Author Topic: Retirement questions  (Read 1268 times)

Rasputin

  • Stubble
  • **
  • Posts: 108
Retirement questions
« on: November 27, 2018, 05:31:24 AM »
First of all, I知 new so I知 sorry if this is the wrong area. I知 42 years old. I致e been negligent in planning for my retirement. I just opened a Roth IRA and will be able to max that each year at $6,000. I just got a federal job with a pension and TSP (I知 doing 3%. I値l probably max it at 5% match). Most of my money is in VTIVX with a little in VFIFX and VFINX. I壇 like to get the best return I can and be able to retire at 62. I知 also $80,000 in debt (student loans) and $21,000 (car). I earn $73,000 per year before taxes. Any advice on how to do things better?
Also, if I知 adding $500 per month into my iRA, is it better to buy funds when I have a certain amount in or should I buy every time I deposit money (I知 worried about fees killing me).
Thanks in advance. 

terran

  • Magnum Stache
  • ******
  • Posts: 3002
Re: Retirement questions
« Reply #1 on: November 27, 2018, 06:06:45 AM »
Right now you have a saving problem, not an investing problem. Open your IRA at Vanguard, put everything in the 2040 target date fund, do the same in the TSP with Lifecycle funds (L funds), invest as soon as you have the money and otherwise forget about investing for awhile. Fees won't be an issue as long as you stick with Vanguard and the TSP.

Now, with that out of way, head over to the case study section of this forum and post a case study to get some help on reducing expenses so you can pay off that debt and then boost that saving rate.

Rasputin

  • Stubble
  • **
  • Posts: 108
Re: Retirement questions
« Reply #2 on: November 27, 2018, 07:28:32 AM »
Thanks. I値l post a case study with all my expenses tonight.

Dicey

  • Senior Mustachian
  • ********
  • Posts: 13712
  • Age: 62
  • Location: NorCal
Re: Retirement questions
« Reply #3 on: November 27, 2018, 07:36:58 AM »
+1 to the case study suggestion.

MustacheAndaHalf

  • Magnum Stache
  • ******
  • Posts: 2942
Re: Retirement questions
« Reply #4 on: November 27, 2018, 09:48:51 PM »
In your TSP do you have access to "C fund" and "I fund"?  TSP have some of the lowest expense ratios out there, so I'd highly recommend getting equity exposure to those government funds if you can.

nereo

  • Senior Mustachian
  • ********
  • Posts: 13347
  • Location: Just south of Canada
    • Here's how you can support science today:
Re: Retirement questions
« Reply #5 on: November 28, 2018, 08:16:50 AM »
First of all, I知 new so I知 sorry if this is the wrong area. I知 42 years old. I致e been negligent in planning for my retirement. I just opened a Roth IRA and will be able to max that each year at $6,000. I just got a federal job with a pension and TSP (I知 doing 3%. I値l probably max it at 5% match). Most of my money is in VTIVX with a little in VFIFX and VFINX. I壇 like to get the best return I can and be able to retire at 62. I知 also $80,000 in debt (student loans) and $21,000 (car). I earn $73,000 per year before taxes. Any advice on how to do things better?
Also, if I知 adding $500 per month into my iRA, is it better to buy funds when I have a certain amount in or should I buy every time I deposit money (I知 worried about fees killing me).
Thanks in advance.

A few thoughts
  • absolutely do a full case study if you want the best advice tailored to your situiation
  • You've got a 'hair-on-fire' debt emergency; your debt load is ~138% of your income.  While you didn't list your rates I suspect a good chunk of each paycheck is going to service interest on that debt
  • at your income level and debt load, a tIRA is likely the better choice
  • read the 'investment order' to understand where to put your money (link embedded)
  • Don't lose heart - at 42 and with a decent paycheck you have time to turn this ship around.  But the turning needs to start soon before you wind up a wreck on the rocks

looking forward to seeing your full case-study.
Final thought - this isn't just about your retirement.  Getting your finances in order now will give you way more financial flexibility even during your working years.

terran

  • Magnum Stache
  • ******
  • Posts: 3002
Re: Retirement questions
« Reply #6 on: November 28, 2018, 09:15:27 AM »

sparkytheop

  • Pencil Stache
  • ****
  • Posts: 921
Re: Retirement questions
« Reply #7 on: November 28, 2018, 02:35:23 PM »
At the very minimum, you should have 5% in your tsp.  Don't give up instant doubling of your contribution.