Mid 30s couple looking for some direction

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ParanoidAndroid
Posts: 1
Joined: Tue Jun 12, 2018 11:41 am

Mid 30s couple looking for some direction

Post by ParanoidAndroid » Tue Jun 12, 2018 1:13 pm

I've been slacking as far as investing and have missed out on a lot. I feel bad for not taking a better understanding of everything, and a more active role, but I want to get better, so I am starting here. As you can see there's nothing really exciting going on. My ROTH is just in a money market fund and there's no rhyme or reason for any of the investments elsewhere. I was looking at opening another ROTH in my wife's name. The only reason for that is that we use her bonuses to help max out the current ROTH and would be doing the same for the other. I also have the option for RSA-1 (Retirement Systems of Alabama) investments. Any direction on anything is appreciated.

My Info:
Age: 36 (9 years into job)
Annual Income: $85,000

Pension:
• 5% of income goes to pension.
• Payout is 50% of salary after 25 years, 60% after 30 years, goes higher.

ROTH IRA (Vanguard):
• Contribute maximum $5500 yearly
• Current value of $25,000
• Investments include:
o 100% in Money Market Fund

457b (Nationwide through work)
• Contribute $180 per check pre-tax
• Current value of $13,300
• Investments:
o 50% Fidelity Puritan Fund ($9,700)
o 50% Nationwide Destination 2040 Fund – Institutional Service Class ($3,600)

Wife Info:
Age: 34 (9 years into job)
Annual Income: $65,000 + $6k-$10k in bonuses

Pension:
• Contribute about $75 per check
• Not sure on eventual payout, but estimating: Retirement date of 2043, Beneficiary Type of Spouse, and Annual Base Pay Increase of 2% gives
lump sum of about $330,000. 5-Year Certain & Continuous Annuity through 20-year Certain & Continuous Annuity range from $1,653 - $2,029
per month.

401k (Mass Mutual through Work):
• Contribute 7% of salary pre-tax
• Work matches first 3% @ 100% and the next 2% @ 50%
• Current Value of $50,000
• Investments: 100% T.Rowe Price Ret 2045 Trust-A


Other:

•College Savings
o College Counts 529 through Alabama for daughter college (age 3)
o Current value of $4,300
o Contribute $25 per check, so every Friday
o Investments include:
 100% Moderate Age Based 03--05
o Also have separate savings account setup by family members with value of $5,000

•Savings account
o $15,000 in Regions Savings

•Current Home Info
o Purchased 1st home in 2009 for $206,000
o Currently have 10 years left ($130,000) on 15 year note. Refinanced at 2.875% in 2013.
o Will be moving in 1-2 years

PFInterest
Posts: 1374
Joined: Sun Jan 08, 2017 12:25 pm

Re: Mid 30s couple looking for some direction

Post by PFInterest » Tue Jun 12, 2018 2:16 pm

List your 401k funds otherwise how would we pick?

User avatar
Pajamas
Posts: 5369
Joined: Sun Jun 03, 2012 6:32 pm

Re: Mid 30s couple looking for some direction

Post by Pajamas » Tue Jun 12, 2018 2:17 pm

Welcome to Bogleheads and there is nothing wrong with boring investments!

The money sitting in the Roth in a money market fund does seem like a wasted opportunity. You could invest in individual funds or a target date fund.

Best thing to do would be to review the basics:

https://www.bogleheads.org/wiki/Getting_started

with special attention to some of the links from that page including the Investing and Retirement planning start-up kits. You want to look at your investments as a whole for efficient placement in various accounts.

ExitStageLeft
Posts: 321
Joined: Sat Jan 20, 2018 4:02 pm

Re: Mid 30s couple looking for some direction

Post by ExitStageLeft » Tue Jun 12, 2018 2:59 pm

Welcome to the forum! You're well positioned to focus on a retirement saving plan. There is a LOT of information contained in the Boglehead Wiki site, so you should start your learning there.

You may feel like you're behind the curve on saving for your future, but fear not. You've started the ball rolling with the retirement savings and are well positioned to focus on that over the next few years. Now is a good time to develop an Investment Policy Statement and retirement savings plan. Then just keep doing what you've already been doing: living below your means, investing the surplus, and avoiding debt.

The Boglehead Investing Philosophy is a great write-up on how you can invest your annual surplus and have it working for you. One of the key points in that philosophy is keeping your costs low. That turns out being the best indicator of a fund's performance, so you want to make sure you're invested in funds with reasonable expense ratios. For example, the Nationwide 2040 Destination Fund has an expense ratio of 0.64%. There may be other funds available in your 457b that have lower espenses and might be a better choice. If you were fortunate enough to have a Vanguard 2040 target fund available (expense ratio 0.15%), the difference in costs over ten years would be telling: see Portfolio Visualizer. That's why forum membrs are curious about what plans are available to you and your wife. We'd like to see you settling on an overall asset allocation appropriate to your risk tolerance, and selecting the best indexed funds available to you.

FOGU
Posts: 92
Joined: Tue Apr 24, 2018 9:41 pm

Re: Mid 30s couple looking for some direction

Post by FOGU » Tue Jun 12, 2018 3:09 pm

What would you say your savings rate is?

Not including deductions for pension contributions, what percentage of your gross pay are you saving for retirement?
~ Don't just do something. Sit there. ~

tesuzuki2002
Posts: 330
Joined: Fri Dec 11, 2015 12:40 pm

Re: Mid 30s couple looking for some direction

Post by tesuzuki2002 » Tue Jun 12, 2018 3:31 pm

ParanoidAndroid wrote:
Tue Jun 12, 2018 1:13 pm
I've been slacking as far as investing and have missed out on a lot. I feel bad for not taking a better understanding of everything, and a more active role, but I want to get better, so I am starting here. As you can see there's nothing really exciting going on. My ROTH is just in a money market fund and there's no rhyme or reason for any of the investments elsewhere. I was looking at opening another ROTH in my wife's name. The only reason for that is that we use her bonuses to help max out the current ROTH and would be doing the same for the other. I also have the option for RSA-1 (Retirement Systems of Alabama) investments. Any direction on anything is appreciated.

My Info:
Age: 36 (9 years into job)
Annual Income: $85,000

Pension:
• 5% of income goes to pension.
• Payout is 50% of salary after 25 years, 60% after 30 years, goes higher.

ROTH IRA (Vanguard):
• Contribute maximum $5500 yearly
• Current value of $25,000
• Investments include:
o 100% in Money Market Fund

457b (Nationwide through work)
• Contribute $180 per check pre-tax
• Current value of $13,300
• Investments:
o 50% Fidelity Puritan Fund ($9,700)
o 50% Nationwide Destination 2040 Fund – Institutional Service Class ($3,600)

Wife Info:
Age: 34 (9 years into job)
Annual Income: $65,000 + $6k-$10k in bonuses

Pension:
• Contribute about $75 per check
• Not sure on eventual payout, but estimating: Retirement date of 2043, Beneficiary Type of Spouse, and Annual Base Pay Increase of 2% gives
lump sum of about $330,000. 5-Year Certain & Continuous Annuity through 20-year Certain & Continuous Annuity range from $1,653 - $2,029
per month.

401k (Mass Mutual through Work):
• Contribute 7% of salary pre-tax
• Work matches first 3% @ 100% and the next 2% @ 50%
• Current Value of $50,000
• Investments: 100% T.Rowe Price Ret 2045 Trust-A


Other:

•College Savings
o College Counts 529 through Alabama for daughter college (age 3)
o Current value of $4,300
o Contribute $25 per check, so every Friday
o Investments include:
 100% Moderate Age Based 03--05
o Also have separate savings account setup by family members with value of $5,000

•Savings account
o $15,000 in Regions Savings

•Current Home Info
o Purchased 1st home in 2009 for $206,000
o Currently have 10 years left ($130,000) on 15 year note. Refinanced at 2.875% in 2013.
o Will be moving in 1-2 years

you have the income MAX everything and pay of the loan balances!!!!

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