Financial Plans for My Family

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Verne_Collins

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Sooner or later, I will have to think of myself and my family when I retire from work. I do not want to face challenges related to retirement planning. I wish also to live a comfortable life with my loved ones when that time comes. However, my question is, should I get something like a retirement plan? In your case, how do you manage your savings for your future and your family?
 
You will need to start putting aside 20% of your paycheck and doing a lot of reading.

Get a ROTH IRA.

Start with a subscription to Money Magazine, which is really only a baby step in information.

Look up Dave Ramsey and view his YouTube programs.

Start also with a monthly file folder to keep track of the various reports of your finances. Keep the file folders in one of those plastic milk cartons you can buy at the dollar store.
 
Verne_Collins said:
Sooner or later, I will have to think of myself and my family when I retire from work. I do not want to face challenges related to retirement planning. I wish also to live a comfortable life with my loved ones when that time comes. However, my question is, should I get something like a retirement plan? In your case, how do you manage your savings for your future and your family?
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I vote for sooner. The sooner the better. Retirement planning is all about compounding interest.

Here’s an example say you put away $100 every month from now until you retire and averaged a safe 6% interest. (disclaimer this is not enough to set aside, I agree with the 20% above)

Based on the number of years until retirement your saving would be…

40 years total investment ($48,000) equals $200,000
30 years total investment ($36,000) equals$100,000
20 years total investment ($24,000) equals$46,204
10 years total investment ($12,000) equals $16,388

See how if you only save for 10 years you won’t even double the money you set aside. But if you save for 40 years you will actually quadruple your investment.

I second the Roth also.
 
In this day and age, it’s difficult to find anywhere to put a monthly investment, and get a safe 6%…talk to a Certified Financial Planner…there’s no out-of-pocket cost to you, and IF you decide to work with one in the future, the fees are minimal.
 
You don’t say where you are, US or elsewhere.

In the US there are many individual and employer sponsored tax deferred vehicles for retirement saving. Starting early is the key to retirement savings. The time value of money is critical. The tax advantage of 401k and IRA accounts also boost savings.

Get a book on basic financial matters and begin today.
 
I remember in the early-mid 00’s, DH’s retirement plan was losing money hand-over-fist. Neither of us felt certain that we’d get back much of anything we had paid into Social Security by the time we retire. So, we looked for a physical investment that we could touch and see and would have more control over. We ended up getting into rental houses.

It’s not for everyone. There’s a learning curve, and it never stops. And it can be unpleasant having other people’s financial priorities affect you and your business. If you live in a densely-populated urban area, it can be over-regulated, and if you live in a sparsely-populated rural area, the economy can be poor and fragile.

I recommend reading “Perpetual Income” to see if it’s for you. It’s hands-down the best book I’ve read on the subject.
 
midori said:
I remember in the early-mid 00’s, DH’s retirement plan was losing money hand-over-fist. Neither of us felt certain that we’d get back much of anything we had paid into Social Security by the time we retire. So, we looked for a physical investment that we could touch and see and would have more control over. We ended up getting into rental houses.

It’s not for everyone. There’s a learning curve, and it never stops. And it can be unpleasant having other people’s financial priorities affect you and your business. If you live in a densely-populated urban area, it can be over-regulated, and if you live in a sparsely-populated rural area, the economy can be poor and fragile.

I recommend reading “Perpetual Income” to see if it’s for you. It’s hands-down the best book I’ve read on the subject.
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…and don’t do it unless you’re very financially solid yourself.

Broke landlord are terrible.
 
boldlygo said:
In this day and age, it’s difficult to find anywhere to put a monthly investment, and get a safe 6%…talk to a Certified Financial Planner…there’s no out-of-pocket cost to you, and IF you decide to work with one in the future, the fees are minimal.
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Definitely agreed with the part about getting a financial planner. Since we know nothing about your financial situation or your goals or really anything else about you, it would be tough to provide you with advice tailored to your situation and plans. Also, I would suggest not trying to go it alone, because, and I say this with all charity, is that if you are asking in such general terms about how to deal with finances, you probably want someone who is a professional who can help you.

I can certainly provide you with tons of advice and information, both general and specific, but probably too much to cover here (again, since we don’t know really anything at all about your finances, situation, goals, etc.).

Start here maybe:
Motley Fool How To Find a CFP
 
If you’re in the US, and your job doesn’t offer a retirement plan, a **Roth IRA **is definitely the way to go. If you can’t afford a financial planner, start doing your research.

Retirement takes a lifetime to plan for, so you should definitely start thinking about it now.

Think about this: When will you retire? 60? 65? 70? The average life expectancy is 78, but maybe you will live till your 85, or 90! Do you want to not work at all during those years? You need to have enough money saved up for maybe 25 years of work-free living!

It takes a long time to save up that money, so start doing every little bit you can now, because as you get older you’re going to have more expenses, a house, a family, aging parents to care for, and it will just be harder to save.

peace
 
I’m not sure a Roth IRA is the best fit for every situation. I second the advice to talk to a financial planner, and to start saving NOW. If your company does any retirement fund matching, take full advantage of it.
 
Talk to a financial planner, but also read some books, and be prepared for the financial planner having some self-serving ideas. (For example, some of them are very keen on you never paying off your house, but using the money to make investments with them.)

Term life insurance is also very important for families with young children.

Here’s a list you may find helpful:

daveramsey.com/baby-steps
 
How to Make Your Money Last: The Indispensable Retirement Guide, Jane Bryant Quinn, Jan. 2016

Many libraries have it, so you can “test drive” the book. There are others, including others on specific topics such as how to manage your Social Security income. Browse what your library has and stay tuned in case Congress changes the rules.

Do study the field before going to a financial planner, so you won’t have to pay to be educated.
 
Sooner, rather than later.
Does your employer offer a match to your 401K?

Our local credit union has a financial advisor who charges nothing. She seems very knowledgeable so I go to her. She may not be the best in the county but she knows a whole lot more than I do.
Good luck.

.
 
Start listening to Dave Ramsey, and buy his book “The Total Money Makeover.”

I don’t necessarily agree with every little thing he says, but I think his “baby-steps” would work for everyone.

Good luck!
 
Boatswain2PA said:
Start listening to Dave Ramsey, and buy his book “The Total Money Makeover.”

I don’t necessarily agree with every little thing he says, but I think his “baby-steps” would work for everyone.

Good luck!
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Dave Ramsey offers excellent advice. He is on YouTube and his books are available in your public library.

A couple of top investors said they read 500 pages PER DAY!

So, for us ordinary people, there is no substitute for reading.
 
Thanks for the wonderful responses. I must really watch Dave Ramsay’s video on youtube. I started reading books and articles as well and I am really persuaded to start saving up. Anyway, I have visited my bank and a financial company that offers retirement planning as a form of investment. I’d save up, and earn. That is how it was explained. Anyone who has this kind of plan?
 
Verne_Collins said:
Thanks for the wonderful responses. I must really watch Dave Ramsay’s video on youtube. I started reading books and articles as well and I am really persuaded to start saving up. Anyway, I have visited my bank and a financial company that offers retirement planning as a form of investment. I’d save up, and earn. That is how it was explained. Anyone who has this kind of plan?
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I would avoid that. Most banks and “financial companies” who offer these type of generic services do so because they provide a net to catch customers for their “financial services”…which make them a LOT of money.

Better to just follow Dave Ramsey’s plan.

1: Save $1,000 as an initial emergency fund.
2. Pay off all your debts, starting from smallest to largest.
3. Fully fund an emergency fund of 3-6 months of expenses.
4. THEN begin investing 15% of your gross pay into retirement
5. Then fund kids college
6. Then throw anything you have left over at your mortgage
7. Live, and give, like no one else.

Work HARD on baby steps 1 through 3 as you listen to his podcasts. By the time you get to baby step 4 you will have a decent understanding of investing. When you get to step 4, remember, simple is better when it comes to investing (ie: Just put your money in mutual funds).
 
Boatswain2PA said:
I would avoid that. Most banks and “financial companies” who offer these type of generic services do so because they provide a net to catch customers for their “financial services”…which make them a LOT of money.
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Lol…dh is in investment management…🙂
 
Boatswain2PA said:
I would avoid that. Most banks and “financial companies” who offer these type of generic services do so because they provide a net to catch customers for their “financial services”…which make them a LOT of money.

Better to just follow Dave Ramsey’s plan.

1: Save $1,000 as an initial emergency fund.
2. Pay off all your debts, starting from smallest to largest.
3. Fully fund an emergency fund of 3-6 months of expenses.
4. THEN begin investing 15% of your gross pay into retirement
5. Then fund kids college
6. Then throw anything you have left over at your mortgage
7. Live, and give, like no one else.

Work HARD on baby steps 1 through 3 as you listen to his podcasts. By the time you get to baby step 4 you will have a decent understanding of investing. When you get to step 4, remember, simple is better when it comes to investing (ie: Just put your money in mutual funds).
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It is a good point that many “financial advisors” are glorified salespeople, so you should learn a bunch before you talk to them.
 
mommy_k said:
Lol…dh is in investment management…🙂
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And I’m sure he’s a great guy.

But a newbie wouldn’t be able to tell the difference between a great guy and a not-great guy.

For example, it used to be a thing for investment advisers to try to talk people out of paying off their houses, but keeping a mortgage on the house indefinitely and investing the money instead.

For the average person, that would be terrible advice–but great for commissions.

Likewise, I was once very disappointed in a Knights of Columbus insurance agent who tried to sell us whole life insurance.

🤷

So much for caring for widows and orphans, buddy.

I think in at least some of these cases, it isn’t necessarily just a desire to put one over on the consumer–I think that a lot of workers in these fields don’t know enough to know how badly they are treating their customers.

So, going to a financial adviser should not be a first step, but there should be a process of self-education first, so that which adviser is a sheep and which is a wolf.
 
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