Author Topic: Where to start??  (Read 1988 times)

walk.reed

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Where to start??
« on: September 29, 2013, 04:06:22 PM »
Hi Friends,

I'm hoping I can get some advice. I've been reading and enjoying the blog, but I haven't seen anything specific to my financial situation.

I feel like my wife and I are in a pretty good financial spot. We are in our mid-20s with no debt and about 15k in a Capital One savings account. We don't have a strict budget, but we are both savers by nature and just try to save as much as we can. Our annual combined income is about 50k. We are currently renting and are hoping to put a good chunk (if not all) of those savings toward the down payment on a house soon.

What we don't have is any retirement savings. I've been working for myself until recently, and just haven't known where to start besides a regular savings account. The job I just got doesn't currently offer any retirement either. I'm thinking that it would be good for us to start contributing to some kind of account, and maybe if I have a job with one in the future I can roll it into that? But I know very little about them. Should I do a traditional IRA or a Roth? Why? What company should I go through? Or is there even something else I should be doing besides this?

I'm open to any advice about other ways to save as well. I don't want to put all our extra money into a retirement account just because it makes me a little to not have any savings in an accessible place. What else can I do? Where do we start?

walk.reed

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Re: Where to start??
« Reply #1 on: September 29, 2013, 04:07:43 PM »
Another thing I wonder about.... we don't have life insurance. Should we?

Gerard

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Re: Where to start??
« Reply #2 on: September 29, 2013, 05:07:43 PM »
Track your expenses for a month to see if there are holes that you could plug so that you can save more. Avoid life insurance until and unless somebody is financially dependent on you.

electricworm

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Re: Where to start??
« Reply #3 on: September 29, 2013, 05:45:10 PM »
The only reason you would need life insurance is if there are people dependent on your income and/or to pay for your funeral. Any debt you have personally would not need to be paid back if you died. It dies with you.
If you died and your wife relies on your income to pay joint debts, mortgage, etc, then yes you'd want to leave her something for that. It sounds like she works and wouldn't be left with expenses she can't cover (?). However, you probably wouldn't want to leave her with the burden of paying for your funeral (I hear numbers like $10k - maybe you can self insure here, but something to keep in mind).
If you have kids, yes, you'll want term life insurance that expires before/after college, depending on when you would plan for them to be supporting themselves.
If you plan to have kids, doesn't hurt to get the life insurance now when you are young and healthy. It really shouldn't cost much, but it will be more expensive as you age.

It seems like a lot of employers pay out one year's income to your beneficiary if you die. May want to check with your HR department. They may also offer low cost life insurance.

Charlotte

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Re: Where to start??
« Reply #4 on: September 30, 2013, 04:30:55 AM »
Just a quick note re: retirement savings. It sounds like you would qualify for the Saver's Credit on your taxes. Regardless of whether you use a Roth or a Traditional IRA. Just something to think about as an added benefit.