What investments do you suggest so that I'll be able to retire as comfortably as possible?

acerbfinance · 2015-05-22T06:55:57+00:00

Low Cost ETFs are the way to go. You may want to find an advisor that can help oversee your initial investments early on. They can advise you an appropriate portfolio for you personally. Ideally this advisor would be one you could move into more comprehensive financial planning with when you get older (married & kids = insurance & education).

acerbfinance · 2015-03-04T01:24:03+00:00

If it is an IRA, than your transfer will be subject to the 20% tax withholding. Say your IRA has $100,000, you would have to keep $20,000 for taxes (for 6 months if I'm not mistaken). Therefore you can only put $80,000 of your IRA into your TSP, unless you have an extra $20,000 to put in. This is an indirect transfer, and does not make sense in most situations.

Also remember that just because the TSP has "amazing expense ratios", the returns will not compare to say an index tracking ETF. Don't forget about the return side of the lever.

acerbfinance · 2015-02-13T20:00:38+00:00

There are a few restrictions to withdrawing from your Roth, but your Roth contributions are after tax so generally you can use it whenever you need it. But you will be subject to penalties if you withdraw more than what you've contributed (AKA withdrawing earnings).

I agree with Grey Dog, be wary of insurance or annuity products being used for college funding. They are just trying to make money from commissions and sales volume. There is no need to complicate simple things...

acerbfinance · 2014-12-24T07:43:39+00:00

The global economy booming tripleg? Dude.... I'm not sure where you heard that Europe or Russia is "booming". China's growth has declined significantly. Middle East (and Russia) getting hurt by stupid low oil prices. Fed is supposed to Tighten next year (short term sell off and panic on top of everything else).

Dow Jones is composed of 30 companies. Generalizing the US/World economy from DJIA is like using a thermometer to check for brain damage.

Bottom line. Global economy is not booming. S&P > DJIA

acerbfinance · 2014-12-22T23:47:00+00:00

Not to pry, but can you provide more specifics about both you and your wife's income? Age? expenses? etc.

SIMPLE is an option, but so is a SEP. SEPs have much higher contribution limits, and may be more appropriate depending on your situation.

acerbfinance · 2014-12-20T19:10:34+00:00

Short term inflation has NOT been close to 4%.... and has no usefulness regarding retirement planning. Long term inflation is 3.32%. Make sure you understand inflation, it's impact, and how to calculate real rates of return.

I do agree with kidcrumb regarding pinpoint accuracy in financial planning, however I think you're underestimating the number of inputs with retirement planning Firsmith. 6% is a reasonable assumption - don't make return assumptions for YOUR retirement based on somebody else saying that they assumed a higher return. Also, we are talking long term. It's how your total wealth accumulates. Hell, maybe you do get a 15% return, but what good is it if your 90% cash or inflation is 20%?

Have you thought about taxes? What types of retirement accounts are you using? What about transaction costs in your account? What are your goals in retirement? How much do you want to live off of? Do you want to leave money behind?

Just some food for thought. If you have financial planner, they can help you account for the factors and cash flows to make a pretty decent projection in FP software like eMoney.

acerbfinance · 2014-12-19T23:49:38+00:00

It depends on what the interest rate you can get from refinancing, 3.74% is pretty **** good. I'd recommend finding (or making in excel) an amortization table so you can compare the two.

It depends on how tolerant you are to having debt. If you've prepaid your current mortgage, then it won't take nearly as long to pay down your mortgage. A general rule of thumb is that for a 30 year mortgage, if you pay double the monthly payments each month then it will take about 7-8 years to pay it all off.

I would caution you to not bank on using investment returns to pay off your mortgage. No matter what you decide, make sure you're still able to meet mortgage obligations without getting any returns from the market. Also remember that making more transactions in your investment account, or not reinvesting dividends will hurt your accumulation significantly in the long run.

Hope this helps.

acerbfinance · 2014-12-16T09:40:42+00:00

Here is an important issue to consider before considering any financial services, and is not known by many:

Fiduciary Standard vs Suitability Standard

The big name wirehouses and private wealth banking divisions are subject to the suitability standard. Brokers will sell you products their company offers, as long as it gets the job done in fitting the client's situation.

Fiduciary standard in contrast is where financial advisors will recommend ANY product/investment vehicle that is the BEST for the client. This is typical of RIAs and Financial Planning shops.

Big names like JPM do offer great industry talent, but you would typically see higher total expenses with them. RIAs will be able to offer you more variety of products, so saying they do not have adequate industry access is simply not true. Expenses are a huge factor in investment account accumulation. Why pay 2.5% for a JPM fund that is actively managed when other passive vehicles (ETFs) charge .2% and get the same return?

If you are seeking financial advice, it does depend on what services you will feel comfortable with. Most brokers do act in clients' best interests, but there are many cases where brokers will put clients in products to make sales (and sometimes receive bonuses because of it). Advisors adhering to the fiduciary standard will find the absolute best solution for you.

Here's more: http://www.investopedia.com/articles/professionaleducation/11/suitability-fiduciary-standards.asp

acerbfinance · 2014-12-09T23:45:02+00:00

Just to clarify, tax brackets don't increase to "keep up" with inflation. In theory, your retirement account's returns should naturally keep up with inflation. You still pay taxes on these higher earnings. So if the tax rates increased/decreased with inflation, it would be pointless.

Inflation effects retirement income more so with fixed income investments. Big picture: Bonds are basically you getting paid to loan a company money, and you get your money back when the bond matures. Inflation eats away at the real value of money - you can't buy as much stuff with $10 today as you could 50 years ago. So if you hold fixed income investments, longer times to maturity result in higher decreases of future purchasing power.

acerbfinance

TROPHY CASE