How can a schoolteacher dad and stay-at-home mom send their four kids to college? Where should a 23-year-old keep the savings that she’s accumulating to buy a home by the time she’s 27 or 28?
What should a listener know about retirement planning if he has a pension? And should a listener rollover his 401k from my his former employer?
Former financial planner Joe Saul-Sehy and I tackle these four questions in this week’s episode. Here are the details.
When I hear friends and coworkers talking about college tuition for their kids, all I can think about is how in the world am I going to send my four kids to college? I think I have a plan – I’d love to hear your opinion.
From what I hear, college can be between $20,000 to $50,000 per year.
I currently own two houses – one is a rental and one is our personal residence. We’re working on paying those mortgages down in about 7 years. I want my kids to get their basic courses from a community college to save some money, but for the rest I really think that taking a loan will be the best option. Usually these loans don’t have to be paid until they graduate, so I feel like that will give me some more time to become more financially stable.
If I get to pay those mortgages in the time that I’m thinking, I’d like to buy a couple more rentals. I’m currently halfway to max out my contribution for my 403(b) plan. I’m a teacher, I’m making about 91k per year and my wife stays home. I would love to hear your opinion on my plan. I feel like if I had that kind of cash – $20-$50k a year – I would rather invest it and help my kids down the road.
I am 23 and I’m saving to buy a primary residence in 4-5 years. In the meantime, I’m wondering where to invest my money so that it will grow but won’t be too susceptible to market fluctuations since I’ll be needing the cash relatively quickly.
You’ve written before that if we contribute 10% of our salary towards retirement and our employer matches 5% automatically, we are saving 15% for our retirement.
My question is, does the same principle apply to pensions? For instance, if I’m contributing 5% of my salary towards my pension and my employer is contributing 9 to 10%, making it around a 15% contribution overall, should that then count as a 15% retirement savings?
I have a question about a 401(k) rollover. I recently switched employers and so far I’m very happy with the transition. With my new compensation, I’m now able to more than double my 401(k) contributions, and I’m on track to max out my new HSA while still maintaining the same take-home pay from my old job.
My old employer had a 401(k) through Merrill Lynch and I was able to do a mix of contributions to both Roth and Traditional. My new 401(k) through Charles Schwab has this option. According to the documentation I’ve received from Merrill Lynch, I have four options at my disposal:
- Keep assets where they are
- Roll them into some kind of IRA
- Transfer them into a new 401(k)
- Take a cash distribution
With this in mind, here are my questions:
- Aside from the four options presented to me, are there any other options I should consider?
- Are there any time constraints I should consider for this kind of roll over?
- What would you recommend I do with these funds? I’ve heard you repeatedly mention the benefit of having all of my assets under one dashboard, so I am leaning towards transferring the assets into my new 401(k). I currently do not have an IRA, and I’ve been meaning to get one set up for a while. This seems like a great opportunity to get one up and running as an alternative strategy.
- Fantastic rebuttal from Clark Howard to Suze Orman’s remark that you need at least $10 million to retire early. Listen here, starting at the 19 min, 04 sec mark.
Okay, remember how we’ve been running a fundraising campaign to sponsor a water project through charity:water?
If you need a refresher (no pun intended), here it is: about one year ago, I interviewed Scott Harrison on this podcast. He’s the founder of a nonprofit that brings clean drinking water to communities in which people, especially children, are getting sick and dying from water-borne diseases.
His mission is to live in a world in which nobody gets sick from the water they drink.
And my contribution to that goal, I announced, is that I want to invite the Afford Anything community to sponsor a water project, a specific, tangible, GPS-identifiable project like digging a well that can bring clean water to hundreds of people.
We’ve been selling t-shirts, and we give 100 percent of net profits ($5.38 per shirt) to our charity:water campaign.
Up to this point, we’ve raised $4,330.
Last week, IT GOT REAL.
A generous FIRE member of our community, Richard Potter, has offered to MATCH contributions for the next three months (October through December), up to a maximum of $4,000.
This means that:
- If we raise $4,000 in donations …
- Richard will donate another $4,000 …
- And added to the $4,000 we’ve already raised …
WE’LL HIT OUR GOAL!!!!!
And the Afford Anything community will have created a tangible, specific water project! We will have brought clean drinking water to a community!
So if you’d like to double your dollars, please give to our clean water campaign!
Donate here: https://affordanything.com/water
Every $1 you give will automatically turn into $2! If that’s not an amazing ROI, then what is?!
Thank you to everyone who’s donated or purchased a shirt. Let’s come together to create massive good in the world!
P.S. Hey, I almost forgot!! Remember how I joked about giving away free ringtones? Well … they’re here! Download them here:
P.P.S. Want a transcript of the Suze Orman interview? Download it for free here:
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