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Alright, I've been told that I should invest in some basic life insurance while I'm still young to "lock in my status as healthy." The reason being that if I don't get a policy now I would have to pay a lot more after a physical if my health deteriorated when I am older? What are my relatives talking about? So... if I get a physical for the policy now... my health will be locked in as eternally "good?"
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Jul 7, 2009 20:51
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Alright, I am an age 25 male (b. 6/85) looking to get into some long-term retirement savings. My employer puts the equivalent of 5% of my salary (this is given to me, not withdrawn from my salary) into a TIAA-CREF. There is the additional option of having direct deposit put into a Vanguard Roth IRA. Also, at age 30, the employer contribution rises to 10% for the TIAA-CREF (again, I pay nothing for this contribution). I have been working here for 2.5 years. My annual salary is now $24,000 a year and my fiancée makes about $13,000 annually. Essentially, I was wondering if I should get a Roth IRA at this point or contribute everything into the TIAA-CREF since I'm already getting $1240 into it annually? I expect to be able to put in at least $150-$300 a month. My only major expense in the near future is $18,000 in grad school tuition. I was "advised" by someone to get a tuition loan and then "write it off" on my taxes. The degree is an MLS and I am a library staff worker. How much am I looking to lose via interest on the loan? This would certainly affect how much money I have for investments. However, I do not know if I will be with this employer for life, although I hope to be here permanently. quote:For staff members, participation in the plan begins on the first of the month following the first work day for staff members over the age of 35. For those under age 35, participation begins the first of the month following the employee's 35th birthday or after reaching 21 and completing two years of service, whichever is earlier. quote:The VRSP is a valuable savings tool because the money contributed to the plan from the individual’s paycheck, as well as the interest or dividends earned, is tax-deferred. No income tax is paid until the funds are withdrawn during retirement. Insane Totoro fucked around with this message at 16:00 on Oct 6, 2010 |
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Oct 6, 2010 15:54
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flowinprose posted:With your income being that low currently, I think you'd be better served by contributing to a Roth IRA than the employer plan. The reason being is that your income is most likely lower currently than it will be later. This is assuming you already have enough emergency savings and other personal finance issues out of the way first. I see your point on the Roth. Even if I'm essentially getting a huge return on the employer investment already?
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Oct 7, 2010 14:40
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Fuschia tude posted:Is the 5% employer investment guaranteed, even if you put $0 additional money into the account? Yes, it is guaranteed until age 30. And then at age 30, there is a guaranteed 10% employer investment. The actual dollar amount obviously increases with salary increases. This is separate from anything that I might put in myself. The employer contribution is completely not dependent on me putting in any money. It's not "matching funds" but literally a "giveaway." I currently make $24,800 before taxes.
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Oct 7, 2010 15:50
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My wife is currently working as a long-term substitute teacher and has access to a 403b with employer match. There is no guarantee that she will be able to stay with this job, but she expects to be able to stay in public education for the rest of her life. Should she begin contributions to this account? Or should we just get a Roth IRA? We are currently both 26 years old. Basically, can I do both the 403b and the Roth, and then if she can't get a permanent position, roll the 403b into the existing Roth? Insane Totoro fucked around with this message at 17:05 on Oct 26, 2011 |
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Oct 26, 2011 17:02
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Okay here's the deal. She is currently a long-term substitute. However if she was not asked to come back, she would just return to substitute teaching. The point of contention is whether or not a daily substitute teacher "counts" for a 403b's vesting period. Furthermore, can you "carry" the same 403b across school districts? Insane Totoro fucked around with this message at 17:53 on Oct 26, 2011 |
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Oct 26, 2011 17:49
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I guess the problem might be that she substitutes across several school districts. The trouble is that their HR department is incredibly unhelpful.
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Oct 26, 2011 18:28
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Oh well, looks like my wife doesn't get a 403b match from her employer at all! HR stupidity strikes again! Just going to get a Vanguard account through my work and direct deposit $415 per month into a Roth IRA.
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Oct 28, 2011 17:02
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Okay here's what my wife told me from her HR department at the school district. Actually now that they gave everything to me in writing, I'm no longer sure what my wife actually gets if she contributes to the state teacher retirement plan. It's called Pissers: http://www.psers.state.pa.us/active/moneyinvested.htm From what I can gather of this, it's a defined benefit pension program? Please tell me if I am reading this right: http://www.qcsd.org/21301012615234450/lib/21301012615234450/Pension_Crisis_PSERS_FAQs.pdf So my wife contributes the max amount, which is 7.5% of her paycheck ($50,000, probably more in the future) annually. And then she gets something like $45,000/year after she retires (theoretically) in 40 years? That is insane.  Should I fully fund this and also get a Roth at the same time? If so, why? I am getting a feeling that these defined benefit pension plans are much more volatile since they are based not on your individual investments but the group investment?
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Oct 28, 2011 18:36
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Okay, I think I understand how that math works out. It's funded by both employee and employer and if the investments hold out, it's pretty self-sufficient. But my question now is, isn't a Roth IRA a much more profitable investment? Or is my math weird? I'm 26 right now and if I wanted to retire at say, age 65... Ninja edit, some quick math: Roth IRA ($5000 annual investment) at 8% interest = $1,475,998.85 PSERS ($4000-ish annual investment) = $45,000-ish x 30 years of retirement for a total benefit of $1,350,000. Adjust for inflation. Wait, that's not actually much of a difference. Funding both now seems like a pretty good idea. I read that you need about at least $2.5 million if I intend to retire in 45 years. Apparently also my work has been socking 5% of my ($25k-ish) paycheck as well into a TIAA-CREF account for about $1045/year as of this year. Not too bad either.
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Oct 28, 2011 19:40
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So you actually recommend two individual Roth accounts? If my employer is already funding $1000 into a TIAA-CREF account for me, should I just match their amount? They are putting in $1000 regardless of whatever action I take.
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Oct 28, 2011 20:34
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TraderStav posted:Absolutely, Roths are amazing. Forgive my endless questions. Then wouldn't it just be more prudent to do two Roths rather than a pension plan and a single Roth? Sounds more flexible.... Although I guess the pension plan is kind of mandatory....
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Oct 28, 2011 20:58
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