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How to Invest for Retirement
- Thread starter Piecake
- Start date
Haha...I just started contributing this year and I'm maxing out. I'm only 25 so I'm like 90% in stocks right now...let's just say the company match doesn't even come close to offsetting my losses. I'm staying the course though and I still have my Roth IRA to max out this year as well
anonymous_abc
Member
Original Famous Ray
Member
Yea, my Roth and 401k have been taking a beating. Thats ok...I hope it recovers and looks good in 20 years. lol
Walter White Walker
Member
I just got an email from my credit union that the interest rate on my checking account is going from 1.05% to 2.00% effective this month. That'll really help my emergency funds stay closer to pace with inflation. Credit unions ftw.
It's funny - as long as I use my debit card 12 times a month I get the 2% on my checking account. The savings account pays .1%. So I have like $1 and some change in my savings account.
It's funny - as long as I use my debit card 12 times a month I get the 2% on my checking account. The savings account pays .1%. So I have like $1 and some change in my savings account.
Man, thats a good deal. I think I get something like .00000005% interest rate on my checking account.
So my dad (56) just came to me asking about his RRSP ($80,000). It's in a GIC right now, but that's expiring (coming to term?) soon. He's very risk-averse, so he was considering putting it in a GIC. I suggested that instead he put it into a bond fund (VAB), and he seems to be coming around to the idea.
It's not terribly much, but he also has a pension from Ford and the CPP, and lives in Windsor (a low cost of living area), so I think he'll be alright.
IDK, any thoughts? I'm thinking maybe putting at least a little bit into stocks might be a good idea, in hopes of growing his savings a little bit before, but he's very adverse to the possibility of losing money. I should probably also encourage him to save more money while he's still working.
It's not terribly much, but he also has a pension from Ford and the CPP, and lives in Windsor (a low cost of living area), so I think he'll be alright.
IDK, any thoughts? I'm thinking maybe putting at least a little bit into stocks might be a good idea, in hopes of growing his savings a little bit before, but he's very adverse to the possibility of losing money. I should probably also encourage him to save more money while he's still working.
I've noticed myself checking in on it a lot less.
ZackieChan
Member
"A watched pot never boils," my mom always used to say.
RumblingRosco
Member
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Randolph Freelander
Member
Still check everyday.
The thing that annoys me? For the last two months, I've been prompted to update my correspondence delivery settings. Every dern day.
The thing that annoys me? For the last two months, I've been prompted to update my correspondence delivery settings. Every dern day.
For the past couple years I'd gotten into the habit of only checking to confirm when major transactions cleared, or for my month end record keeping. I've been checking all accounts more often due to a personal info leak (thanks, Anthem!) and some of our accounts had unauthorized access attempts. Fun stuff.
On the plus side every attempt failed, the accounts locked and we were notified immediately, so we could update things and make sure we had all security measures in place (two factor). Asset management companies seem to be more on the ball with their security than say, healthcare companies, thank goodness.
Randolph Freelander
Member
It really kinda depends on his pension. If his pension covers his living expenses and the 80K is used for emergencies and fun money then your dad will probably be fine.
If you want him to actually change anything up, your first step is to change his opinion on stocks. He seems to be under the impression that he will incur loses when the stock goes down. You need to convince him that he will only lose money when he sells, and since he has a pension and money in bonds/GIC then he will not be forced to sell it when he will incur a loss. He can wait until it increases in value and then sell it for a good profit while also gaining dividends during that time.
Hah. I have several graphs as well, just updated at the monthly granularity. My favorite graph is actually one that has only a few data points: total investment balance at the end of every year since I started my post-college career, with the last data point on the graph being the current balance. It's sort of the opposite of yours in that it clears out all the noise and just shows the long term trend. (It started at the end of 2003, so it's up to a whopping 13 points plotted so far.) It provides the greatest clarity of our trajectory.
I don't know what to do with my Roth IRA funds. I plan to split the investments across 3 or 4 indexes, but my Roth has only just started this year, so I don't meet the minimum amount needed to be invest. I have setup monthly auto-deposits, and now there is a decent amount in the account, but it's just sitting there.
Should I just let the money sit until I can put it into the index?
Should I invest it in some stocks until I have the money saved up?
When I have enough for a single index, should I just put all the other amounts into that index until I have enough to meet the minimum purchase the next index?
Should I just let the money sit until I can put it into the index?
Should I invest it in some stocks until I have the money saved up?
When I have enough for a single index, should I just put all the other amounts into that index until I have enough to meet the minimum purchase the next index?
You can invest in ETFs which don't have minimums (besides the share price). Basically every index fund has an ETF equivalent. What company do you use?
Fidelity
With Fidelity you can get into their indexes with less than the minimum if you sign up for automatic contributions large enough to get over the minimum within one year. It's not advertised well but chat with their customer service reps and they can help set it up.
Fidelity offers a lot of iShares ETFs commission-free
https://www.fidelity.com/etfs/ishares
Look at ITOT, IVV, IXUS, etc. Lots of good ones to choose from!
Thanks for this. I had no idea that was a feature.
I went ahead and bought $500 of two ETFs that were very similar to two Indexes I was going to buy. I'll talk to them about automating my investments directly into the Index I want next.
A question on ETF versus Index.
IVV an S&P 500 ETF with a net expense ratio of .095%
FUSEX an S&P 500 Index with a net expense ratio of .07%
Doesn't that mean the ETF is a strictly better investment? It looks like they both match the S&P 500, but I would want the account with the lowest expense ratio.
If you have $10K to invest, you can get FUSVX, which has a .05% expense ratio. I wouldn't go nuts over a difference of 2 basis points, though. It is not going to have that big of an impact on your returns.
demosthenes
Member
Damn that amazing. Great match, high paying job or do you put the max away? Or a little of all 3?
Wellington
BAAAALLLINNN'
Congrats Gaimeguy. You are well on your way. I wanted to be at 200k by my birthday in December but I don't think I'll make it due to the foreign market issues we had earlier this year.
Has anyone here done a backdoor roth contribution? I am going to utilize the maneuver before the end of the year to at least hit my contribution limit for 2015. I have actually never contributed to an IRA. Didn't even know they existed before last year, thought it was all 401ks only.
Has anyone here done a backdoor roth contribution? I am going to utilize the maneuver before the end of the year to at least hit my contribution limit for 2015. I have actually never contributed to an IRA. Didn't even know they existed before last year, thought it was all 401ks only.
Original Famous Ray
Member
Nice job GaimeGuy.
My 401k just hit 7k!!! wooooooo lol <sigh> I'm actually about to boost up my contribution to $340 a week so I can get close to the limit. My employer only puts in a measly 10 bucks per week. Still worth doing it anyways despite getting peanuts from management.
My Roth is looking a bit better today compared to the massive drops in August (it was around 27k when the market was going nuts). Its at 30k now which is still not up to the highest point it was this year (32k) but its slowly recovering.
Starting next year I should be able to max my 401k which will be nice to do as well as doing my usual max Roth IRA contribution.
My 401k just hit 7k!!! wooooooo lol <sigh> I'm actually about to boost up my contribution to $340 a week so I can get close to the limit. My employer only puts in a measly 10 bucks per week. Still worth doing it anyways despite getting peanuts from management.
My Roth is looking a bit better today compared to the massive drops in August (it was around 27k when the market was going nuts). Its at 30k now which is still not up to the highest point it was this year (32k) but its slowly recovering.
Starting next year I should be able to max my 401k which will be nice to do as well as doing my usual max Roth IRA contribution.
demosthenes
Member
Nice job GaimeGuy.
My 401k just hit 7k!!! wooooooo lol <sigh> I'm actually about to boost up my contribution to $340 a week so I can get close to the limit. My employer only puts in a measly 10 bucks per week. Still worth doing it anyways despite getting peanuts from management.
My Roth is looking a bit better today compared to the massive drops in August (it was around 27k when the market was going nuts). Its at 30k now which is still not up to the highest point it was this year (32k) but its slowly recovering.
Starting next year I should be able to max my 401k which will be nice to do as well as doing my usual max Roth IRA contribution.
That's impressive to max your 401k, how old are you?
Original Famous Ray
Member
Going to turn 39 next week. Starting saving just a few years ago. Better late than never! I'll be able to max the 401k (18k a year last time I checked) even with my not so great salary (48k). I'm training to be a building superintendent so I will live rent free and will be to afford maxing out my 401k and Roth IRA every year. Well...as long as I'm still a building super.
Wellington
BAAAALLLINNN'
Damn if Gaime is 27 that means he started investing in 2008/2009. What a time. Awesome that you had the balls to just do it. This is the first year I am maxing my contribution, in prior years I was only hitting around $8-$10k.
Yes. It's pretty easy to do, the basic steps are to just open up a regular IRA, fund it, then close it and move the funds to a Roth. Then you have to make sure you put the information in correctly when you do your taxes. There are more detailed guides on how it works scattered around the web. I do recommend reading up and getting comfortable with how it all works before going forward with it.
That you've never contributed to an IRA actually makes it easier. It gets complicated really fast if you have a preexisting non-Roth IRA.
Wellington
BAAAALLLINNN'
http://news.investors.com/investing/100715-774438-americans-save-less-than-chinese-do.htm
The average Chinese savings rate sits at 40%
The average Chinese savings rate sits at 40%
PflargBlarg
Member
While it's a nice thought there's no way that would fly.
Darren870
Member
Besides self employed, they do it here in Australia. Also I believe the UK started doing it too. Employers must contribute to a individuals retirement account.
There isn't any real reason the US couldn't do it either.
But muh freedoms
Tatersalad
Member
From the very same article:
I'm sure Americans could stand to save a bit more, but this hardly seems like an America only problem.
I'm sure Americans could stand to save a bit more, but this hardly seems like an America only problem.
chaosblade
Unconfirmed Member
That's the same reason my savings rate is well above average. Not entirely sure it will matter by that point, but it would be nice to be prepared.
You're right. While America has a poor safety net and therefore the people are forced to save a lot, young Europeans have increased their saving efforts as well, thanks to the baby boomers who will leave us with underfunded social security.
anonymous_abc
Member
My investments are in the black again.
+0,73 %
yay.
+0,73 %
yay.
The market is going to market.
milanbaros
Member?
Does the Japan savings rate not reflect the extremely aged population? Many Japanese people will be running down their savings now, which will result in a low figure. It doesn't mean that the average 30 year old is saving less.
Social security is sort of forced retirement savings. George W. Bush tried turning it into more of a direct account system that allowed citizens to control investment of their money back in 2000, but that plan died when the Dotcom bubble burst shortly thereafter.
Wellington
BAAAALLLINNN'
Have to assume we will all be fending for ourselves financially anyway much like the Russians and the Chinese. I posted the article to show the Chinese savings rate as opposed to how little Americans are saving. We know we aren't saving a lot as a whole.
Calculating my savings rate by (Pre-Tax Contributions+ After Tax Income - Expenses)/(Pre-Tax Contributions + After Tax Income) I am currently sitting at 41%. Wish I had supercharged my savings when I was younger. My only problem is that between my house and my parents I have a lot of cash outlay and can't invest it all
Hi GAF,
I'm new to all this and just read the OP. I'm hoping someone can give me some advice.
I'm 21 and have a couple hundred dollars in my 401k (non-elective contribution if that matters). I noticed that 100% of this is going to a Vanguard LifeStrategy Mod. Growth Fund (Inv). I have the option of transferring this to something like a Vanguard Small-Cap Index Fund (Adm). Is that wise? There are also options like a Mid-Cap index fund and Value Index Fund, all offered by Vanguard.
Secondly, if I had the $3,000 to invest in one of the links in the OP, would I somehow tie that into my 401K? Or would I just transfer all 401K funds to the fund in the OP?
Sorry if these have been answered. The concept of investing is new to me so any help would be great.
I'm new to all this and just read the OP. I'm hoping someone can give me some advice.
I'm 21 and have a couple hundred dollars in my 401k (non-elective contribution if that matters). I noticed that 100% of this is going to a Vanguard LifeStrategy Mod. Growth Fund (Inv). I have the option of transferring this to something like a Vanguard Small-Cap Index Fund (Adm). Is that wise? There are also options like a Mid-Cap index fund and Value Index Fund, all offered by Vanguard.
Secondly, if I had the $3,000 to invest in one of the links in the OP, would I somehow tie that into my 401K? Or would I just transfer all 401K funds to the fund in the OP?
Sorry if these have been answered. The concept of investing is new to me so any help would be great.
chaosblade
Unconfirmed Member
One option would be to simulate a total market fund by putting money into small, mid, and large cap funds.
The stuff suggested in the OP is a separate account than your 401k. You would invest in the 401k through your job, then invest in a personal IRA on your own. When you leave your job you can transfer the 401k to your own IRA.
25, just graduated law school, and about to start working my first "real" job in the next few weeks. Anyone good with personal finance (savings/student loans/etc.) I can PM to try to work out some numbers/ideas? Given my student loan situation (it's bad, coming out of law school) I just want to go over some numbers.
Lucky Forward
Member
Starting back in 2010, newly hired federal employees were automatically enrolled in the TSP (fed 401k) at a contribution rate of 3%, but unless they opt to change it, it goes into the government securities G Fund which is the most secure but pays the least return.
The_Inquisitor
Member
We have had a nice run over the past 1-2 weeks. I'm continuing my auto contributions as usual. I capped off contributions to my savings account some time ago.
Darren870
Member
I guess, though we all plan that social security won't be around when we retire, and even if it is, not something you can live off.