Retirement

SmilelyEyes12 · August 2015

How did you decide where to get a retirement plan from?

I know most people are able to get them through their employers - however my employer does not offer any type of retirement plans.

DH works for a great company - has a GREAT plan and is doing very well with his - however I would like to start one of my own.

Any advice on where to look? Is it as easy as going to my normal bank?

We are just about to be cc debt free, we have a solid e fund in place and will be ready for a house early next year. I would love have to have this in place before we start looking!

Thanks!

vlagrl29 · August 2015

I know our credit union does offer retirement plans so that is a possibility for you. For me the last corporate job I had put their 401ks with Fidelity so when I left I just kept it with that company and rolled it over to an IRA with Fidelity. I'm very happy with them - customer service is great, easy to work with, and will educate you on investing without any charge.

hoffse · August 2015

Look at opening a Roth IRA - Fidelity, Vanguard, Schwab, etc. are all good. H and I use Fidelity really for two reasons - first, there is a branch in the town where we live so if we must go in we can go there on our lunch break without having to take any time off from work, and second, we have the Fidelity AmEx that gives us 2% back on all purchases, deposited into a brokerage account. I try to limit the number of banks I do business with for the sake of simplicity so that's why we use them. I've actually had an account with Fidelity since I was in middle school thanks to my parents, but I've been actively managing it for the last 7 or 8 years or so. H's Roth IRA is through Fidelity as well so that we can see both accounts at the same time whenever we login. We've been really happy.

That said, my 401(k) is through Vanguard, and they're just as good. I do like Fidelity's interfacing better, but that's a small thing.

Any of these places will have excellent customer service and knowledgeable people who answer the phones. I've asked random customer service reps at Fidelity about the timing of contributions for an IRA conversion for tax purposes, and they've been able to answer to those kinds of questions. It was literally faster to just call Fidelity and ask than try to find the answer myself.

I'm in two minds about retirement planning for a married couple. On the one hand, presumably you guys plan to stay married through retirement and your H will be willing to pull from his accounts to help with expenses for both of you if his account is much larger or matures first because he's older.

On the other hand, I do think it's important for both individuals to have enough in their own accounts that if something happens with the marriage before retirement, one person isn't left high and dry because they were relying on their spouse for retirement.

So by all means start contributing (and investing independently if need be) to get your contributions up. But when planning how much to save, you and your husband need to take into account both of your incomes together.

Some other big picture things to consider:

-Women live longer than men on average

-Age gaps - the older spouse's accounts will "mature" before the younger spouse's. Will the older spouse wait until the younger spouse can retire before retiring too? If not, the older spouse needs to be able to replace enough of his/her income through his/her retirement accounts alone to provide financial security until it's possible to tap into both spouse's retirement accounts at the same time.

-Early retirement - remember you can't access these accounts without penalty until you are 59 1/2. If you want to retire before then, then either one spouse needs to continue to work (and you become a single-income family with one spouse retired and one spouse working) or else you both need to be growing regular investment accounts that can throw off interest or contemplate other passive income generators so that you have a stream of income before 59 1/2. @short+sassy has been working on developing passive income generators through rental properties, and it's always really interesting to hear her perspective on it. It's just important to keep that 59 1/2 age in mind if you want to retire before then. I think there are quite a few people who reach their 50's and they are ready to be done, but virtually all of their savings are tied up in traditional retirement accounts so they are stuck working until they age in.

jessica490 · August 2015

My company puts us through Fidelity and I love it. If I had to choose it would be either Fidelity or Vanguard. My husband has a employee 401K through the Newport Group and I'm like "Who"???? But, we will both be opening up ROTH IRA's soon probably through Fidelity if not then Vanguard

Mustard76 · August 2015

I work for a bank that owns its own brokerage firm. So I rolled over my old 401(k) to the brokerage side of the bank for which I work. I like having everything in only a few places, so it's really convenient. Also, because I'm investment licensed and dually employed by our brokerage firm, for compliance reasons there is a short list of firms where I'm permitted to keep my accounts that I have to certify several times a year. Keeping my accounts "in house" is just easier.

Most large banks have a brokerage house, though. There you can find financial advisors that offer consultations for free.

als1982 · August 2015

We have Edward Jones for our ROTHs and H's 401k through Fidelity. This past weekend I set up and fully funded for 2015 an account with Vanguard for my brother and it was relatively simple. I do like to have our contributions auto-drafted from our account monthly and am not sure how that works with Vanguard, but Edward Jones has been great for that.

bparkhur · August 2015

I would open a ROTH IRA. You can create an account on Vanguard, which has very, very low management fees (perhaps the best in the nation).

smerka · August 2015

The biggest thing to look for is low fees, in my opinion. Even a difference of one percent in fees can have a huge impact on total account value. Typically, you won't see how much money goes towards the fees on your statements and frequently it can be hard to find the fees you will be charged. There was a Frontline on this topic a couple of years ago that is worth watching. In general actively managed funds will charge higher fees and often do not result in better returns than index funds. I use Vanguard and have for many years (since high school). They do not have locations but I have always gotten the help I needed over the phone.

dragonstarjk · August 2015

I originally decided on a Roth IRA because when I was in a college personal finance class, I learned about the magic of compound interest on a Roth IRA, LOL. So, I decided when I turned 24 that my birthday present to myself was to open a Roth IRA. I tried out Fidelity at first, and then I transferred the funds to Vanguard because I find their website easier for me to use and understand.

I didn't have an employer plan at the time. Now, I have a 401K through work that I contribute to, but I still contribute to my Roth IRA as well. I don't know if it matters, but I feel more secure having it invested in two different retirement vehicles.

I would NOT recommend getting a retirement plan through your local bank, unless it is through the brokerage branch of said bank. We offer IRAs at the bank where I work, but the non-investment IRAs make very, very little money. Not a good strategy unless you are close to retirement and want your funds to be secure.

short+sassy · August 2015

SmilelyEyes12 said:

How did you decide where to get a retirement plan from?
I know most people are able to get them through their employers - however my employer does not offer any type of retirement plans.
DH works for a great company - has a GREAT plan and is doing very well with his - however I would like to start one of my own.
Any advice on where to look? Is it as easy as going to my normal bank?

We are just about to be cc debt free, we have a solid e fund in place and will be ready for a house early next year. I would love have to have this in place before we start looking!

Thanks!

I think this is such a wise plan. If you are already used to and in the habit of putting money aside for retirement before you start looking for a house, it will be easier to "forget" that money exists. Then you can budget accordingly for a mortgage payment that is no more than $XX.

Though not retirement related, I do that with my Health Savings Account (HSA) funds. Every year, I choose the max deduction allowed by the government. It's a good sized chunk of change that gets deducted! But its money I never see in my paycheck, so I don't miss it.

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