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29 yo - Am I headed in the right direction?
Old 04-26-2010, 02:32 PM   #1
Confused about dryer sheets
Join Date: Apr 2010
Location: Lower Peninsula
Posts: 8
29 yo - Am I headed in the right direction?

My wife and I are 29 years old, we'll be 30 late this year. We've really been trying to get our retirement on track and would like to get some feed back from others.

Here is a summary of us:

401(k): $48,000
Roth IRA: $16,000 (In CD's)
Savings: $18,000
TD Ameritrade: $6,000 (All Dividen producing stocks)

Purchased our home in 2002, purchase price: $150,000
Down Payment: $30,000
Current Pay-Off: $100,000 (Just Under)
Current Home Value: $150,000

We just purchased a new vehicle, before you say we shouldn't have let me explain. My wife's old vehicle engine blew up, which she had for almost 8 years and put $150,000 miles on it. We had an extra vehicle that she drove in the mean time. We looked at some used SUV's, 2-4 years old, but couldn't find anything reasonable, value or mileage. One vehicle that was on our list was a 4-Door Jeep Wrangler, so we decided to see what a new one would cost. The new one cost us about the same as a 3 year old one with 30,000+ miles on it. So, we got a new Jeep Wrangler 4-Door for $26,500 out the door and the sticker was $29,600. Used ones were going for $23,900-$25,900. We also, decided not to put any money down because we got an interest rate of 3.24% at our local bank.

Here is our 2010 annual investing targets:

My 401(k): $7,500, Company Match: $5,300
Wife 401(k): $4,800; Company Match: $1,600 (She also has a company pension plan)
Roth IRA: $10,000
Savings: $2,400

We will also be paying double payment on the new Jeep until it's paid off, this is typically for any vehicle we've bought. In the past we've made extra payments on our home mortgage, but haven't been and won't be until we have no car payment again.

Now that we're maximizing our Roth IRA, should we put more into our 401(k)'s?
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Old 04-26-2010, 02:53 PM   #2
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MasterBlaster's Avatar
Join Date: Jun 2005
Posts: 4,386
It seems as if you are off to a good start.

Check out the "ballpark estimate" for how on track you are...

Choose to SaveĀ®

You may be able to get by on less than the recommended amount if you aim for a modest retirement lifestyle. Retirement income replacement ratio's are a debated topic on this forum. Many believe that for someone with a professional income and modest retirement goals that the recommended replacement ratio can be significantly less. let your expenses be your guide to how much of a nest egg you actually need.

Nonetheless the ballpark estimate and other guides can be instructive.

For what it's worth... Someone such as you shouldn't tie up your cash in CDs. Consider an equity heavy portfolio at your age. Also the fees on an Amiritrade account can be very high. Consider moving such to a low(er) cost family like Vanguard or Fidelity. Funds such as their retirement date 2040 or maybe 2045 funds might suit the bill for you in terms of asset allocation.
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Old 04-26-2010, 04:04 PM   #3
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Join Date: Mar 2009
Location: Akron
Posts: 130
agree with MB. No reason for CD's in a Roth IRA for a 30 year old. Id suggest a stock index fund, for the majority (a big majority...70-80 percent-ish) of your retirement assets given your situation. VTSMX would work well.
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Old 04-26-2010, 08:29 PM   #4
Confused about dryer sheets
Join Date: Apr 2010
Location: Lower Peninsula
Posts: 8
A majority of my CD's are in a 5.25% for 5 years, so I think that's a good move. I like the CD's for my Roth IRA because that is pretty much a cash asset that always increases and there wouldn't be any tax burdens if I withdraw my inital contribution.

What do you mean that TD Ameritrade fees are high? When I opened my account it was the lowest. How much lower are Fidelity than TD Ameritrade? My employer and wife's employer both use Fidelity to manage our 401(k)'s. My IRA's are through my local bank and there are no fees.

Thanks for the words of wisdom!
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