should then put half of the remaining $3200 in his 401(k), and you should put an equal amount ($1600) in an IRA with Vanguard or Schwab or Fidelity - whatever is easy for you.

That way, you BOTH get to share in the 12% of your income in retirement.

The only way this wouldn't work out quite so easily is if your part-time income is less than $5000 + $1600 per year, because you have to have EARNED income to put it into a retirement account (there are marital ROTHs, but let's keep this simple for the sake of the conversation right now).

[wikiwiki]

Ok.... so he has 9% going to Roth, 3% going to Before Tax IRA which looks like he'll contribute about $8500 with what he has and what we are planning to for the next 4 months. (He was contributing 10% until now, and it's now set at 12% - plus he got a raise which brought the income up 12%)
So that is not the $13k needed but he is only starting now on the new salary.

Question on the Roth - we have it set to be 9%, but if that reaches the $5k next year, will it let us know and put the $ to the Before Tax instead? (He is with Vanguard) Or should I adjust that %?

For my Roth, I know I am behind... just not sure what to do at this point, do we reduce his % until Jan and put that extra amount into mine to get it closer to $5k?

Or build up EF?

Sorry for all the questions, I really want to get on track and am confused by some of this.

[jpg7n16]

It sounds like you are talking about something different. You must have a Roth 401k option through work. That is something different than the Roth IRA.

There are a couple things going on here.

Through your employer you have a 401k where you he can have up to $17,000:
-Traditional (Pre-tax) or
-Roth (After tax)

If you set up with your employer a set percentage, that's what you have.

In addition to your company plan, you can ALSO do an IRA up to $5k each (assuming income limits are not passed), either:
-Traditional (deductible)
-Traditional (non-deductible) or
-Roth

If he's the only one with a plan at work, and you want to max your Roth contributions, you could do up to 27k combined.

17k Roth 401k
+ 5k Roth IRA (his)
+ 5k Roth IRA (your's)
= $27k max to Roth

[wikiwiki]

Thank you, that clears it up! I didn't realize the employer Roth was different. I wish we could do the max for both of those but that can't happen now...

So I will aim to do the $5k Roth on my own, and keep his at 12% (9% to 401k Roth, 3% to before tax).

If we look at it more and decide we have more to put away, where is that best utilized, his 401k to it's max, or a separate ROTH for him?