jackster1232002
Dryer sheet wannabe
- Joined
- Jul 7, 2013
- Messages
- 12
Hello all. I am getting married in 2 weeks (get to file as married yay!) and I have a few questions about investing for our retirement.
some details:
Combined annual income last year was 85k; 60k and 25k.
We have a mortgage at 3.75% for 15 years. Currently paid off an equivalent of 1.5 years (I've been doubling our monthly payments so that we will pay off our home earlier, before 2020). Loan is currently at 70k.
I currently Have 30k in a mutual fund (american funds...I know it wasn't the wisest choice, but I was young and I didn't know better).
Currently I have a SEP-IRA plan where my employer contributes and additional 12% to a retirement account currently at 20k.
My fiance has something similar 401-k but she doesn't/hasn't contributed yet. Her employer does contribute 5% (at her age, but will double to 10% when she gets older) of her annual income without her contributing anything.
We have an emergency fund.
No debt except a few thousand in 0% APR CC's that we got to pay off the wedding.
No car payments and no student loans.
We have 20k liquid now.
5 Year Action Plan:
I plan to start a ROTH-IRA in the next couple of months (probably after the honeymoon and the wedding when I know we are more financially stable). We unfortunately won't be maxing this out. Perhaps 100 to 250 a month to start off with.
The home we are in is a HUD home and under the agreement, we have to live here for at least another 18 months. With this in mind at the end of the 18 months I will be renting out the home. For the purposes of this exercise let's say the rent will be $1000 a month after taxes and fees. The town I live in is a college town. My house is relatively close to campus (10 min drive). I do not see vacancy will be an issue if the price is right.
Since I'll be renting out that home I'll be purchasing another HUD/Fannie Mae property (for the sake of easy math let's say 100k). 20% down payment would be paid to avoid POI and to keep interest down. Slush fund of 10k would be set aside for any necessary home improvements as well.
I will also be selling the american fund mutual funds (it's class C... I know another bone head mistake...) within the 5 year time period. When I do this is still up in the air. As the new home purchase in the next 18 to 24 months may have an impact.
Here are my questions:
When should I sell my mutual funds? At the very least I know I need to switch them to Vanguard ASAP just to get lower fees.
Should I sell my mutual funds and max out my Roth IRA? If I do it now I can put 5.5k in 2013 and 5.5k for 2014.
When I sell my mutual funds and reinvest in vanguard mutual funds, when I purchase the 2nd property and need more cash than we have on hand, what penalties would I incur if I sell off a few shares?
Dumb question but I assume when I reinvest it should be A class funds with vanguard?
If one day we do exceed 181k (or whatever the limit for ROTH is at that time), what do we do then? Start a T-IRA?
Please any other financial advice would be very very helpful.
Thank you all.
some details:
Combined annual income last year was 85k; 60k and 25k.
We have a mortgage at 3.75% for 15 years. Currently paid off an equivalent of 1.5 years (I've been doubling our monthly payments so that we will pay off our home earlier, before 2020). Loan is currently at 70k.
I currently Have 30k in a mutual fund (american funds...I know it wasn't the wisest choice, but I was young and I didn't know better).
Currently I have a SEP-IRA plan where my employer contributes and additional 12% to a retirement account currently at 20k.
My fiance has something similar 401-k but she doesn't/hasn't contributed yet. Her employer does contribute 5% (at her age, but will double to 10% when she gets older) of her annual income without her contributing anything.
We have an emergency fund.
No debt except a few thousand in 0% APR CC's that we got to pay off the wedding.
No car payments and no student loans.
We have 20k liquid now.
5 Year Action Plan:
I plan to start a ROTH-IRA in the next couple of months (probably after the honeymoon and the wedding when I know we are more financially stable). We unfortunately won't be maxing this out. Perhaps 100 to 250 a month to start off with.
The home we are in is a HUD home and under the agreement, we have to live here for at least another 18 months. With this in mind at the end of the 18 months I will be renting out the home. For the purposes of this exercise let's say the rent will be $1000 a month after taxes and fees. The town I live in is a college town. My house is relatively close to campus (10 min drive). I do not see vacancy will be an issue if the price is right.
Since I'll be renting out that home I'll be purchasing another HUD/Fannie Mae property (for the sake of easy math let's say 100k). 20% down payment would be paid to avoid POI and to keep interest down. Slush fund of 10k would be set aside for any necessary home improvements as well.
I will also be selling the american fund mutual funds (it's class C... I know another bone head mistake...) within the 5 year time period. When I do this is still up in the air. As the new home purchase in the next 18 to 24 months may have an impact.
Here are my questions:
When should I sell my mutual funds? At the very least I know I need to switch them to Vanguard ASAP just to get lower fees.
Should I sell my mutual funds and max out my Roth IRA? If I do it now I can put 5.5k in 2013 and 5.5k for 2014.
When I sell my mutual funds and reinvest in vanguard mutual funds, when I purchase the 2nd property and need more cash than we have on hand, what penalties would I incur if I sell off a few shares?
Dumb question but I assume when I reinvest it should be A class funds with vanguard?
If one day we do exceed 181k (or whatever the limit for ROTH is at that time), what do we do then? Start a T-IRA?
Please any other financial advice would be very very helpful.
Thank you all.