ladydenise226
New member
@childofgodharrison I don’t think you need a financial advisor honestly. You just need to change your spending and saving patterns. A FA will cost you a decent amount of money and you aren’t at that point yet.
Retirement? Never heard of it
- Thread starter childofgodharrison
- Start date
@childofgodharrison You don't need a chef (advisor). You need a cookbook (financial literacy).
@childofgodharrison JMO and TIFWIW but I'd skip on the (expensive) financial advice and invest in broad low-cost (low fees) index funds (examples include VOO, VTI, VXUS, VEA, VWO, VT, etc) inside of tax-advantaged retirement accounts (401k and IRA; Roth & Pre-Tax).
childofgodharrison
New member
@littletim I was always taught (probably incorrectly) that you should only put in what your employer matches... again, both of our families are not in any position to retire so not much help from them. I guess I don't understand the benefits of a 401k other than the employer match.
@childofgodharrison no you should always take the max but the goal should always be 15%. What if you both worked for companies that didnt provide a match? You think 0 would be enough for retirement?
The advantages of a 401k are they are sheltered from most bankruptcy and lawsuits. Traditional contributions are tax free now (meaning you can contribute more than if it were after tax). Roth Contributions are taxed now but are tax free to take out when you retire. At your incomes Roth is less advantageous because of how much saving pre tax would be for you all. The general rule of thumb cutoff is 22-25% marginal (not effective) tax bracket. So if you are in the 22% bracket and your state has a 2% income tax you should be doing traditional.
The advantages of a 401k are they are sheltered from most bankruptcy and lawsuits. Traditional contributions are tax free now (meaning you can contribute more than if it were after tax). Roth Contributions are taxed now but are tax free to take out when you retire. At your incomes Roth is less advantageous because of how much saving pre tax would be for you all. The general rule of thumb cutoff is 22-25% marginal (not effective) tax bracket. So if you are in the 22% bracket and your state has a 2% income tax you should be doing traditional.
childofgodharrison
New member
@childofgodharrison 4% rule says you need 25x the income you replace for what you expect to spend when you retire. For 200k thats 5M.
@childofgodharrison That's the minimum you put in, not the max.
People are saying 15%, but since y'all make over $200k, it should be at least 20%, not including any matches!
At bare minimum, put $23k into your 401k this year, plus $7k each into RothIRAs. Then, look at opening a solo 401k for your spouse or putting the rest into a taxable mix at a broker (Vanguard, Schwab, Fidelity are the big three).
Finally, every dollar should have a job. It would look messy on this chart, but if we asked, you should be able to detail where that nearly $4k went.
Read, ask questions, don't use your family history as an excuse (trust me, it doesn't end well to only attain what they did!).
People are saying 15%, but since y'all make over $200k, it should be at least 20%, not including any matches!
At bare minimum, put $23k into your 401k this year, plus $7k each into RothIRAs. Then, look at opening a solo 401k for your spouse or putting the rest into a taxable mix at a broker (Vanguard, Schwab, Fidelity are the big three).
Finally, every dollar should have a job. It would look messy on this chart, but if we asked, you should be able to detail where that nearly $4k went.
Read, ask questions, don't use your family history as an excuse (trust me, it doesn't end well to only attain what they did!).
@childofgodharrison If you Google "financial order of operations" you'll probably find a bunch of stuff, and some of it may differ/disagree on some of the finer details, but in general I think there's (largely) consensus on:
-you should (almost always) at a bare minimum put in enough money to get your full employer match. It's hard to imagine a 401k that is so bad in terms of administrative fees and high-fee-selections that it isnt worth taking the "free money" employer match
- then if you have more money you probably turn to a ROTH IRA and max that out
- if you've done both of those and STILL have more money turn back to your 401k and max that out to the allowable limit.
IRAs and 401ks both have substantial tax advantages (no capital gains taxes) compared to saving outside of retirement.... The obvious drawback being you can't (without penalty) use that tax advantaged money for anything before you reach retirement age, and there can be plenty of other high-dollar-value long term things worth saving other than just retirement....
-you should (almost always) at a bare minimum put in enough money to get your full employer match. It's hard to imagine a 401k that is so bad in terms of administrative fees and high-fee-selections that it isnt worth taking the "free money" employer match
- then if you have more money you probably turn to a ROTH IRA and max that out
- if you've done both of those and STILL have more money turn back to your 401k and max that out to the allowable limit.
IRAs and 401ks both have substantial tax advantages (no capital gains taxes) compared to saving outside of retirement.... The obvious drawback being you can't (without penalty) use that tax advantaged money for anything before you reach retirement age, and there can be plenty of other high-dollar-value long term things worth saving other than just retirement....
@childofgodharrison There is a benefit. It's a huge benefit to contributing more than your 401k match. This is especially true when you make 192k annually. Max out your 401k to save on taxes.
@childofgodharrison You don't need a financial advisor.
Financial advisor is more for retirees when they get much older.
If you need ideas for investing when you're young, it's very simple.
Broad index fund. That's it. Don't overcomplicate things.
Financial advisor is more for retirees when they get much older.
If you need ideas for investing when you're young, it's very simple.
Broad index fund. That's it. Don't overcomplicate things.
iamgr8tful
New member
@childofgodharrison The fuck is "miscellaneous spending"?
childofgodharrison
New member
@iamgr8tful fun things
iamgr8tful
New member
@childofgodharrison I found the problem
awakeinthematrix
New member
@childofgodharrison It’s kind of insane that you’re grossing more than $200k with no kids and still barely putting anything in retirement. Those accounts should practically be getting maxed out at this point.
“Miscellaneous spending” being the largest single category here is pretty concerning, and telling. Your first step should be to find out exactly where every dollar of that is actually going. Then, find out what you can cut down. Then put those savings toward retirement, invested in broad indexes. You don’t need a financial advisor for this.
“Miscellaneous spending” being the largest single category here is pretty concerning, and telling. Your first step should be to find out exactly where every dollar of that is actually going. Then, find out what you can cut down. Then put those savings toward retirement, invested in broad indexes. You don’t need a financial advisor for this.
childofgodharrison
New member
@awakeinthematrix We have expensive hobbies and expensive home improvement that we have let run rampant for a few months. Definitely need to reel it in and increase retirement contributions.
dominion247
New member
@childofgodharrison Don't take this the wrong way, but you don't make nearly enough money to warrant a financial advisor. A couple of index funds/ETFs, DCA consistently, and you're fine. Wouldn't even look at an FA until at least $500K/yr. Going to get recked on managment fees.
childofgodharrison
New member
@dominion247 Not taken the wrong way at all! We didn’t know what we needed - no family to give good advice. Sounds like we can handle this ourselves with some major contributions adjusting.
dominion247
New member
@childofgodharrison Check out bogleheads and research DCA. It's not for everybody but it's absolutely the safest and most consistent way to build wealth while young. When you get older and have accumulated more money, find a fantastic FA, with access to private equity opportunities, that's where you'll get really rich. - CPA
@childofgodharrison Miscellaneous spending is the largest line item! 
Also, y’all are spending $1500 a month on food. We spend about that much and are a family of 5, and we eat well, so that seems very high to me.
Also, y’all are spending $1500 a month on food. We spend about that much and are a family of 5, and we eat well, so that seems very high to me.