Retirement Planning

**disneysteve** · 07-26-2018, 07:12 AM

Since your company has no match on the 401k (shame on them), I would open a Roth IRA and start funding that. Maximum allowable contribution is $5,500/year which would be a tad more than 15% of your income, which should be your goal ultimately. The closer you can get to that, the better. If you can't hit that right away due to debt repayment, do as much as you can.

I'm sure this has come up before but how much driving do you do? $350/month on gas is nuts.

And what are your prospects for better paying work or perhaps a 2nd job?

**cdorfish** · 07-26-2018, 07:38 AM

Originally posted by disneysteve View Post

Since your company has no match on the 401k (shame on them), I would open a Roth IRA and start funding that. Maximum allowable contribution is $5,500/year which would be a tad more than 15% of your income, which should be your goal ultimately. The closer you can get to that, the better. If you can't hit that right away due to debt repayment, do as much as you can.

What is the difference between doing the Roth IRA and the standard 401k?

I'm sure this has come up before but how much driving do you do? $350/month on gas is nuts.

And what are your prospects for better paying work or perhaps a 2nd job?

I work for my dad's (smallish) company and live about an hour away. My reimbursement check covers my gas costs. At about 22 work days, it averages about $500 and covers the roughly $300-350 that I spend. It's a difficult thing to decide to leave here, and I'm not quite ready to do that. I have thought about getting like a part-time job at Target (because it's super close) on the weekends to just get additional money to pay off my debt, but living an hour away from where I work, I already spend 50 hours away from home during the week, and I'm not sure if I want to spend an additional 16 away on the weekend.

**bjl584** · 07-26-2018, 08:29 AM

Your original post suggests that you and your husband have separate finances. Is that the case? I ask because most here are advocates of married couples having joint accounts and working together towards a common goal.

Being involved with a family business can be a hard thing to deal with. But, at the end of the day you need to do what is best for you. Your family loves you and will support you if you decide to move on.

You have a fair amount of SL debt. You might want to make that your focus for now. If you want to start a retirement account then a ROTH IRA is the way to go.

**snafu** · 07-26-2018, 09:25 AM

I would like to see you make a [modest] start on retirement, mostly because the sums contributed early have the best opportunity to benefit from compounding. I suggest you read what's on offer at a low cost provider like Vanguard, ROTH, IRA, automatic, monthly contribution system. I do not see a line item, 'pay yourself 1st' savings. Can you manage to baby step saving the initial contribution to open the account? It's ideal to contribute 10% of annual net income to start given the need to focus on SLs. If the opportunity exists, I'd explore part time work at Target so long as you pledge to forgo staff discount shopping.

**disneysteve** · 07-26-2018, 09:33 AM

This is a difficult point to bring up but needs to be said so please don't take offense.

I totally understand wanting to help with Dad's company but at 30 years old, you really need to think about your future. You are driving a long way to earn very little and it sounds like the benefits aren't great either. And you've got over 60K of student loan debt. It's going to take you a long time to dig out from that if you only make 35K.

What did you go to school for? How much could you be earning in a job in your field, not working for Dad?

**Jluke** · 07-26-2018, 10:54 AM

Maybe you are underpaid was my first thought. Especially with all of those student loans.

Is there a potential for more money at your current job?

Is there potential for you to be the owner one day?

As far as retirement savings. Open a Roth IRA. Contribute $75 per paycheck. If you have more $$ then add to it. Invest in ETFs when you have enough to buy at least 1 share (make sure there are no fees to buy/sell the fund you choose). Best bet is Vanguard, Schwab, or Fidelity.

401k: that could be 6-10% too.

Can you convince your husband to let you pay $600 towards the house expenses? If not I am not seeing any extra funds with your current situation. So the above may not even be possible.

**cdorfish** · 07-26-2018, 12:35 PM

Going to try to address all the questions/comments here. Sorry if I miss anything.

Me and DH do have separate bank accounts, but we are aware of any and all money going in and out. We have a joint account for all things related to our home and joint expenses. I understand the want to work towards a common goal, and we are doing that. He's aware and supportive of my debt repayment and I am aware of supportive of his investments and savings. It is all our money, we just keep it in separate accounts. It works for us for now, and this is how it's going to stay at least for the near future.

I am not offended by the mention of me not working for my dad. I understand it and completely see the point behind it. I have a bachelor's in Psychology, and a master's in Criminal Justice. There are other reasons why I work for my dad other than the money, and it includes getting to see my dad every day. We are close and it would hurt me to change that. That may sound silly, I understand that, but to me, that's a perk of the job. I'm not completely opposed to finding another job, but it would have to be the right opportunity.

There is potential for me to make more here, I've already been promoted once and I've been here a little over two years. And my dad tells me all the time that I can own the company one day, so yes, that's a possibility as well.

I am okay with lessening my debt payoff amount in order to contribute to a retirement account. Even if it's less by $300-$500 a month, I would still be paying more than the minimum payment by $400-$600. Is that the correct route to go?

I can definitely start saving to make a minimum contribution to open the account, I will look into those companies tonight. I've just been in a PAY ALL THE DEBT mindset, so it's kind of hard for me not to throw any extra money at that.

I'm at work, and I didn't reread what I typed so I'm sorry for any confusing syntax. Thanks for everyone's opinions so far!

**Jluke** · 07-26-2018, 01:50 PM

I believe in a balanced approach to finances. Especially with 60k in debt. If it were less than you might be able to afford focusing on debt.

Balanced approach:
Some extra to debt.

Some towards retirement.

Etc.

150/month in a Roth adds up to 1800/ year. It’s something and you only get one chance to contribute to 2018 (Jan 2018 to tax day 2019).

Nothing wrong with keeping your finances separate. If you were “drowning” in debt and your husband had enough to pay it off and then some, that is where the teamwork would be good. But you are managing debt just fine.

**Captain Save** · 07-26-2018, 02:18 PM

Originally posted by cdorfish View Post

I work for my dad's (smallish) company and live about an hour away. My reimbursement check covers my gas costs. At about 22 work days, it averages about $500 and covers the roughly $300-350 that I spend. It's a difficult thing to decide to leave here, and I'm not quite ready to do that. I have thought about getting like a part-time job at Target (because it's super close) on the weekends to just get additional money to pay off my debt, but living an hour away from where I work, I already spend 50 hours away from home during the week, and I'm not sure if I want to spend an additional 16 away on the weekend.

if you don't mind me asking .. what does your dad's company do ?

**Smallsteps** · 07-30-2018, 05:11 PM

I have always done both debt payoff and some to retirement. People often fall off the wagon on the debt road and each setback makes retirement farther and farther away if you are waiting to be debt free.
I think the time it has to grow with interest is important. Do what you feel is good there will always be someone telling you do this or that but the reality is you need to be the judge of your success in this area.

**riverwed070707** · 08-01-2018, 08:55 AM

Whats the income difference between you and DH? You mention his savings and his investments but yet you're throwing more than 20% of your income at student loans and have no retirement.

Is it you that doesn't want to combine finances because you want to make your own way or him because you have debt and he doesn't? Maybe you didn't intend for it to come off this way but it sounds like you're making a lot of sacrifices (long commute, taking small pay to put family first, snowballing debt on a low income) while he's padding savings and planning for a future. Feel like you could achieve a lot more working together.

**rishia12** · 08-02-2018, 01:57 AM

Retirement Plan

You will get best plans from various insurance companies as Retirement Plans. Now a days there are many companies who have very good plans with best returns.

**disneysteve** · 08-02-2018, 05:11 AM

Originally posted by rishia12 View Post

You will get best plans from various insurance companies as Retirement Plans.

I realize this is spam but I'll leave it here for instructional purposes.

NEVER do anything for investment purposes through an insurance company, with the sole possible exception of actually buying stock in the company itself. If you want to open a retirement account, look to an INVESTMENT company, not an insurance company. So places like Vanguard, Fidelity, T. Rowe Price, Schwab, etc. If an insurance company is trying to sell you a "retirement" plan, run the other way.

**Nutria** · 08-03-2018, 09:01 PM

Originally posted by riverwed070707 View Post

Whats the income difference between you and DH? You mention his savings and his investments but yet you're throwing more than 20% of your income at student loans and have no retirement.

Is it you that doesn't want to combine finances because you want to make your own way or him because you have debt and he doesn't? Maybe you didn't intend for it to come off this way but it sounds like you're making a lot of sacrifices (long commute, taking small pay to put family first, snowballing debt on a low income) while he's padding savings and planning for a future. Feel like you could achieve a lot more working together.

If they're in a community property state, then it doesn't matter where the money goes, since it's all both people's money.

Retirement Planning