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im28, what to invest in for 2014
Old 04-14-2014, 12:29 PM   #1
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im28, what to invest in for 2014

So today is my birthday and I'm 28 years old. I have contributed the max amount in my ROTH IRA for the past 3 years and its all S&P 500. I'm wondering what I may want to look into for 2014. Should I stick with the S&P 500 for a few more years or maybe start looking into other investments?

I only make $38000 a year for work.
I have $10000 for security funds.
I have low cost of living expenses.
I have a KPERS account for work retirement but it isn't much. I guess its like a 401k but the company doesn't match anything.
I also have health insurance and dental.

Any advice what I should be focusing on?
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Old 04-14-2014, 12:37 PM   #2
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Do you have disability insurance? That is very important.

After that, I would suggest investing in a few good books on investing before you deploy any more cash. Dig around the forum, there is a sticky with a reading list.
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Old 04-14-2014, 12:41 PM   #3
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Originally Posted by Tykimeister View Post
So today is my birthday and I'm 28 years old. I have contributed the max amount in my ROTH IRA for the past 3 years and its all S&P 500. I'm wondering what I may want to look into for 2014. Should I stick with the S&P 500 for a few more years or maybe start looking into other investments?
Happy Birthday.

You might try plastics? Worked for Dustin Hoffman. He got Ann, Ali, and a stellar stage and screen career.

I have to think it was the early, it tepid, interest in plastics that set him onto the right path. Of course, he will never make ER.

Ha
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Old 04-14-2014, 12:57 PM   #4
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Roth IRA is probably good for your age and income, assuming that means one of the lower tax brackets.

Diversify from S&P 500 into the total U.S. market (add small and mid caps). Vanguard has VEXMX for example, which is intended as an add-on to the S&P. Or switch to a total market fund or ETF instead of the S&P 500. After that, look at adding an international fund.

Edit: A target retirement fund also does this for you in one fund.
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Old 04-14-2014, 01:34 PM   #5
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Consider investing in yourself. How much education do you have? Are there professional ceritifcations that could help to increase your income. A larger income would give you more money to save.
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Old 04-14-2014, 09:35 PM   #6
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A target date retirement fund could be a good choice also.
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Old 04-14-2014, 10:34 PM   #7
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Thanks for the info everyone.

I have a bachelors degree in criminal justice. Seemed like a good idea at the time but I think nursing or engineering would have been a better choice. I did recently got promoted at work but it wasn't a huge pay increase.

I have disability insurance at my work but nothing that I purchased independently.

If I satrt purchasing a targer tetirement fund for my age will I have to stick with that plan or can I change it again some time in the future?
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Old 04-15-2014, 10:55 AM   #8
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Happy (belated) Birthday!

I would find out more about the KPERS account. If it really is like a 401k in your low tax bracket you might not bother with it. Tax deferred savings (like a 401k) IMO only really makes sense if they offer a match or if your current marginal tax rate is higher than the marginal tax rate you expect to have in retirement and neither probably apply in your case. You'll have more flexibility continuing to do max Roth contributions and save in taxable accounts.

At 28, IMO you should be close to 100% stock. The S&P 500 covers US large cap stocks, but IMO it is better to cover the whole stock universe. A combination of 70% Vanguard Total Stock and 30% Vanguard International Total Stock would cover global equities reasonably.
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Old 04-15-2014, 08:09 PM   #9
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Thanks for the info everyone.

I have a bachelors degree in criminal justice. Seemed like a good idea at the time but I think nursing or engineering would have been a better choice. I did recently got promoted at work but it wasn't a huge pay increase.

I have disability insurance at my work but nothing that I purchased independently.

If I satrt purchasing a targer tetirement fund for my age will I have to stick with that plan or can I change it again some time in the future?
Target retirement funds are just like any other fund, you can buy or sell as you like. Their key features are diversification (including international and sometimes more esoteric stuff) and an increasing bond allocation as you age. You can purchase whatever date you wish to get the bond percentage you like, though it will change as you (actually the fund) ages.
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Old 04-15-2014, 08:25 PM   #10
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I have disability insurance at my work but nothing that I purchased independently.
Does this cover all disabilities or only job-related disability? That is, if you fall off a ladder while not at work and injure your back and can't walk, or can do so only with difficulty, or develop a heart condition, will this insurance cover that?

That said, if your job is perceived by insurers as hazardous, such as police work, if your work disability insurance covers only job-related injuries then a separate disability policy that covers non-job-related injuries would be less expensive than a general policy.
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