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Subject:  My retirement plan. Any advice welcome. Date:  9/22/2008  6:06 PM
Author:  USMCkumate Number:  63927 of 91104

I am looking for any advice about my retirement plan. I am very new to investing and I've used my bank for all my investing questions so far.

Some Info about me that will hopefully help you understand my situation better.

I am 29 years old..this month. I have been in the Marines for about 12 years. I have 8 years till I can retire but I will probably do an extra year so total of 9 years till retirement.

I do not donate to the TSP. (military version of the 401k) I am currently in Iraq so my paycheck is tax free for awhile and due to that I will be in the low income tax zone this coming up year. Expecting a return of 7 grand ish. I currenlty have around 20 grand in savings and 10 grand in the Savings deposit program here in Iraq. When I return it will be near 12 grand when im done. So around 32 grand in total when I return.

I am Married with a 3 year old boy and my credit score is around 660 ish (missed some payments when I was young). I have no debt. Only bill is rent and cable. Around 1400 in total a month. I clear about 5600 a month. My wife is in college working on her masters. She has no income and no credit..if not closer to bad credit. (Trying to fix that)


My plan currently to retire in 9 years. I will get that income. My guess is it will be around 3 grand a month+ when I retire. I retire at the age of 37 from the Military. I am in Iraq till the first of next year and soon as I get back I am going to buy a house. Heres why. I currently get 2000 dollars a month from the military for housing allowance. I am currently giving 1300 of it to someone else via rent. I want to buy a house around 200,000 ish and devote that allowance to my own morgage. I plan on trying to stay at my current duty station for atleast the next 5 years. Trying to finish all 9 years there..its highly possible. If thats the case I will be able to put around 18 to 22 grand a year free money to my mortgage. So when I retire the house I have will have a lot of it payed off. So I can sell it and move somewhere and buy my real house. The money I get from the house being sold will be a nice downpayment/investing money.

I also have a Roth IRA I just started thru USAA Bank, a military bank. I went with the 2040 plan which would put me at 59. I currently only have 1000 dollars in it at the moment. I also have gift to minor fund for my son for his college. I also have a Money Market savings accounts with the 15 grand in it.

My plan is make a Roth IRA (2040 plan) for my wife here in a few days and max out my wifes and mine to 10 grand between the two. When I get home I will take the 7 grand ish from taxes and put those into both our IRA's and put the remaining 4 grand into them so they are maxed at the begining of the year *it gets raised to 5500 next year*.

I plan to put max both Roth IRA's each year. I plan to put around a grand into my sons Gift fund for college each year. When my wife finishes her masters *2 years or less* We plan to max out her 401k plan or whatever her job offers. I plan to get a teaching job or something in that field when I retire from the Marines. I do not know if I plan to work there for another 20 years. I think I might only do it to have a salary for awhile to keep saving away. I do not wish to work past 50. My plan is to retire around 50. My wife around 60. Ive been in the Marines since 17 and need a break:).

So 2 Roth IRA's in the 2040 USAA mutual Fund. Marine Corps retirement. Free money into a house for the next 9 years then sell it (markets down..hoping to sell it for more then I bought it in 9 years). Possible wifes 401k and rest into a savings account/money market account. Also around 15 grand in total for my sons college fund. I also have the GIbill that I've never used that he will be able to use once he is of age. So his college is taken care of.

So my questions.

Is this a good plan? I've only come up with this basically this past week. I just felt the need to invest and sadly I never had the family background support when I was younger and it took me till I got married 4 years ago to releize I needed to invest. I didnt get out of debt completely till about 2 months ago.

Are Roth IRA in a life cycle fund the way to go? I do not know how to invest or even know how to start. I am inteligent and can read and learn if needed to if its going to make a huge difference by the time I'm 59 and pull them out. But USAA is voted the best customer service bank in America and I feel kinda secure letting them handle my mutual funds. Is there a better fund to put them in thou? 2050 or 2030? Or anything else. I havent started my wifes IRA yet. Plan on doing that in a few days.

Should I put the other 9 grand into the IRA when the Stock Market is at a low *its forcasted to go down for awhile* or should I not worry about any of that and just put it all in right away.

My plan for buying a house. Am I missing anything? I've never owned a house and im being told my Mortgage will be from 5.5 to 6.1 apr. I don't plan on using the VA loan till I buy my retirement house later in life to aviod the mortgage insurance at that time. I only need to put 5% percent down (around 10 grand) for USAA conventional house loan. Is now a good time to buy. Im assuming if I am getting 2 grand a month free that anytime would be really a good time for me to invest in a house:)

So thats my plan so far. Please pick it apart. I am willing and wanting to learn. My family is very important to me and I wish to set ourselves up for success in the future. Any advice would be really helpful.


Semper Fi
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