5k for retirement first?

[CarpetJocky]

So I am interested in retirement. I am trying to Imagine what it is like to just kick it at 55 not having to worry a whole lot about life in general, besides health If I make it to 55.

Just trying to get some input If I have 5k for retirement would it be wise to put this money in a retirement portfolio, Or wait till I have 10k for a cd that will bring interest. Just trying to figure what would be a good way to go for a step ahead in life
Thanks, CarpetJocky.

 

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[maximus20895]

How old are you right now. How long until your reach 55 so we will know how long you need to invest and at what.

 

[Runum]

If you were to use the $5000 as a tool and work to become more educated you MIGHT be able to retire in a much shorter period of time. There are much better places to invest your money than savings or CD's.

I am assuming you already have cash reserves and this $5000 is investment money.

Side note: Woop, this is my 3000th post!:banana:

 

[CarpetJocky]

Well tbh with my situation I only have about 2600 in savings plus another 1000 or so in a roth Ira. I am 27 fantastic years lived. I know it is good to save but I would like this money to work for me If I knew how to put it somewhere, anyone get my drift,:fastlane: -Carpetjocky.

 

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[Runum]

Sounds like you have a lot of reading and learning to do. This is the tough part, no one can do it for you. We can help guide you but you have to take the time to do your own research. It's called doing your own "due diligence". Scroll down the main fastlane page. On the right you will see a bar called the "Fastlane Legends." Keep scrolling down to "Getting Started." Read and follow several of those threads.

As you progress and learn more your questions will change. Your eyes will open to what you can't see now. As your questions change we can help you with the answers. You have to take the first steps though. Good luck.:cheers:

 

[maximus20895]

pay your self first! Put everything you can in your retirement. Max it out. This is free money in the long run.

 

[Runum]

pay your self first! Put everything you can in your retirement. Max it out. This is free money in the long run.

I do agree with pay yourself first. I disagree with maxing out any government sponsored retirement account. Why would you put the money that you worked hard for into any account that you cannot control? If you are going to put it into a retirement account what vehicle would you use within that account? Annuities, mutual funds? Annuities are tax deferred and the salesmen frequently sell them inside of an IRA so the unfortunate saver pays double fees. The mutual funds have had two major loosing years within the last 8 years. How many times can you afford 50+% losses? How much can you afford to pay to a money manager to lose your money for you while he gets paid whether you win or lose?

Your turn to please explain your position on this.

 

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[maximus20895]

I would use mutual funds and stocks. There are some mutual funds and stocks that are doing very well. Since March I have increased my portfolio by 33% using these two methods.

Yes, your retirement account is not liquid by any means until you get older, but you are allowed to move your money into stocks or whatever your company's policy is.

What would you do with the money instead?

What money manager are you talking about? Isn't it an option to use a money manager or not? After all, no one cares about your money more than you.

I hope i'm not way off topic. I would like this to continue and see your view

 

[rcardin]

SELF DIRECTED ROTH IRA The money is yours to invest as you wish to include real estate and hard assets.

 

[Runum]

I participated in company sponsored 401k plans. You do know that they take out their management fees before they disperse the returns. Many companies have reduced or removed any company match. You cannot touch the money you earned until you quit or retire. If you quit and withdraw the money you will pay about 45% taxes and penalties. How much money does your money put into your pocket each month? ZERO

I rolled money over into an IRA. You have to have a manager for your IRA. They get paid win or lose. The manager of the mutual funds gets paid win or lose. You lose 50% in one year how much do you have to make to get back to even? 100%. Try doing that two times in eight years. It hurts.

I took out my money from my IRA around 2004 after recovering some of my losses. I will not pay anyone to lose money for me. My wife's retirement money is locked into her accounts and she lost 50% last year. How much did I lose last year? ZERO. My money pays me cash each and every month, now AND when I am 60+ years old.

You can make your money work better than the corporate IRA pablum that the industry spits out. This is the fastlane, correct?

 

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[maximus20895]

I'm confused by your statement "how much money does your money put into your pocket"

I know several companies that match the IRA and some that even more than match it. With in that IRA fund you have a choice of companies, for example lets say TIAA Cref. With TIAA you can put your money into whatever mutual funds they give you, some of which are bad, but some are pretty good.

You also have a supplemental retirement plan that you can choose to participate in or not. This, like the IRA is also taxed diferred, but you still have to put money into a companies like TIAA or fidelity which gives you options to put it into mutual funds and even individual stocks.

I understand that you have a manager to manage the mutual funds, but you have a choice which mutual funds you want to partake in. So it's not like you have to participate in a horrible mutual fund. IF all else you can not put your money in mutual fund, have it tax deferred and let the company match it.

So what happens if you don't put money in retirement, you don't have any when you retire! Why do you want that. I don't understand why you would not want to have tax differed income, that your company matches! That is free money.

Once again, you don't have to partake in the mutual funds. That is a risk/reward strategy.

What do you use the potential money for your retirement money for? Where do you put it instead of a retirement fund? It's like your saying putting money in a retirement fund is bad, which is simply not true.

It seems you are putting some of your personal losses into this argument.

Your turn )

 

[Runum]

Damn straight I'm putting personal losses into this. I think I am fairly representative of the average Joe at that time. I bought into all the corporate crap years ago and saved a chunk. I heard all the projections 8% average return over your lifetime, save until your 60, blah blah blah. Then the bottom fell out in 2001 and I lost 40% in one year. Where were all those high priced money managers that my fees paid for? How about some advice on moving the money to preserve capital? What were they getting paid for?

I am also putting my personal gains into this conversation. My savings and investments put actual, spendable, cash into my pocket now and into the future. I, personally, do mine with real estate that I control. Other people may do it with Forex or futures or other methods I don't know about.

There is nothing wrong with planning for retirement and putting money into an account for it. I would just rather retire as young as possible. If you put your money to work now you may be able to retire in as little as five years. Why wait until your 60?

You are right, no one cares about your money more than you do.

 

[maximus20895]

What exactly did you put your funds into? How did you lose it all? Did the company go out of business or what?

I don't blame you for being a bit edgy on this topic considering what they told you and what really happened.

 

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[Runum]

I didn't lose it all. I took action to prevent that from happening. I do understand that I have been using my personal experience but that is what I have to go by. Lessons learned the hard way.

What it all comes down to is safety, control, risk and reward. I do not believe, anymore, that the 401k/IRA money is safe. I do believe that the saver(not investor) gives away too much control of his money that he earned when he chooses to participate in this entity. I do believe that the matching funds(the carrot) is not enough to overcome the lack of control. I do believe that the corp blockheads will tell you what you want to hear to make the sale. I do believe it is way more risky for an investor to trust someone else to make financial decisions for them. I do know that I can make more return than they can with a little more effort on my part and with far less risk.

Each person has to decide on their own route. They have to decide their own comfort zone, risk tolerance, and willingness to educate themselves.

Also, you may consider me edgy about this. I prefer to call it highly opinionated based on tough lessons. I do wish you well.:cheers:

 

[andviv]

SELF DIRECTED ROTH IRA The money is yours to invest as you wish to include real estate and hard assets.

Ding ding ding ding....

Right answer in my opinion.