You don’t need a “Qualified” retirement account(s), those just are supposedly “tax advantaged” Most people to retire comfortably (and save for a rainy day) use “nonqualifed” money, be it savings, stocks/mutual funds, collectibles.
You might want to diversify your physical holdings, like coins or other precious metals. If you don’t trust brokerages etc, then it seems your best hope is physical custody, but then you have security issues. Otherwise, look into some diversified mutual funds.
Buy a good safe I guess and don’t tell anyone that you even have a safe. No sense tipping off anyone, even family, that you have other assets. JMHO off the cuff.
When I was in my mid-40s, I started a couple of annuities. One was an IRA and the other was a Mutual Fund.
Hindsight: I wish I had bought stocks for some of the major companies instead of the mutual funds. For MFs, you don’t really see much gain, as you don’t actually own the stocks. Had I, for example, bought Walmart, it has split several times and would be worth much more than the comparable amount invested in mutual funds. Of course, the advantage with mutual funds is that ‘their experts’ do the investing and you supposedly reap the results.
The IRA locked in a guaranteed annual return, which was a joke amount, at the time. General interest rates for bank money markets were around 8%, and the IRA guaranteed a return of 4%. Laughably low at the time. However, since interest has dropped to near zero on regular bank savings and CDs, that 4% looks pretty good now.
==
Stay single.
Seriously, what do you want out of retirement? I'm going to go into it a pauper, a property owning pauper, but cash poor. I do have a wonderful daughter, son-in-law, and grandkids. I'll do ok. I won't travel. Some things will be difficult. But at the end, family will hold my hand as I slip this mortal coil.
So? What do you see yourself doing in retirement?
Thank you for your service, LT.
/johnny
Pay chart shows you’re making about $3,800 a month base pay as an O-2, is that correct?
Learn how to live Amish.
No games, no BS. Get yourself enough silver in case you have a local economy going on, but beyond that put whatever resources you have in achieving the above.
What is coming will make the Great Depression look like a Sunday picnic, and we will all be lucky to live thru it.
depends how much federal income taxes u pay ... if it is a lot ... there is no reason not to fund a qualified plan thru work or max your Deductible IRA contribution. U got til 4-15-14 for 2013.
You'll be saving for your future while at the same time letting Uncle Sam use your money for his important projects.
Goldbug ping.
At you age, if you can put money away pre-tax, into a thrift saving, 401k or 403B type account, it’s definitely worth it, because you are deferring the taxes, and you can still diversify within the accounts.
For regular amounts, putting money into stock type mutual funds is OK, because you average out the market’s ups and downs. Once you would actually have a larger chunk, then you would want to be more careful to diversify your “larger chunk”, but could continue to contribute into a stock mutual fund — don’t go for the high risk, just some “ordinary” stock fund with a decent record.
The world is always on the brink and it always seems it’s in the near horizon, but we never know.
I have known some people who were your age some 30-40 years ago and some did keep putting money away and did accumulate a nice chunk, and also know some who felt as you do and didn’t. Those who did are very well off now. Those who didn’t, not so much, but can’t go back in time...
Especially since you have no debt and are single, this is the time to save as much as you can, and max out your possible pre-tax savings. then if you can, do save after tax also and let this money accumulate and grow for the next 30-40 years.
Are you more worried about the return ON your principle or the return OF your principle? The reason I ask is that If you are concerned about a US bail in, you should consider non traditional investments such as over funding a whole life insurance policy. That would allow you borrow against your policy for mid and major purchases (car bank, etc). The concept is the one presented by bank on yourself. http://www.bankonyourself.com/#sthash.ExoyBe7V.dpuf
Not normally the investment that I would recommend but it is a good defensive strategy against confiscation of wealth.
A more middling strategy would be to invest in hard assets such as land, oil wells, metals, etc. Another option would be to accumulate some wealth and then invest in a business that provides a 10% return but is based on human needs such as food, shelter, etc.
A more aggressive approach would be to have your money into markets with stocks, bonds mutual funds. If you are not a very knowledgeable investor, then stick with index funds.
If you think that the economy is going to flat out collapse, buy a reloading machine, primers, brass and means to produce bullets and start reloading by the thousands. Of course, that would mean that you would have to have a location to secure the materials and the finished product. Great trading material HOWEVER, not a very liquid means of holding on to cash and would require you to have an ATF license to sell to cash out.
Read Dave Ramesy’s books and follow his advice. It’s the most common sense and disciplined method of savings, which is key to wealth creation. Open an IRA and contribute as much as you can. Read what financial experts are suggesting for diversification and follow their strategies, but always maintain a diverse mix of cash, individual stocks, and mutual funds or ETFs. Since no one can predict the future, the name of the game is to not put too many eggs in one basket. You’re a long-term investor, not a day trader, so you’ll have to develop the stomach for ups and downs, and feel confidence in the equity investments you make (i.e. buy blue chip solid performers, not fads or trendy stocks in unproven areas.
Assuming you’ll be managing your own account, get comfortable with reading and following finance trends so you can make adjustments accordingly. Even in a recession, people still drink beer, but once you start following financial trends you might find that buying shares of BUD produces better yields than, say, Wal-Mart.
Still, you’re doing to “lose money” some weeks/months (like now) but you’ll make money onbalance, e.g. the value of your portfolio will grow over time. Even since 2007 the market has grown very significantly because it is, in essence, the best reflection of the strength of America and the resiliency and productivity of it’s people. Good luck!
My advice is to live like you are an E-5. Use the overage to pay any debts first.
Then start a Roth IRA index fund. Then buy physical metals every month, a little at a time. Keep about 2-3 months salary in savings for emergencies.
Then, when you get O-3, start spending a little on yourself.
LT -
Having been there, done that..
1. Find a financial advisor you can trust.
2. Educate yourself on investing. Learn how to evaluate potential investments and their suitability for you
3. Determine your level of comfort with risk.
4. Determine how much time you’re willing to dedicate. Mutual funds may be better if you aren’t inclined/able to evaluate/monitor the investments.
5. Open an IRA (Traditional or Roth).
6. Take advantage of the TSP option (pre-tax deductions lowers the gross income subject to taxes). Didn’t have this when I was at that point in my Active career, but did pretty well with it in my Reserve career.
7. Diversify, diversify, diversify.
8. Focus on hitting singles and doubles rather than swinging for the fences. Boring is good.
9. Avoid myRA’s like the plague. You are obviously capable of determining and selecting investments suitable to your goals.
And thank you for your service!
When I was young, I didn’t participate in company offered stock options, after all I was going to live forever. When I was young I didn’t contribute to my 401K, because, after all I was going to live forever.
Now that I’m old ... what the hell was I thinking!!
You're best bet for retirement is to stay in long enough to become a general in charge of a future force of freedom fighters thereby earning not only a nice monthly subsistence allowance, but respect and acclaim as well.
Btw, I wouldn't wait too long before tying the knot with some little sweet thang so you can start repopulating Michigan. ;)
TSP and VWINX
Buy GUNS ! ! !
All you can afford for as long as you can afford to and hoard them as long as you can them dump ‘em on the yuppies for loads of cash.
For example, a target 2020 fund would now hold lots of bonds. And even more bonds at year 2020 and beyond. But a target 2030 fund would now hold mostly stocks. As you get closer and closer to the year 2030, the fund manager will be automatically selling off the riskier stocks and buying the more conservative bonds.
But as others have said, diversify! Put some money into precious metals, and some money into quality real estate.
But a Roth IRA has enormous tax benefits, especially for a young (under 40) person. Ignore the Roth IRA only if you think that the sky is probably going to fall between now and 2030.
And who knows, maybe the sky just might fall! That's what diversification is all about. But those folks who invested in bomb shelters, and not stocks, in 1970 are kind of hurting financially now.
As your nest egg grows you want to be actively monitoring it, asking questions, asking for advice...One day you will do it all yourself.
As to metals...some advisers think that 10-15% should be in precious metals, gold, silver, platinum. I have always avoided them because they take a lot of time to gain value and not very much time to lose it. I'll leave that up to you, but you can't eat it or spend it and it costs money to store. I personally like the exchange traded ETFs...
The biggest hurdle you have to jump is to get started. The sooner you do that the better and the rest will become evident as you progress..It's not rocket science.
Pay yourself 1st. Every month make sure you put money away for tomorrow. Do NOT expect that you will receive one dime for retirement from anywhere except your own investments. Do not count on the government for retirement or healthcare.
Today’s Congress thinks less of you than Kissinger thought of us Vets. They prove that with their vote. “Military men are dumb, stupid animals to be used as pawns for foreign policy.” — Henry Kissinger
Think about what you want to do when you finish military service. Get all the education you can stand. Learn skills in different fields that are valuable in the civilian world. Look over the horizon for tomorrow’s sunrise and you’ll never be surprised at what happens.
Trust in Jesus to protect you and guide you through life.
Stay safe
Thanks for your service.