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Post by suzicabloozie on Mar 25, 2011 15:19:25 GMT -5
Hello, I just signed on to the new boards. I was a lurker on the old boards, and I'm ready to step out My DH and I currently fully fund a Roth for each of us each year, and my DH pays into a pension. I do not have any retirement saving option at my place of employment. We have a 9 month emergency fund, and we are also saving in a 529 for our DD. We have at least $500 left each month that we would like to put into additional retirement accounts, taxable accounts I'm thinking, but I have no idea what types of funds to purchase. Any ideas? I'm 36 and my DH is 40.
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HoneyBBQ
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Post by HoneyBBQ on Mar 25, 2011 15:21:16 GMT -5
Standard answer is something that tracks the S&P 500, you've got several options at Vanguard, Fidelity, etc.
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Post by Savoir Faire-Demogague in NJ on Mar 25, 2011 15:21:56 GMT -5
You guys are doing excellent. You likely are good candidates to speak with a fee for service financial planner to review your entire situation, speak about your goals and plans, etc.
As a knee jerk reaction I would say to open a taxable account and put money into some sort of total market index fund.
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Post by suzicabloozie on Mar 25, 2011 15:40:36 GMT -5
How do you find a good fee based planner? I don't think I know anyone who used one.
Also, the 529 we have is with Vanguard, so I figured I would get funds there. Would it be smart to put some money into the total market index fund and some into the S&P500 index fund?
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Plain Old Petunia
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bloom where you are planted
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Post by Plain Old Petunia on Mar 25, 2011 15:44:15 GMT -5
Suzicabloozie (love your name, btw), look for a fee-only planner associated with the Garrett Network: www.garrettplanningnetwork.com/IMO, there is no need to hold both. The total market fund is the S&P plus mid and small caps. Vanguard is an excellent choice.
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Post by suzicabloozie on Mar 25, 2011 15:46:28 GMT -5
Petunia, thanks for the link! I'll check that out. My screen name: I was a total Sesame Street kid growing up!
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phil5185
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Post by phil5185 on Mar 25, 2011 16:00:37 GMT -5
put some money into the total market index fund and some into the S&P500 index fund? No - the broad generic index funds are nearly identical. I have a Total Mkt Index & a SP500 Index that I have had for over 20 yrs, their performances are so close that I couldn't say which has been best. Essentially, both give you a wide diversification (the whole US Market). Another possibility that you might like - Vanguard has Target Funds- A Target2040 is about 90% Index Fund, 10% bonds. It re-allocates automatically as you age - ie, a set-it-and-forget-it fund.
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Post by suzicabloozie on Mar 25, 2011 16:02:14 GMT -5
Thanks everyone for the clarification on the two funds. I didn't know what the difference was!
I do also like the idea of a target fund so that I don't have to think about it, and I'm definitely a long way from retirement at this point!
Thanks for the insight!
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Gardening Grandma
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Post by Gardening Grandma on Mar 25, 2011 16:03:09 GMT -5
How do you find a good fee based planner? Keep in mind that there are fee based advisors and there are fee only advisors. A fee based advisor may charge you an ongoing % of your portfolio (1 to 2 % is common). A fee only advisor is someone that you pay an hourly fee to advise you. In your situation, I'd look for a fee only advisor. The Dummies Guide to Personal Finance has a chapter devoted to this subject with some great questions to ask anyone you are considering. If you want to fine a fee only financial advisor, there are two places to start, that I'm aware of. The first is the Garrett network that Petunia suggested. The second is the National Organization of Personal Financial Advisors findanadvisor.napfa.orgHonestly at your relatively young ages, I'd open a Vanguard account and put it all into the total market index - assuming that you can avoid the urge to pull out when the market is down. Remember 2008?
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Post by suzicabloozie on Mar 25, 2011 16:07:55 GMT -5
Thanks for that clarification, gardening grandma. I meant a fee only advisor. Thanks for the recommendations!
I do like the idea of putting everything into the total market fund and forgetting about it. I do get nervous with all the up and down, but I have to remember that retirement is at least 25-30 years off!
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Post by suzicabloozie on Mar 25, 2011 16:21:31 GMT -5
One other question with a taxable account. How does that work at tax time? Do you get a statement indicating what you would owe taxes on or something different? Thanks for the help!
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thyme4change
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Post by thyme4change on Mar 25, 2011 16:27:31 GMT -5
Yes - you get a statement. You might have to do the schedule D (??Or something) If you use any of the tax software it isn't rocket science. Heck, even when we use to do it with the booklette and a pen it wasn't the hardest part of doing taxes.
The great part about a taxable account is that the money is flexible. You may have it earmarked for retirement, but as life goes, and things happen and suddenly you need money - it is there. Start your own business, retire early, get into the rental market, go back to school, pay off a blackmailer - you know all the normal stuff that might come up where you decided that retirement savings isn't the best use of the money. I have found great comfort in having a pile of money sitting around - even if it is tied up in the market.
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cpadvisor
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Post by cpadvisor on Mar 25, 2011 16:31:28 GMT -5
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azphx1972
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Post by azphx1972 on Mar 25, 2011 16:35:41 GMT -5
Welcome! The only thing I would add is that you might want to consider investing some of your money into international index funds as well, if you aren't already. A good fee based CFP will probably tell you that though. Good luck, and great job with your finances so far!
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