All these budgets made me start thinking....

[LexTysMommy]

I am 28. Single. Self Employed. No debt but house(14 years left at 5/75%). Small EF ($5K)

I have no idea where to start on retirement. Have nothing started. Who do I talk to? where can I get good info ( written in language I will understand ) and how much should I put every month/week/year to make it worth it?

OR should I plug into the house and savings before I do this?

any and all info is appreciated. Thanks.

[Greebo]

I am 28. Single. Self Employed. No debt but house(14 years left at 5/75%). Small EF ($5K)

I have no idea where to start on retirement. Have nothing started. Who do I talk to? where can I get good info ( written in language I will understand ) and how much should I put every month/week/year to make it worth it?

OR should I plug into the house and savings before I do this?

any and all info is appreciated. Thanks.

With no debt but the house, its a good time to send your money in a few directions.

First of all - at 28 you should be investing at least 15% in your future. Since you are self employed, your first venue of investment should be a good Roth IRA. Roth IRAs are post-tax investments which grow tax free, so when you retire, any money in the roth can be removed without any taxes. You can currently put up to 5,000 per year in a Roth.

After that, if you aren't at 15% yet, a standard IRA is an option. Being self employed, however, you need more professional advice.

Go to here, fill that out, and talk to a professional about investing that's got the heart of a teacher. DO NOTHING until you feel you fully understand your options. The advisor you want is the one who will take time to teach, not just sell.

You should also be putting money into your EF to cover at least 6 months expenses. Being self employed, I'd go for a year.

Finally, pay off the house fast. After investments and extra EF buildup, put as much onto the house as you can. Your home is your security for later in life. Its a lot easier to keep a home w/ no mortgage than a home with one.

[Wendy99]

Just wondering in my situation I am only able to save 7.2% for my EF right now should i continue to build my EF to $5,000.00 then start retirement planning? Just now sure what to do either ... I'm glad this question was asked ... I wouldn't be able to contribute 15% for sure.

[Greebo]

Just wondering in my situation I am only able to save 7.2% for my EF right now should i continue to build my EF to $5,000.00 then start retirement planning? Just now sure what to do either ... I'm glad this question was asked ... I wouldn't be able to contribute 15% for sure.

I think yes, if you are debt free except for (or including) the house, you should absolutely build the emergency fund up as FAST as possible. A $1000 emergency fund is very little protection - once the debt is gone, you need a LOT of protection to carry you through the rough times you will go through at some point or another.

Also, if you invest now w/o a FFEF, and trouble comes and you don't have the FFEF, you will NOT want to cash in retirement savings both for tax reasons (in the US anyway) and because its very hard to emotionally accept selling off investments for emergencies when debt is so much easier to get into.

So build up the ffef as fast as you can, THEN get your retirement savings up, and only then if you have retirement savings at15% or more, start putting extra to the house.

[tkn4lif]

Just wondering in my situation I am only able to save 7.2% for my EF right now should i continue to build my EF to $5,000.00 then start retirement planning? Just now sure what to do either ... I'm glad this question was asked ... I wouldn't be able to contribute 15% for sure.

Me too. I know I cannot contribute 15% right now. I am strapped with credit card debt that I am trying to get out of. I have started to build an Emergency Fund. My goal is $18,000. Thats 4 months salary for both the DH and I.

[Greebo]

Me too. I know I cannot contribute 15% right now. I am strapped with credit card debt that I am trying to get out of. I have started to build an Emergency Fund. My goal is $18,000. Thats 4 months salary for both the DH and I.

I strongly encourage you to review the Dave Ramsey plan. Saving up $18,000 when you have nearly twice that in consumer debt (and yes, A CAR counts!) is putting the cart before the horse.

Put together a small emergency fund - baby emergency fund - BEF - of $1,000 - just to stave off Murphy when he comes knocking with smaller problems.

Then kill those debts.

THEN build up the fully funded emergency fund.

IF you had no debt payments but the house, how much would you need saved up to survive 6 months with no income?

[itlw8]

If I remember right you also do childcare like me.... I would do all those things at the same time...

You need an emergency fund for when the income is down. You and I both know it runs in cycles.

Have you read the articles on www.redleafinstitute.org by Tom Copland ? there are some good ones on planning for retirement.

and if you haven't already review the other ones on taxes and record keeping.

seems I remember something about a SEP or something like that if you are selfemployed.

compound interest is the reason you need to start a retirement fund NOW... I chose a mutual fund and have some money take out monthly actually I have increased mine to 2x a month this summer I can always change that when I have a dry spell if needed.

remember doing something is better than doing nothing.