Hi – I hope I am doing this as correctly as I can. Here goes nothing…
Gross salary: Normally $53K-$55K (likely in the mid-40s this year (7 weeks FMLA unpaid)
Annuity: $6,100/year after tax for life
Minimum Monthly expenses (around $2000 including funding Roth)
Emergency funds: Two years of expenses (job is stable now but politician changes in the future may affect that – little action in my field right now to find a new job)
*$35,000 in savings at Barclay (currently 1.00%)
*$10,000 i-bonds (2013’s max). Will probably continue to move $10k per year until all emergency funds are in i-bonds.
*$5,000 B of A (.01% - but where my checking is and most immediate access)
Debt: Zero debt. House and cars are paid off. No student loans. One credit card used to get points and paid off monthly.
Tax Filing Status: 2012 – Married (I guess… my wife died 12/15/12)
Tax Rate: 25% Federal, 5% State (2012) – For 2013, I anticipate my salary after maxing out a 457 to barely creep into the 25% bracket, if even that. State remains 5%.
State of Residence: IL
Age: 42 in May
Desired Asset allocation: xx% stocks / xx% bonds – I am not sure…70/30 to 85/15 ???
Desired International allocation: xx% of stocks – I am not sure
Current retirement assets
No 401k – I have a 457 available through ICMA-RC which I plan to max out. Fund choices and expense ratios:http://www.icmarc.org/investments/457-a ... plans.html
Currently at $0. Will contribute max $17,500 per year beginning March 2013 (biweekly contributions) (I am currently on unpaid FMLA).
His Roth IRA at Vanguard
100% Target 2035 (VTTHX) (0.18%) I just opened and fully funded a Roth IRA for 2012 in this fund yesterday. I receive an annuity from my wife’s pension ($508.25 after S-0 withholding, state exempt) per month for life. This monthly amount covers monthly contributions of $458.33 to that Roth IRA from here on out (until max contribution amount exceeds it). I deposited for Jan & Feb today. Therefore, balance right now is $5916.67.
I also have a municipal pension. I am currently 13.6 years in, fully vested. Thankfully, the State of Illinois politicians cannot touch this fund like the other ones in the state. Cannot provide any frther info on the pension right now because they locked me out for too many wrong passwords and I have to wait for them to SNAIL MAIL me a reset code.
New annual Contributions
$17,500 in 457 (no match)
$5,500 Roth IRA
$75,000 I do not know what to do with. Currently sitting in a life insurance “draft account” earning 0.50%
1. I’m not sure what to do when it comes to picking funds in the 457.
2. Is target 2035 in Vanguard good for my Roth?
3. I’m REALLY not sure what to do with the $75,000.
Ideally, I would like to be able to keep my job at least 11.5 more years. 25 years in should be a big help in my pension amount. This would put me at 53 years old. If possible, I’d like to retire sooner rather than later (ie late 50s/early 60s vs 70+) and do something I really like to do for money (part-time or otherwise) vs. tolerating my job like I do now.
I would consider myself conservative to moderate. I don't have the stomach for aggressive. My wife made $60K+ a year and that's gone for good.
Thanks for any help or suggestions you have… I’m in a position I’ve never been in (at a great cost) and don’t want to screw it up.