New from Nashville

[JSadler]

Hi. My name's Jason. For my 30 birthday (a few years ago), a friend gave me a card that said "The good news about turning 30: Now that your student loans are paid off, you can now think about saving for retirement". I know it sounds crazy, but for some reason that has always stuck in the back of my mind. Well, this year I will officially be free of my student loans, so I guess, I need to heed the advice and start thinking about my retirement. I know nothing...so I figured joining this forum would be a great way to start. I'm looking forward to meeting you all and learning all I can.

[Sarah in SC]

Welcome, Jason! There is a lot to learn here, for sure!
Do you have a retirement plan through your workplace?
Are you eligible for contributions to a Roth IRA?
Do you know how your spending compares to your income (ie what's left over after the bills are paid?) and do you have other debts?
Congrats on the student loan payoff! That is a big milestone!

[obgyn65]

Hello Jason and welcome.

[JSadler]

Quote:

Originally Posted by Sarah in SC Welcome, Jason! There is a lot to learn here, for sure! Do you have a retirement plan through your workplace? Are you eligible for contributions to a Roth IRA? Do you know how your spending compares to your income (ie what's left over after the bills are paid?) and do you have other debts? Congrats on the student loan payoff! That is a big milestone!

I have a 401K through work...but to be honest I don't know much about it. At the risk of seeming like a complete knob, I have to admit I don't know what a Roth IRA is. Now that the student loans are gone, we have freed up about $1000 a month (we are thinking about putting that towards a car loan though). Overall, I would estimate that we spend about 85-90% of the income (including all bills, car loan & house). We'd love to build up some savings. or is it better to invest?

[Sarah in SC]

Hey, it is ok not to know now, but I'd recommend you spend some time reading some basic books about financial priorities and goal setting. My person favorite in this category is Dave Ramsey's Financial Peace. I don't care for his investing advice, but for a basic understanding of household finance, I think he's one of the best.

If you have an HR dept, they can tell you more about your 401k options. The Roth IRA is a retirement account funded by after-tax contributions.

I would prioritize your extra money to go first to an emergency fund, then all debt except the mortgage, then retirement planning.

[H2ODude]

I think at your age it's good to have a deep discussion with spouse about what your true goals are. Retire early? At 65? Enjoy all the niceties of cars, bigger house along the way? Most here have at some point decided to live way below our means to reach some early retirement goal. For me, I sort of fell into it at 30 when I had a job change that added about 35% of salary, no move or other changes. We made a commitment to put the majority of that into a 457, then limited to $7,500. It increased over the years, when I could I maxed once 55, and also maxed a 401k.

Through those years I followed it, learned a lot including getting burned on tech at the turn of the century. Come here, read books on it, get comfortable with what your goals are and stick to it. I think a Roth is excellent, started those several years ago for DW and me. This stuff isn't really all that difficult to understand, just need to develop a plan and stick to it. The hardest part is to separate the emotion from the dips and highs. That's where assessing your ability to withstand those frights (risk tolerance) is a good place to start in developing your asset allocation. Anyway, good luck and welcome!

[jclarksnakes]

You really do not need to be too sophisticated or knowledgeable in your early investing. First couple of very important things to know and live by.
1. The most important one by far is to live below your means and save the rest.
2. Avoid going into debt.
3. If you have an employer match for your 401 or 403 never let that money go unclaimed. Put the amount required in to get the match and even better put more than that into your 401 or 403.
4. In 401 or 403 plans they almost always have a choice of mutual funds. Pick a couple that are labled as growth or aggressive growth or growth and income. Put your money in them and leave it there. If the market goes down do not panic. It has gone down many times in the last century and has recovered every time. When the market is down is the time to buy stocks rather than to sell them.

[JSadler]

Wow...thanks for all the advise. I've actually read the Total Money Makeover by Dave Ramsey...that's what we followed to pay off our credit card and student loan debt, but I haven't read anything else by him. I'll have to head over to the library this weekend and see if I can find any books on basic finance. Now that we are out of debt (except the house and car) we plan to stay there. Guess the wife and I have some reading & discussing to do. I do appreciate all the advice!

[Sarah in SC]

Total Money Makeover is a good one, the book I mentioned is his first book, so you've gotten the gist of his program already. Good for you!
I think reading up on finance is a great next step. Here's a list of suggested titles from the forum:
http://www.early-retirement.org/foru...ist-46732.html