Message Font: Serif | Sans-Serif
 
No. of Recommendations: 1
I believe I have a general idea for finances but I just want to double check my order of operations. I am 20 years old getting married in about a year and a half and I just want to see what I should be doing in order to save for retirement now. Here is the order that I believe I should be doing this:

1.) Matching employer contributions (I am currently doing this)
2.) Paying off high-interest debt (Now, I will be buying a used car soon, would this fit into this category?)
3.) Save for a down-payment on a home (Any suggestions as to how much I should be saving %-wise)
4.) Max out Roth IRA (Now, I don't have any student loan debt, but my fiance does, should I still max this out for the two of us [if I can afford to] before going above and beyond monthly payments on student loans for her?)
5.) Invest more in the 401(k) if I can afford it past point 4
6.) If I can still afford it, move into taxable accounts past point 5

I just want to be sure I am on the right track. I won't start work at my employer until this summer and permanently until the following summer, but I want to have a good idea about what I am doing. Thanks everyone.

Dan

Print the post Back To Top
No. of Recommendations: 2
Not sure on all your details and priorities, but this is how I would order them.

1.) Matching employer 401k contributions.
2.) Build up emergency fund.
3.) Max out Roth IRA
4.) Save for a down-payment on a home.
5.) Invest more in the 401(k) if I can afford it past point 4
6.) Paying off used car. (Assuming 7% loan)
7.) If I can still afford it, move into taxable accounts past point 5

--
whyohwhyoh
Print the post Back To Top
No. of Recommendations: 0
There are caveats for all of these:

1.) Matching employer contributions (I am currently doing this)

Meaning, contribute to the 401(k) up to the point where your employer stops kicking in free money.

However, if the options in your plan are bad ones (high fees and/or poor performance) then it may be better to put aside the free money and invest elsewhere.

2.) Paying off high-interest debt (Now, I will be buying a used car soon, would this fit into this category?)

Avoiding incurring high-interest debt is just as good as paying it off. So if you know you're going to be buying a car, save up money so you don't have to take out a loan.

3.) Save for a down-payment on a home

How much do you want to spend on a home? What down payment percentage do you want to put down? (You avoid a lot of hassle and expense if you put down more than 20%) When do you want to buy? Divide the numbers out and you'll see how much you have to save to reach that target.

However before saving money in a taxable account I would first start a Roth IRA and place the money in a safe investment (e.g. money market fund) since if you need to you can withdraw your contributions from the Roth IRA at any time and use them for any purpose. (And if you come into money within 60 days you can replace your withdrawal.)

Print the post Back To Top
No. of Recommendations: 1
Hello, and CONGRATULATIONS on your upcoming wedding.

Congratulations, too, on thinking about the money issues at a young age - you and your fiance have a wonderful opportunity to set yourselves up for a solid future.

A bit of unsolicited advice - if you haven't already, you and your finace might want to have "the money talk" (which generally takes several talks, a couple of tears, and at least several months) to make sure you are on the same page with regard to money/spending/goals/etc.

Houses, careers, children, insurance, retirement - you don't have to have firm decisions on everything, but at least being aware that money disagreements is one serious killer of marriage can help you avoid the pitfalls.

Good luck and best wishes!

-a-
Print the post Back To Top
No. of Recommendations: 2
<<I believe I have a general idea for finances but I just want to double check my order of operations. I am 20 years old getting married in about a year and a half and I just want to see what I should be doing in order to save for retirement now.>>


The best thing I can suggest is not to get married. Ever. The risk of social and financial disaster makes this a very risky behavior, for men in particular.



Seattle Pioneer

Print the post Back To Top
No. of Recommendations: 14
The best thing I can suggest is not to get married. Ever. The risk of social and financial disaster makes this a very risky behavior, for men in particular.

Oh for cryin' out loud! I thought this died over on the LBYM board. Give it a rest already. I'm sorry if something terrible happened to you in this arena, but why continually try to rob others of the joys marriage can bring? I don't go out and preach that everyone must be married (regardless of my beliefs). Why do others need to preach against it, though?

Ryan
Print the post Back To Top
No. of Recommendations: 0
Greetings Ryan,

Don't you know that nothing dies in cyberspace? Part of the beauty of the Internet is how people can spew the same thing over and over again....

Regards,
JB

(Not married, hopes to be, still looking for Ms. Close-enough-to-Right, and attempting to add a little humour here)
Print the post Back To Top
No. of Recommendations: 0
Don't you know that nothing dies in cyberspace?

JB,

I know. I've got a lot to learn. I appreciate the humor, and try to add some myself from time to time.

Ryan
Print the post Back To Top
No. of Recommendations: 0
Marriage is a HUGE risk, especially in this day and age.

There are also very good returns if you are successful.

Fortunately there are ways of mitigating the information risk without increasing the price risk.

We're offtopic -- should we move this to "Sex & Relationships"?
Print the post Back To Top
No. of Recommendations: 1
>>>Marriage is a HUGE risk, especially in this day and age.<<<

Start slow. Get a puppy.

Doug
Print the post Back To Top
No. of Recommendations: 3
Marriage is a HUGE risk, especially in this day and age.

There are also very good returns if you are successful.


Diversification? :-)
Print the post Back To Top
No. of Recommendations: 1
Other things I would include on your list:

- making sure you're putting aside enough money each month to pay for irregular expenses (annual car insurance, dental expenses, Christmas presents, etc.)
- disability insurance
- saving for medium term goals (putting aside the money for the wedding)

I would max out your Roth IRAs before you put aside money for the down payment on your home; you can withdraw the contributions without penalty. Putting money into your retirement funds is something you can't make up for later.

(Now, I will be buying a used car soon, would this fit into this category?)
I would aim to save up the money for the used car before you buy it.

) Save for a down-payment on a home (Any suggestions as to how much I should be saving %-wise)
Figure out what your monthly payment (include taxes & insurance) will be and aim to save that per month. Plus some more for maintenance.

I would add the following things to preparing for your retirement:
- Aim for a low cost of living. If you put all of your raises into savings and keep your expenses low this will make saving for retirement so much easier as your earnings increase.

- Pick hobbies that let you save or earn money, not hobbies that cost you money. Hobbies like: fixing things yourselves, making the presents you give others, comparison shopping, penny pinching shopping, preparing food from scratch, skilled investing, rebating, etc.

- Take care of your health. Go to the dentist twice a year and floss daily. Maintain a healthy weight, eat an abundance of fruits and vegetables, and exercise vigorously for at least 30 minutes three times a week. Get a physical every two or three years.

- Megan
Print the post Back To Top