Advice for a beginner...

Discussion in '401k, IRA and Retirement' started by alexisfinch24, Jun 16, 2014.

  1. alexisfinch24

    alexisfinch24 Well-Known Member

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    I would really like advice from our veterans on this board as to advice for how I can invest for retirement. What is best as far as investing, IRA's, and, 401K's. Please any advice will be greatly appreciated. Thanks in advance. :)
     
  2. JR Ewing

    JR Ewing Super Moderator Staff Member

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    If you have a work plan, max it out - particularly if they do some matching. Diversify your portfolio - not too much company stock.

    Open up an IRA (or Roth if you're eligible) and max it out every year also. Even if you don't have a work plan, if you put $5k into an IRA and add $400 a month to it for 30 years, you'll end up with approx $955k (minus fees) if you average the 10% the markets have averaged over the last 50 years. Once you're over 50 you can put in a little more each year, and the contribution limits for everyone tend to go up once in a while.

    Your own unique goals, risk tolerances, time frames, liquidity needs, etc are a key factor. If you end up with a million at retirement, you can basically expect to pull out $40k or so a year more or less indefinitely and maintain your principal. If you're pulling out more than 4-5%, you're likely to eat into your principal over time one way or another.

    If you max out a 401k / SEP and IRA, you should likely be a multi-millionaire easily after several decades if you started fairly young. If you wait until you're 50 to start investing for retirement, you'll have much less accumulation in those tax-advantaged accounts.
     
  3. alexisfinch24

    alexisfinch24 Well-Known Member

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    Thank you so much. That was awesome information and, it was explained so well. I never thought about it like that. I am actually starting a ROTH this year and, I am thirty years old. So, I may not make it to a multi-millionaire but, I can at least make it to at least a million maybe a little more, I hope.
     
  4. JR Ewing

    JR Ewing Super Moderator Staff Member

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    That's great. You'll probably have 7 figures socked away by the time you hit 60 if you max it out and invest wisely - the good thing about IRA / Roth / 401k, etc is that the contribution limits tend to go up every few years.

    http://www.irs.gov/uac/2013-Pension-Plan-Limitations
     
  5. alexisfinch24

    alexisfinch24 Well-Known Member

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    That would truly be awesome. Thanks again for all your advice JR. Its so nice to know I can come to this board and get great advice.
     
  6. Annabell

    Annabell Well-Known Member

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    I just wanted to say JR, thank you very much for taking the time to help other newer members such as myself and others obviously catch up to your strong knowledge! It's really a treat to hear you talk about these factors.
     
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  7. JR Ewing

    JR Ewing Super Moderator Staff Member

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    Thanks guys. Glad I can help.
     
  8. alexisfinch24

    alexisfinch24 Well-Known Member

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    Its awesome that you really could. You pretty much summed up the whole thread in one post. Which Is what I was looking for. Good credible information from someone who was experienced with the topic. Good job JR.
     
  9. wulfman

    wulfman Guest

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    ROTH IRA is good to have. you don't pay taxes up to a certain amount you deposit each year and you can invest it. also if you cash it out early you pay huge penalties so you are more tempted to let it grow until you are over 60 when all penalty restrictions are off the board.
     
  10. wulfman

    wulfman Guest

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    my fault didnt see JR's post . yea he pretty much nailed it for ya right there !
     
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