I'm about to turn 50 and freaked out for a moment. I'm thinking, I'm not doing this right and I need to fix it to see if I can still save myself.
Emergency funds: Just started, so there's basically nothing there. Ok, $200. I'll be depositing $200 every month until I have somewhere close to $20,000 saved in a money market account.
Debt: About $2500 in credit card debt. I'm paying $200/month until paid. Not sure of the interest rate. Assume it's high. I also own 1/3 of a house. My share of the debt is about $220,000 with the interest hovering around 3%.
Tax Filing Status: Single.
Tax Rate: 25% Federal, 9.3% State
State of Residence: California
Age: 49 (50 in September)
Desired Asset allocation: 100% stocks (that's what I have right now)
Desired International allocation: whatever, shoot. Should I have international investments?
I will receive a pension when I retire. By the time I retire, I expect to receive 75% of my highest paid 3 years.
Other than that pension, my job offers a 457(b) plan. It doesn't have a lot of options, but there are some good ones I hope. Regardless, it is what it is. This is what I have to work with. I've been maxing my plan out for years and there is no company match. Beginning this year, I am contributing $24,000/yr to this plan.
As of today, I have $461,114.99 saved, broken down as follows:
FCNTX (0.68%) = $91,803.31
VFTNX (0.12%) = $159,286.76
MSUSX (0.98%) = $210,024.92
The other funds available in my plan are:
- A bunch of targeted funds and 3 other investments which are extremely low risk but, as you may have guessed, with extremely low returns. Basically, savings accounts.
- LSV Conservative Value Equity Fund (LSVVX) (0.35%)
- Vanguard Institutional Index (VIIIX) (0.02%)
- Large Cap Growth Equity Portfolio (“fund of funds”) (PRUFX)+(VIGIX) (Combined ER: 0.30%)
- Fidelity Low-Priced Stock K (FLPKX) (0.78%)
- Vanguard Small Cap Value Index I (VSGIX) (0.06%)
- Small Cap Core Equity Portfolio (“fund of funds”) (VSGIX)+(VSIIX) (Combined ER: 0.07%)
- Vanguard Small Cap Growth Index I (VSGIX) (0.06%)
- American Funds Europacific Growth R6 (RERGX) (0.50%)
I didn't know what else to call this. Let me explain why I set this up. I live in San Francisco. Houses are very expensive here. The median price of a home here (~2BD/1BA, $700,000) would buy you a mansion somewhere else. That said, I want to live here. This is where I went to school, college, this is where I work ... you get the idea. So, early on I decided that if I was to buy a house here, I wasn't going to buy it by saving money (i.e., putting money in a savings account), my best bet would be to invest money. So, I opened an account with Capital One ("Sharebuilder" when I opened it) and I started contributing about $200 every month.
As of today, I have $147,328.87 saved, broken down as follows:
Active stocks (i.e., I'm still buying these on a monthly basis, $200/month total--NOT PER STOCK!!)
- AAPL = $84,319.42
- AFL = $16,590.18
- PAYX = $20,379.92
- WFC = $19,694.01
Passive stocks (i.e., I am no longer buying these on a monthly basis, but they keep earning dividends which are reinvested in the same stock)
- CSCO = $2,968.04
- WBA = $3,475.90
The reason for my freak out? I just read some articles about people younger than me having $1,000,000 or more in retirement accounts and my realizing that I'm nowhere near close to that number.
- Basically I just want to know if my financial situation is fine or if there is anything I could do to improve it. I just want to know the general health of my finances.
- How much money does someone my age should have in his retirement account?
- After all this, I still have $200/month left which I am thinking of putting into a money market account.
- In general, is there anything you would recommend I do based on what I have now and what I may be missing?
(Ok, I don't think I missed anything, did I? If I did, let me know and I'll do my best to get that, whatever it is , for you.)