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|Subject: Re: Please Help me Optimize!||Date: 12/11/2001 10:28 PM|
|Author: PlanningMoose||Number: 32805 of 80193|
Thanks to those that have already answered my questions! I greatly appreciate it....
I'll talk about your recommendations first, because they are probably the most important as they deal, not with my plan, but with my planning process.
I agree that I the interests of my girlfriend absolutely need to be incorporated into my plans! We've discussed finances at a high level in the past and she too has developed thoughts on her future, but we need to work on an integrated plan! We've talked about my future educational plans and it would make sense that we would be thinking about children immediately after, not during, graduate school - dealing with newborns and finance theory at the same time probably wouldn't make anyone happy.
I appreciate that thought and I'll make that an absolute priority! Tomorrow, we break out the calculator!
I didn't think it was possible to start an educational IRA before a child's birth, but what about a 529 College Savings account? It's my understanding that those funds can be used to pay the college expenses of any designiated beneficiary.... Anything to shield additional funds from taxation....
The seperate accounts I currently have, and my risk budgeting within the accounts, are a function of the tax shield limitations. If I could, I'd love to have 100% of my assets in my Roth IRA, but that isn't possible. I figured as long as the assets are in place, I should try to maximize return in the account with no capital gains tax and work on diversification (with returns in mind) in the other accounts.
Regarding the "ring fund" - hadn't thought of that. Very good point.
The car payment needs to go! I need the credit history, so immediately after my Roth contribution, I'll aggressively pay this down to a $200 balance. I'll let that payment ride until maturity and essentially pay $50 in total interest cost to add 100 points on my credit score. MAYBE I could get a 13% return on my investments, but hey, it's not often that you get that kind of return with no risk (unless it's T-bills in the 1970's).
Insurance: I'll shop around. Guess it couldn't hurt.
Index funds: if I could hold them in my 401K, I would. Is it possible to rollover funds into a traditional IRA even if you are still employed at the company funding the plan? If so, I might do that to avoid the 1% average management fee. I could own exchange traded funds, index funds or individual equities in a traditional IRA....
Again, thanks to all for the advice!!! Any additional input is greatly appreciated!
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