All Life Insurance Tips

Retirement Plan Options?

I'm looking for additional retirement plan options and was wondering what else is available to us middle income earners? I participate in my firm's 401K. I have a Traditional IRA and contribute to it. I have a Roth IRA (recently opened to receive an old 401K via the 2010 Conversion). My wife has a Traditional IRA (spousal IRA which I fund on her behalf). We have a joint mutual fund account. I am aware of three types of annuities (immediate, variable, and fixed). I am aware of universal and whole life insurances (as part of a retirement portfolio). Have I left out any insurances? What else is out there that I should consider and research? I'm 44, I plan to fully retire at age 62 ~ 64 depending on the overall financial environment. I plan to sign up for Social Security benefits (at age 62) but will delay taking any payments for myself until age 70, although my wife (at age 63) will begin collecting benefits based on my earnings. I'd appreciate any ideas for me to consider and research. Thank you. Thanks so far for your inputs - we have zero children and only ourselves to rely upon. Thanks, keep 'em coming! We rent our apartment and do not own any real property (house, land, etc.). We don't foresee owning any real property as we will be living in another country and not the USA. I max out my 401K with $16,500. I max out my TIRA with $5,000. I max out my wife's Spousal TIRA with $5,000. I set aside $12,000 per year into our joint MF account. And I put aside about $18,000 into our emergency fund for rent and house bills for one year. I need ideas on what else to invest our money. Thanks. I already have a Term Life insurance policy to cover me in case I die. I brought up the Life Insurances because certain ones can be used as an investment vehicle ONLY; the "insurance" part of it I'm not concerned with because my Term insurance is the REAL insurance my wife will rely upon when I die. I'm retired US Air Force so I'll have an income, and medical insurance for life (regardless of the politics, even if I have to pay something for it). The reason I want my wife to begin receiving SS bennies based on my earnings is because she is a Homemaker and doesn't have enough "work credits" to receive SS in her own right. Plus, we can begin investing that income into our MF account. Thanks for the Boost Harry, I appreciate it. My income isn't huge but I manage it well enough to ensure I can set aside money intended for our future. I want to educate myself on what all the options are for us so I'll be better prepared for the future. My mathematical models project our total investment balances to be between $800K and $1.7M in CY 2030. I based my model on Future Value, 6% per year; if we "earn" more great but I figured this modest return was realistic to use for our model.

Public Comments

1. Annuities - big money makers for the people that sell them (cough - example - Edward Jones). Do not ever touch variable annuities - they are the most profitable for them - highest in fees for you. Stick to term life insurance - much cheaper. Do you have any children? Most people your age do. Have you ever heard of FAFSA - it's the financial adi application for college. Google Expected Family Contribution for the FAFSA calculator. You will see that all the money in taxable savings will be calculated in the formula. This means that if you have cash put away in your savings, checking, and brokerage accounts, you will get less grants and loans. Trick to solve this. Pay off any credit card debt, car loans, and even your mortgage. The FAFSA does take thesse into their formulas. There are seminars that charge 2,000 for this simple information - take it to heart. How to get your kid into college practically free. Also if you investing scares you paying off your mortgage is a great way to earn an easy 6% interest. You'll kiss the tax deduction good bye - but realize that 11K is the standard deduction - and thats free. Instead of annuities - I would rather see anyone investing in long term (20 or 30 year) cds that pay out monthly. It's free and the income comes directly to you if you set it up. Contact Charles Schwab or Fidelity Investments for this. They won't scam you like financial advisors will. Remember financial advisors have families to feed - they make their money from YOU. /
2. You do not have to sign up for Social Security until 3 - 6 months before you plan to retire. If you take statements from your other retirement plans to the Social Security office near you,they can help you assess your retirement. Call to set up an appointment first.
3. Your 401k: are you putting the max into it that the company is matching? This is your best option. Next is the ROTH. I would advise you both to put the max which is $5000 into a ROTH for each of you. WHY? Because you will never have to pay taxes on those funds when you decide to pull them out---after 59 1/2 of course. The traditional is third in ranking, simply because as you draw it down, you are taxed on each dollar you take out. However, if you draw it down last, you will probably in a low tax bracket. After fully funding these three, okay, I like a diversified mutual fund, but only in funds paying a very good 10--year average. By this I mean 8%-12% or better. You have to look, but they are out there. I hate annuities as the previous person said and reasoned. DO NOT, DO NOT, DO NOT ever buy whole life insurance. It is a RIP OFF!!!. Instead buy straight TERM insurance, much cheaper, and the money doesn't disappear as with whole life. As for taking your/wife benefits, consider this: If you are comfortable living off pension, 401k, the mutual fund, and the Traditional Fund, consider both of you waiting until 70. Because at 62 she gets the minimum. At 66 or 67 you get your full amount, but if you both wait until you reach 70, you both will get 8% more for each year you wait until 70. In my case four years is 32%, you will have to check yours. Finally, although I admit not knowing much about this, my two advisers say at 59 we need to look into long care health plans, in case you go into a rest home. That can easily eat up your savings/retirement ultra fast. The best thing you can do before retirement is becoming debt free. That means pay off all credit cards, loans, and mortgages.
4. Wow, what you have right now is so much i am surprised you need any help. So, as of now it seems you are going in the right direction as you have quite a lot of money saved up and even more coming in. As long as you keep it this way and don't go away from the path you are on your will do great. I'm surprised you invested so much, as most people don't do this much, good for you. Thanks