ruralavalon wrote: ↑Wed Aug 03, 2022 2:53 pmI think you can count on Social Security being around in some form.Hazlesac wrote: ↑Mon Aug 01, 2022 6:41 pm70,000 ytd (keep in mind I get paid weekly and I don't know what each week's paycheck will be since I rely on how many sales I will make and some weeks my paychecks are zero. Also, I project that when I am 55-70 my income will be under $50,000 due to the business I'm in and being older won't help)
Current contributions to Roth 401k
15% to Roth 401k (contributions made every week on Friday's)
-I would like to retire by 65-70. 70 to get full social security if it's still around.
Age 40 is not too late to make a big difference in your retirement, with a reasonable plan and a good rate of contributions. I did not start serious investing until my late 30s, and am now comfortably retired.
I suggest making traditional tax-deductible contributions to your 401k, rather than Roth contributions.
You said "70,000 ytd". Is your annual income going to be $70,000, or has it been $70,000 so far this year? If the former then it looks like you may currently be in the 22% federal tax bracket. Most people, without a pension or very large traditional tax-deferred accounts, will likely be in a lower tax bracket in retirement.
TFB, "The Case Against Roth 401(k): Still True After All These Years", link. "I think for most people the majority, if not 100% of the contribution should go to a Traditional 401(k)."
The savings from the tax deduction every year will enable you to make a higher level of contributions to your 401k.
Likewise I suggest stopping contributions to the 529 for now, and using that $800 to make higher contributions to your 401k account.
Establishing a high rate of contributions is the most important investing decision you can make, forum discussion. The maximum annual employee contribution to a 401k is $20.5k. Strive to get as close to that you as possible.
In my opinion making maximum contributions to your 401k should be your top priority.
Ruthlessly cut your spending. I suggest a budgeting app like YNAB or Mint.
My income was also very volatile, it varied enormously from month to month. I made a practice of contributing every month everything not needed for the next month's expenses.
I suggest continuing to use the target date fund (YourPath Passive 2055 AggressiveAllocation) in your employer's 401k plan. Using an allocation fund seems to insulate the investor against behavioral errors, and so produce higher investor returns. Morningstar, Mind the Gap, 2019.
If you don't use The target date fund (YourPath Passive 2055 Aggressive Allocation) then I suggest a combination of these funds:
1) Vanguard 500 Index SACG,;
2) VG Dev Markets Idx Admrl SACH; and
3) VG Dev Markets Idx Admrl SACH or Guarantee Stable Value.
What interest rate is currently being paid on the Guarantee Stable Value fund, and what rate if any is guaranteed?
What are the expense ratios charged for in your employer's plan those funds? In selecting funds to use strive a combination of both broad diversification (to reduce your risk) and low expense ratios (to increase your net returns).
I suggest a rollover into an IRA at a low cost fund provider like Vanguard, Fidelity or Schwab.
Finally I suggest buying a low cost term life insurance policy
Thanks for all of your advice and information you listed.
I’m going to stick with the target date fund. I chose 2055 to stay more aggressive but if I want to retire at 65 should I switch to 2050? I’m between wanting to hopefully retire at 65 but I also want full social security so makes me think I should retire at 70. But then comes am I going to be healthy and aggressive enough to be able to produce the way I am now in the business I’m in. So makes me nervous to not know how well I’ll be able to perform when this business it’s mostly 55-60 and under.
Also some people on here say to take the profit sharing money of $23,000 and send it right to my 401k. Do you mean you believe I should move it to an ira and just leave it there or you want me to start funding it too? If so that means I am funding my 401k and the ira right? And should it be a Roth IRA? I’ve read a lot about vanguard Rino advisor and they use low cost etfs in the Roth IRA roboadvisor. What’s your advice on that since I’m not an expert on what funds to pick. Unless I do what you and others say to use. Or even fidgety Robo too? That is if your saying to start funding the ira along with my 401k. And I’m assuming you will say to max out 401k and the ira? Will I still be okay if I moved it to my 401k if I felt I could only fund the 401k and not an ira too? What’s the advantages of me sending it to ira?
I’m using mint and it’s great but I still don’t understand how I’m spending so much money when I’m living with my parents due to a setback I had a few years ago with depression. So I’m literally starting everything back over and I feel the pressure on a lot of things right now. Like saving enough to my 401k which is working out good right now. But also I have items I need to save up for or I’ll never get out of the house so for now I’m trying to save what I believe rent payments would be each month if I rented and I have a goal to save at least a years worth before I actually move out. Then I have to save for me furniture. Then I have very personal goals as a single dad to be able to pay cash for a car when my son turns 18. Something that is just priority to me and I know not most people. Also a priority goal to save $40,000 by when he turns 18 so I have money I can give him whenever he needs it so he’s never without money or a bad situation and as he gets more mature and understandss money I would transfer the remaining to him.
Then I have a goal for myself to save 40-50 k to pay cash for a car so I don’t have payments anymore and keep the car as long as I can. Then I need other money liquid so I can pay bills etc. or what about saving for a house if I don’t want to rent anymore. How am I supposed to reach these goals and I’m putting money away to each goal every week that will make the goals I put out there at the intervals it should be filled by but I’m concerned if I can keep it going steady. And then we’ll all of these savings accounts I have are for very important things in my life and my sons. It’s the way i feel is the way to be the best dad I can be no matter who disagrees with my goals on what’s important and what’s not. I know retirement savings cannot go down bc im struggling with these other goals and I’ll never change that but these are real life things that I will need money for and it’s like if I don’t make it on these goals then I’ll never move out or ever have a chance of owning a house etc. so just your thoughts on cash flow and savings for other things other than retirement. Thank you!!!