Suggestions

[namesbond]

So I'm currently 28 years old working in IT for a State Agency. Here are my assets and liabilities.

$45,845.70 in a Roth IRA with Vanguard in Total Stock Market Admiral Fund
$7,508.12 in our 401k "Deferred Compensation Fund" which I receive a 4% match on so I'm meeting the match it is in S&P 500 and a Dividend Growth Fund both with low Expense Ratios
$29,049.24 in our Pension Fund I purchased 5 years of service so I have 10 years and 4 months currently the payout formula is ((years of service * 2%) * highest average salary over a 3 year period during your last 15 years)
-$12,450.21 Car loan at 2.7% I just bought it
$300.00 contributed to an HSA I just enrolled in
$2,800.00 in Series I Saving Bonds for my Emergency fund

I make $3581.00 before tax per month as a frame of reference. My only expenses are my car payment $207.00 per month which I contribute $300.00 per month, car insurance $77.00 per month, and my cell phone bill of $52.00.

Currently, my plan is to keep matching my employer 401K at 4%, max out Roth at $5,500 per year, gradually pay down my car loan, and build emergency fund.

The big reason I bought my 5 years of service was to diversify my retirement accounts. Is there anything else I should be doing? I'm not ready to buy real estate as I'm not married or settled down.

 

[2B]

Welcome to the forum.

I question buying the 5 years of service. You are so far from retirement so much can change before you would actually get your retirement. I realize what's done is done but I suggest you don't buy more.

You are doing the right things. I'd recommend geetting totally out of debt. Max out your savings plan. You might want to go Roth deferred comp if the option is available. I suggest a larger emergency fund. I like to suggest a year of living expenses in readily availble, liquid assets. It doesn't have to be in money markets but it needs to be outside of tax deferred accounts. You have listed most of this as what you're going to do anyway.

You don't know what life has in front of you -- married or not. Money gives you choices. Keep on with what you're doing.

 

[aaronc879]

I make $3581.00 before tax per month as a frame of reference. My only expenses are my car payment $207.00 per month which I contribute $300.00 per month, car insurance $77.00 per month, and my cell phone bill of $52.00.

Either you're leaving some expenses out or you live with your parents rent free and they pay for all your food and gas and you never get a haircut or go to the movies or go out to a bar. It would be a good idea to track ALL of your expenses for at least a year to see where you are at.

 

[Walt34]

Agree with aaronc879 - it can be tedious but keep a list of literally every penny you spend for at least a couple of months so you have an idea of where the money goes.

And yes, you need to know all of your expenses. Living with parents/relatives is okay for now but know that eventually that will change and you'll have to plan on higher housing costs.

 

[rodi]

Like Aaron - I assume you live with your parents. I also assume that's not a "forever" plan.

You need to pay attention to your spending... You can do it old school with paper and pencil or a spreadsheet, or do it with quicken or mint.

The other advice I'd give you is to increase your 401k contribution. The more you contribute when you're young, the more it has time to compound. I wish I'd contributed more than 10% when I was in my 20's...

 

[dallas27]

You're making half what most people in IT make. You need train up and look for a new job, fast. No excuses.


Sent from my iPhone using Early Retirement Forum

 

[harley]

You're making half what most people in IT make. You need train up and look for a new job, fast. No excuses

+1. I'm not going to disparage all public workers, but my consulting experiences with IT public workers would indicate that you are in a knowledge and skill hole and are going to get deeper every year. Unless you can hook on with the NSA or something. Then you can be highly skilled, but still seriously underpaid.

 

[marko]

You're making half what most people in IT make. You need train up and look for a new job, fast. No excuses.


Sent from my iPhone using Early Retirement Forum

But this sounds like a State job. At least in my state of Mass, those are sweet jobs with awesome benefits, job security, pensions, early retirement and no heavy lifting.

Around here "getting on the "Courts" " (or MBTA, RMV, etc) is the gold standard.

Had I been a little smarter 40 years ago and "played my cards right", I'd have RE'd 20 years ago at 43 with full pay and bennies. Then I'd be on this forum boasting like my neighbor does about how --the city in his case-- pays his fed income taxes and gives him a 25% discount on his property taxes too.

Had I known!

Each state it different so YMMV.

 

[bingybear]

I make $3581.00 before tax per month as a frame of reference. My only expenses are my car payment $207.00 per month which I contribute $300.00 per month, car insurance $77.00 per month, and my cell phone bill of $52.00.

do you live with your parents? So no rent, food, gas for the car?

 

[JPatrick]

No indication whether you hold any small cap and/or value stocks.
If not, that would be something I would add pronto. As indexes go, those pretty well trump all others over the long haul, and it is the long haul you are planning for at age 28.

 

[harley]

But this sounds like a State job. At least in my state of Mass, those are sweet jobs with awesome benefits, job security, pensions, early retirement and no heavy lifting.

Around here "getting on the "Courts" " (or MBTA, RMV, etc) is the gold standard.

Had I been a little smarter 40 years ago and "played my cards right", I'd have RE'd 20 years ago at 43 with full pay and bennies. Then I'd be on this forum boasting like my neighbor does about how --the city in his case-- pays his fed income taxes and gives him a 25% discount on his property taxes too.

Had I known!

Each state it different so YMMV.

There was a time when a gov't job (state or federal) was as you describe. I don't think that will continue in the future, especially in the state jobs where they can't just print more money. I think a lot of those awesome bennies will slip away as the various states realize how bad their financial situations are because they gave those kinds of deals. I personally wouldn't count on it, and would prefer (if I was younger and just starting out) to work in a job where I could add to my skills and income. I would trust myself to save rather than count on a faceless bureaucracy to take care of me. JMO.

 

[haha]

There was a time when a gov't job (state or federal) was as you describe. I don't think that will continue in the future, especially in the state jobs where they can't just print more money. I think a lot of those awesome bennies will slip away as the various states realize how bad their financial situations are because they gave those kinds of deals. I personally wouldn't count on it, and would prefer (if I was younger and just starting out) to work in a job where I could add to my skills and income. I would trust myself to save rather than count on a faceless bureaucracy to take care of me. JMO.

Taxpayers have looked forward to this for a long time, and I still don't see much of it happening.

Ha

 

[MooreBonds]

The big reason I bought my 5 years of service was to diversify my retirement accounts. Is there anything else I should be doing? I'm not ready to buy real estate as I'm not married or settled down.

Welcome, from another "Bond" fan.

Welcome to the forum.

I question buying the 5 years of service. You are so far from retirement so much can change before you would actually get your retirement. I realize what's done is done but I suggest you don't buy more.

Actually, I take a different view: what is the terms of your plan? If you leave the gov't, what is the min. number of years for you to vest in the pension? Can you roll it over? Him buying 5 years of service could be very lucrative, especially if he leaves now while interest rates are very low (meaning a very big cash-value)!

And if he stays....2%/year is pretty decent, assuming a well-funded pension plan.

How much did those 5 years of service cost you? Is there an opportunity to buy more?

 

[Walt34]

There was a time when a gov't job (state or federal) was as you describe.

Taxpayers have looked forward to this for a long time, and I still don't see much of it happening.

It is happening where I worked, and has happened several times. They stopped offering the pension plan I have in the mid '80's and it has been changed a couple of times since then. That is at the county level, the state never was that good.

Patience, grasshopper, patience.

 

[unno2002]

[FONT=&quot]Hopefully your vehicle is relatively economical in fuel and maintenance, AND has a reputation for long-term durability. Repeat purchases of new(ish) vehicles can significantly eat into building personal finances.[/FONT]
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[FONT=&quot]Owning a modest, secure home can be much cheaper than paying rent. We originally bought our “retirement home” to put on the market as a rental, and used the accumulated rents to further upgrade it.[/FONT]
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[/FONT]
[FONT=&quot]Stuff - If you are going to need something “down the road”, and can buy it now for later use, there is a good chance it will be a better “investment” than normal investments. Buying food on sale, in bulk cuts down on overall food costs. (One of our “highest return” investments for the past few years has been cans of corned beef. I could NOT have guaranteed after tax returns that would have kept up with the rising price of a can…) For some published thoughts on this aspect, see the book Alpha Strategy, available online free to read at: [/FONT]
[FONT=&quot]http://www.scribd.com/doc/6230684/The-Alpha-Strategy[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Jack Spirko, a podcaster on preparedness, speaks on how preparedness is also a retirement plan.[/FONT]
[FONT=&quot]http://www.thesurvivalpodcast.com/episode-278-preparedness-as-a-retirement-plan
http://www.survivalpodcast.net/audio/2015/1-15/epi-1500-home-2-homestead.mp3[/FONT]
[FONT=&quot]
For more thoughts on “outside the box” investment / cost cutting try:
http://www.offthegridnews.com/otgN451/cutelectricbills.pdf
http://www.offthegridnews.com/otgN451/Supermarket_Survival.pdf[/FONT]