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22 years old - opened up a Roth IRA. How else can I save for retirement?

Discussion in 'BBS Hangout' started by jacoby, Jul 6, 2018.

  1. justtxyank

    justtxyank Contributing Member

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    A few things to throw out there:

    1) On 401(k) vs IRA: It's not JUST that a 401(k) is employer driven with a match that makes it attractive. Most 401(k)s have a loan feature that allows you to loan yourself your own money at interest that pays back into your own account. Again, a leverage tool to put in your toolbox.

    2) Depending on your financial situation there are other tools to explore. Cash value life insurance is, again, an enemy of Dave Ramsey, but depending on the actual product is a tremendous tax advantaged tool you can leverage. Building a buck of cash value that you can then "loan" yourself tax free in retirement is a great thing.

    3) If you are keeping cash that you want to be liquid and can't risk losing in the market, at a bare minimum do yourself a favor and open an Ally savings account (or other high interest online account.) Ally I believe right now is yielding close to 2.5% on their savings accounts which blows away traditional banks and credit unions.

    4) However much you think you'll need in retirement, you're wrong.
     
  2. mrm32

    mrm32 Member

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    Keep track of your basis in case you ever need to withdraw any of the principal amount plus for other potential tax situations down the line.
     
  3. dmenacela

    dmenacela Contributing Member

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    In order of importance - retirement, emergency savings, mortgage or 529 (depending on your personal situation)
     
  4. rimrocker

    rimrocker Contributing Member

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    Study climate change effects. Buy property in places that won’t be terribly affected in the next 40-60 years. Quite a few of those places are going for a cheap price these days. Buy enough to live on and sell in increments over time.

    That’s one of the things I’m doing for my kids.
     
  5. Deckard

    Deckard Blade Runner
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    This (anything not to think about how pissed off I am at the refs!). Good advice from @Manny Ramirez. My daughter was a lead software developer and recently got promoted. She has several people working for her, being pulled into management (she fought it, but they offered more than she could turn down). She’s 27, 28 at the end of the month, and already has enough saved to live on for 3 years, if she lives like she is now. Has a 401(k), has a lot invested with Vangard in mutual funds, and other investments I would have to ask her about.

    Yeah, she’s my kid and I’m bragging. I’m very proud of how successful she is. Graduated with two degrees in 4 years, Computer engineering and computer science. What’s interesting to me is how frugally she lives. Hasn't spent a pile on an expensive car. Has a very nice apartment here in Austin, but it’s small. She could afford a condo or a house if she wanted. That’s something else you can do. Live below your means.

    Kudos. It sounds like you’re being smart. You are asking the right questions. Think of where you want to be financially in 5 years, then make it happen. Also, consider changing jobs and going with an employer that’ll match. You deserve it.
     
    Junebball and Manny Ramirez like this.
  6. Commodore

    Commodore Contributing Member

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  7. Ziggy

    Ziggy 99ers STAND BY
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    What funds yall in though?
     
  8. Nook

    Nook Member

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    These are all good points.

    I would also add the following, young guys REALLY need to pour as much money as they can in a 401K when they are single and have more disposable income. The earlier the money hits the 401K, the more it makes and also, once marriage and children and middle age hits.... there are a lot more bills involved and often, less spare money to add to a 401K.

    I have a friend that has made a lot of money in real estate, but he is extremely handy at fixing things up, has the free time and currently has 20 rental homes that is netting him a really nice return. However, there is no way to LOSE money faster than real estate as well. For most people, go the 401K route.

    I know an attorney in his late 50's that has about 1.5 million dollars in his 401K. He may be forced to retire early and has serious concerns about whether it will be enough.
     
    justtxyank likes this.
  9. fallenphoenix

    fallenphoenix Contributing Member

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    VFINX is my biggest position
     
  10. Ziggy

    Ziggy 99ers STAND BY
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    Looks like I'm heavy on these: VTSMX, VBR, VOO - should I go with VFINX this year? I mean... nobody knows anything. But I'm listening.
     
  11. Nook

    Nook Member

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    I know an Assyrian that makes a lot of money by loaning money to people on the South Side of Chicago.

    He charges 5% interest a month.

    He has about 150 large out there right now.

    over 90% of the people pay.

    He has two collectors, they take 1% each month each and do some other stuff for him. Mostly quasi mortgage schemes where they "rent to own".

    He told me he can almost double his money in a year.
     
  12. jacoby

    jacoby Member

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    Hey I forgot I made this thread lol. Good to see it's still alive and well.

    I'm 100% invested in VTSAX -- both in my Roth and brokerage account. I was told that I should expand and have some international investments, but VTSAX includes companies that have plenty of international exposure, so I don't really find the need to do so at the moment.
     

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