Retirement Planning - What next?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
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Petra
Posts: 16
Joined: Thu Feb 16, 2017 10:40 am

Retirement Planning - What next?

Post by Petra » Thu Oct 05, 2017 3:35 pm

Unfortunately I'm one of those people who started saving for retirement very late (in my 40s), due to a combination of:
- a lack of financial literacy (I grew up under the poverty line, thus was never exposed to IRAs or portfolios etc.)
- a high need child that took a whole lot of attention for what is often the most high earning decade in a person's life
Fortunately, I'm a super hard worker and am a pull myself up by the bootstrap kind of person so
- I created a job/company that allowed me to be home with my child that has met with some success
- I've taken advantage of the internet to learn, learn, learn. (Still a financial baby tho).
Supported largely by this site and the wonderful people here, over the course of 3 years I've:
- setup a passive portfolio
- restructured my Scorp so it is set up properly (separate accounts, paying payroll, proper insurance for my industry, etc.)
- setup a Solo 401k
- setup a 529
- setup an HSA as an investment vehicle
- paid off my mortgage
- put aside an emergency fund (in a online savings earning not so much but something)
- re-negotiated every. single. bill. (& cancelled many services) from car & homeowner's insurance to credit cards w/points, etc.
Because I started so late, I don't have a whole lot in my 401k and can only put so much in every year. Other than the above, what next? Anything where the assets are protected from any work or other liabilities (such as the 401k)? Also, I'm the breadwinner but 12 years younger than my spouse. I worry about our assets or savings being drained by my spouse's retirement & potential health issues and not being able to afford my own retirement & potential health issues and, more importantly, not being able to leave anything for my child... Is there a case for WL? Annuity? LTC? Is there anything an Scorp can write off? I'm not terribly interested in real estate though... TIA!

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FiveK
Posts: 2904
Joined: Sun Mar 16, 2014 2:43 pm

Re: Retirement Planning - What next?

Post by FiveK » Fri Oct 06, 2017 3:34 pm

Some reading that might be helpful:

mega backdoor roth solo 401k - Google Search

Investment Order and Prioritizing investments - Bogleheads.

And better late than never - good luck!

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Meg77
Posts: 2062
Joined: Fri May 22, 2009 1:09 pm
Location: Dallas, TX
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Re: Retirement Planning - What next?

Post by Meg77 » Fri Oct 06, 2017 3:52 pm

You don't say how old you are now, but it sounds like you're still fairly young. And in any event you are doing great! Don't worry too much about all the "what ifs" in the whole rest of your life. You've tackled one thing at a time and made a lot of progress in a short amount of time. There's no reason to think that won't continue.

That said, there's not quite enough info here to give too much specific advice. What's your spouse's income and projected retirement date? Do you keep finances separate? Does he have access to an employer retirement plan? How much do you have saved so far?

Generally though, here are some things to consider:

1. Depending on his age and health and your portfolio, your spouse may very well need long term care insurance. This will protect some of your assets if he ends up needing long term care. I wouldn't consider it for you until you're at least 65 though. A woman under that age has next to no chance of needing it, so no point paying for it yet.
2. If you're worried about liability protection, consider an umbrella liability insurance policy. In most cases though this isn't needed. Your homestead and retirement accounts should be protected, and given your situation you probably aren't a target for lawsuits anyway.
3. Contribute 15-20% of your income toward retirement if possible. Max out all retirement options including the HSA and then move to a taxable brokerage account.
4. Bump up savings to 6 months of expenses if not 12 months.
5. 529 comes in last place. You can cash flow some of college if you need to, but take care of yourself first. There are loans (and grants and scholarships) for school, and community college is not that expensive in the first place. If the money isn't there in time, that can be a great option to knock out some prerequisites.

Oh and I forgot the most important thing: NO THERE IS NO NEED TO CONSIDER WHOLE LIFE OR AN ANNUITY!!!!!!!!!! Stay away from these generally horrible products.
"An investment in knowledge pays the best interest." - Benjamin Franklin

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