(Closed) How do you allocate your savings/retirement money?

posted 9 years ago in Money
Post # 8
1794 posts
Buzzing bee
  • Wedding: August 2011

You need to meet with a fee-only financial planner. They will help you figure out how much you need for retirement and what contributions you need to make. Also, one of the big reasons people get in trouble with retirement is not taking enough risk. It sounds crazy, but if your young, you need to take some smart risks (stocks) in order to earn enough interest to beat inflation. A financial planner can help you understand how to divide your investments between stocks, bonds, etc. based on your age.

Post # 9
15461 posts
Honey Beekeeper
  • Wedding: June 2011

I max out my 401k and Roth IRAs every year.  Roth is best to get started as early as possible so it can start growing, and everything that it makes it tax free.  401k is pre taxed money and tax deferred, so right off the bat, you have 25-30% more money to invest and work for you depending on your tax bracket.  IMO, if you’re saving for retirement, nothing can beat the leg up that tax free contributions of 401k gives you.  Take ANYTHING your employer will match, even 50%.  If you get these started now and max it out, you can always decrease it later if you find you need more cash on hand, but  the money in there already will have more time to work for you and grow and time is the key.

Post # 10
893 posts
Busy bee
  • Wedding: May 2013

@Robin_Sparkles:  Maximize your company’s matching and if you can, maximize your IRA as well.

Post # 11
913 posts
Busy bee
  • Wedding: April 2014

View original reply
@msfahrenheit:  Agree with this totally! OP, the key is “fee-only.” Other financial planners work on commission and will try to sell you investments that may not be in your best interest.

I don’t even think you need a financial planner necessarily, just a few basic books. I would start with Ramit Sethi’s I Will Teach You To Be Rich for personal finance and Bogleheads’ Guide to Investing for investing.

Post # 12
10354 posts
Sugar Beekeeper
  • Wedding: September 2010

You’re throwing away free money right now by not taking advantage of the 50% matching up to 5% on your 401k. Start by kicking that up to AT LEAST 5%.

An IRA is a good deal if you think your taxes now will be less than your taxes when you retire (since that is after-tax income). We hedge our bets by contributing to both. You can only put $5000 a year into an IRA, so we max that out, and then put 15% of my income into my 401k. My husband gets a pension, so that is additional income on top of our savings.

We’ve done our 401k and IRA investments to mostly track the DOW and S&P500, and have made really substantial gains in the past few years. We’re feeling pretty secure about things at the moment!

Post # 13
10354 posts
Sugar Beekeeper
  • Wedding: September 2010

Also, it should be said that you can change how your money is allocated within the 401k/IRA at any time. You can move it from stocks to bonds or to straight cash if you see the economy headed to a big dip again. People lost their life savings because they didn’t think a dip that big could happen, and did not take action. We know now that it can – so I think our generation will be a little quicker to act in the future.

Post # 14
6109 posts
Bee Keeper
  • Wedding: August 2012

Fiance and I attended a free retirement workshop through our work (we work at a university), and have another one planned later this year.  It was a 6 week course.  Just a nice way to get educated on some things and they showed us a ladder worksheet.

Basically we try to max out as many accounts as we can.  We have two ROTHs, two 457b, a 403b and HSA account.  Then – thankfully – our work puts in 14.2% of our salaries each into a 401a (no contributions are allowed to this one) on top of that.

I visit once a year with my TIAA-CREF person to help me allocate my accounts.  We rebalance annually too.  Perhaps wherever you have your current retirements with will have some planning suggestions for you, or you can go with a financial planner like others suggested.

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