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Old 10-16-2014, 03:04 PM   #1
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27 years old buying Pension Service Credits

So I just finished paying off the 5 years of pension service credit cited in the above forum post.

I'm currently 28 years old with a net worth of $78,000 with $74,000 in my retirement accounts roth ira, 401k, pension. I do not own a home and have a 99 Jeep Wrangler that I have been driving for 11 years.

I'm currently doing the 4% company match and 10% to my Roth IRA.

Any advice on what the next step should be? I make $2,581.00 per month take home and housing is at an all time high where I live.

Is there any other sort of retirement or long term investment I should look into other than just raising the amount I currently contribute? Annuity?
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Old 10-16-2014, 03:14 PM   #2
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I'm a fan of high deductible health plans so you can contribute to an hsa (especially when you're young and relatively healthy). The tax advantages are really good



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Old 10-16-2014, 04:33 PM   #3
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Congratulations on being proactive with your retirement planning - you're young enough to have the power of compounding greatly enhance your retirement/investment savings. Most people your age don't give this as much consideration as you have. You have a whole lot of living ahead of you - keep doing the 401k/Roth thing, but don't forget to enjoy living life as well.
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Old 10-16-2014, 08:05 PM   #4
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Thanks for the advice! I just filled out the paperwork for our HSA. They provide $728.88 per year toward a $3,000.00 per year deductible with a max contribution employer + employee of $3,350.00 . It just so happens that this is our time to sign up for the year so I'm going to do it and max it out this year then enjoy banking it. I have worked for the state full time for 2.5 years and not used my medical insurance. I feel I will come out ahead in the long run and I like being able to declare it on taxes. I'm not sure but I think I may even be able to use the money in my HSA account for my dental deductibles.

I'm trying to live more in the moment. That is why I have now ratcheted down to the balanced money formula. 4% pre tax into my 401k for the match, direct deposit to checking 50% needs, direct deposit to checking 30% wants, direct deposit to savings account 20% savings with a monthly 10% withdraw from savings to my Roth IRA. My roth and 401k are very low expense broad index funds.

This gives me 10% to Emergency fund and 10% post tax + 4% pre tax to retirement. I feel that the biggest thing from now on is to stay stay healthy, out of debt, and build my emergency fund to 8 months.
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Old 10-17-2014, 09:06 AM   #5
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Any advice on what the next step should be? I make $2,581.00 per month take home and housing is at an all time high where I live.
This is where to start:

Bogleheads® investing start-up kit - Bogleheads
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Old 10-17-2014, 09:40 AM   #6
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Even better when your employer provides a match into the HSA. Since it's through your employer you may not realize at this point that you double save. You save on taxes. You also save on Social Security payments. Not many deductions do that.


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Old 10-17-2014, 09:50 AM   #7
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And yes, you can use your HSA to pay any dental bills, prescription, eyeglass costs, hearing aids etc.

Basically it can be used for anything medically related (except over-the-counter drugs). It's a bit like a super IRA: the ability to roll a balance year-to-year with tax-free growth, invest in the stock market (depending on your HSA custodian bank, but you can transfer funds to a custodian that allows this once your balance rises) and the ability to use for any purpose at regular tax rates (hopefully reduced retired tax rates) once you reach 65.

And on top of that your company is giving you a 4.5 % match = unbeatable retirement investment
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