I need advice from someone who is educated in retirement plans?
I’m 19 and my husband is 20 and we just got married 2 months ago. He’s in the military so I just relocated and haven’t found a job yet, but I am halfway done with my Bachelors degree. Anyways, we’re very cheap and love to save money. Both our new cars are paid off, and the army pays for rent and utilities for the most part, so we have a good handle on our bills.
Anyways, so far, after paying off our cars and buying all new furniture for our house, we have about $33,000 in savings, and until I get a job, we’re putting $400 into savings each month. Whenever I get a job, pretty much all of my income will go into savings, since we don’t like to have more than $2,000 in our checking account at any given time. Well I’ve been talking to my dad and he’s saying we should start a retirement plan, but he gets so confusing so after that I had no idea what he was talking about.
I was wondering if someone could explain what a 401K is or an IRA or any other kind of plans there are out there? More specifically, one that would be the most beneficial in our situation? Thanks alot!
No we don’t own a house yet cause of the military and moving around and stuff. He will be out within 2-5 years (depends if he reenlists or not) and we’re going to move back to Ft. Worth, Texas where we’re from. We’ll be buying a house there. Until then, just renting though.
401 k, a retirement mechanism offered by employers for their employees to save for retirement. Most companies have a limit you can contribute in absolute dollar terms – also set by the irs, i don’t know the limit now, i have retired, a few years ago it was 10500.
A roth ira, a nonemployer sponsored plan. If you have earned income and subject to certain restrictions, you can save i think it is 2500 per year per person as long as you earn at least that much. Now if you earn over 165,000 a year there is a max you can put in.
Your husband can open the roth – do that
When you get a job, open a roth and take advantage of the companies 401k. As for right now, your very young, a good emergency fund, and setting aside money for the house you will purchase someday is a good idea. But feel free to start your roth now. Good luck
Go to USAA.com and speak to one of their Financial Advisors. They specialize in helping military personnel, because they are the credit union for military only. investopedia.com is a good source too. If your interested in doing it yourself I would look into books by Peter Lynch or William J. O’Neill’s The Successful Investor. O’Neill’s strategies have saved me thousands and helped triple my portfolio in the last year. He is the founder of Investor Business Daily. Take all of your money less 10-15 thousand for an emergency account and put it into an IRA or mutual fund. The good thing with them is that you can use them for a one time house purchase penalty free.
Do you own your own house, because right now is a good time to buy if not, and paying down on a mortgage is almost always a sound idea. Consult the Financial Advisors at USAA.
There is not many people that can tell you at this time. EVERYONE has been taking a big hit on there retirement funds.
All I can say at this point in time. Is save you money and put it into you new home. when you do buy it get it paid off at soon as possible. Therefore when your ready to retire you will not have a house payment. When you go for the loan get one for as long as possible therefore in hard times you wont have a really large payment. but while you can put as much as possible in the the principle to pay the mortgage off faster saving you huge interest over the term of the mortgage . retirement funds will return someday but not right now.
When the house is paid off it will give you all that extra mortgage money to invest into your retirement funds.
Get a mortgage with a NO prepayment penalty.
Food for thought.
Hope this helps in some way.
PS missed you on here
TSW