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PSA: Don't forget to invest!

Nurses Article   (5,138 Views 21 Replies 693 Words)

ThePrincessBride has 4 years experience as a BSN and specializes in Med-Surg, NICU.

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Americans are facing a crisis: They are not saving enough for retirement. Don't become a part of the crowd! Invest in your future. You are reading page 2 of PSA: Don't forget to invest!. If you want to start from the beginning Go to First Page.

Are you saving for retirement?

  1. 1. Are you saving for retirement?

    • I am using real estate/other income streams for retirement
      2
    • I am saving for retirement, but not "enough"
      9
    • I am right on track
      9
    • I am ahead of the pack
      15
    • I will die working
      2

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ThePrincessBride has 4 years experience as a BSN and specializes in Med-Surg, NICU.

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Thanks for the replies, everyone!

I wish I had more space in the article to explain more ways to save. Yes, absolutely save in your HSA and FSA folks! HSAs (Health savings accounts) are great as the money is never taxed IF it is used for healthcare-related expenses and they roll over from year to year. FSAs (flexible spending accounts) are similar in that they are free of taxes but they have lower contribution maximums and don't roll over...you use it or lose it.

Also, I agree that even if your employer doesn't offer a match, it is still important to contribute as much as possible to a pre-tax retirement account as it lowers one's tax liability and allows the money to continue to grow in a tax-sheltered "bucket." The ONLY time I would be hesitant to contribute to a 401k/403b is if the funds offered have outrageous loading fees and expense ratios that will end up costing you more money than a taxable account.

OCNRN63, some employers have an automated annual increase program in which you can have your paychecks automatically increase the percent that goes to a retirement fund (ex. 1% per year starting on January 1st). A nice set-in-and-forget-it way to continue to ramp up retirement savings without any effort.

LadyFree28: Absolutely! One should invest in (government) bonds for some stability, but in order for a portfolio to grow and prevent its owner from outliving his/her funds, investing in stocks is imperative. Bond interest rates are extremely low and may not keep up with the rate of inflation, whereas certain stock index funds have on average, after adjusting for inflation, returned about 7-8%. I understand a lot of people are afraid of stocks, and I was too, but investing in the market should be seen as a long term gain. People close to retirement who lost so much were invested too heavily in the market when they should have been much more conservative with their funds (including a couple of years' worth of expenses in savings).

Some conservative financially gurus say have your age in bonds. A 25-year old should have 25% in bonds, 75% in stocks. Others are more aggressive and say have your age-10 years in bonds. So a more aggressive portfolio for a 25-year old will have 15% in bonds. I, on the other hand, am well over 90% in stocks, but I will gradually become more conservative.

For those of you who may think this is overwhelming, there are some great funds called "Target funds" where you can pick the fund closest to your desired retirement year and the fund will automatically start more aggressive and then become more conservative as you get closer to exiting the workforce.

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TheCommuter has 10 years experience as a BSN, RN and specializes in Case mgmt., rehab, (CRRN), LTC & psych.

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As an aside, I have two upper middle-aged parents (ages 58 and 60) who have nothing to retire upon and will depend on social security to get through their golden years.

My mother contributed to a 401k during her working career, but withdrew large sums from it multiple times over the years for financial hardship or to purchase new cars. Thus, she ran out of money about five years ago. On the other hand, my father is a present-oriented man who never saw the advantages of saving for retirement.

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As an aside, I have two upper middle-aged parents (ages 58 and 60) who have nothing to retire upon and will depend on social security to get through their golden years.

My mother contributed to a 401k during her working career, but withdrew large sums from it multiple times over the years for financial hardship or to purchase new cars. Thus, she ran out of money about five years ago. On the other hand, my father is a present-oriented man who never saw the advantages of saving for retirement.

Yikes, I hope they don't turn to you to bail them out when they find that SS doesn't really give one a comfortable retirement!

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TheCommuter has 10 years experience as a BSN, RN and specializes in Case mgmt., rehab, (CRRN), LTC & psych.

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Yikes, I hope they don't turn to you to bail them out when they find that SS doesn't really give one a comfortable retirement!
I've already bailed them out in the recent past when they were at risk of losing their house. I'm talking about a mid five-figures bailout.

It was a choice between bailing them out, allowing them to become homeless, or having them move in with me. They do not earn enough money to afford rent in the city where they live. I was not emotionally ready for moving them in with me or letting them be homeless, so I spent the money to enable them to keep the house.

It stings to have parents who did not properly prepare for their older years. Did I mention I am the only child?

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whichone'spink has 3 years experience as a BSN, RN.

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I find myself in somewhat of a sticky situation. I have a 401(k) through my place of employment, and I have a previous 403(b) from another place of employment that rolled into an IRA when I left. I also have a roth IRA I started years ago when I was barely out of high school, forced to by my mother. I'm not in a position to save much at the moment, as I'm in school and had to take out loans. Thank God I didn't have debt from my undergraduate degree, because it would be so much worse. I want to pay off student debt first before I can seriously save for retirement. I am thinking of dissolving the roth IRA to pay down some student debt balance. In addition, I have a house and will use whatever I get from the house to pay off more debt balance, once I sell it. I am very thankful my place of employment makes me put a certain amount away in a 401(k). It's all I have until I get rid of the student debt I will have over my head. I do not want any student debt when I approach the age of 50.

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I've already bailed them out in the recent past when they were at risk of losing their house. I'm talking about a mid five-figures bailout.

It was a choice between bailing them out or having them move in with me since they do not earn enough money to afford rent in the city where they live. I was not emotionally ready for moving them in with me, so I spent the money to enable them to keep their house.

It stings to have parents who did not properly prepare for their older years. Did I mention I am the only child?

Well, that sucks. My sympathies. I have a feeling you will be called upon to "help" many more times in the future. And that's not fair.

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Nurse SMS has 8 years experience as a MSN, RN and specializes in Critical Care; Cardiac; Professional Development.

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I fear the changes that are inevitable for SS. I see a future in which those of us who did manage to discipline ourselves to save for our retirement are no longer eligible for SS. There have been murmurs of it becoming a "needs based" system. Having paid into it all my life, that would upset me a great deal.

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I fear the changes that are inevitable for SS. I see a future in which those of us who did manage to discipline ourselves to save for our retirement are no longer eligible for SS. There have been murmurs of it becoming a "needs based" system. Having paid into it all my life, that would upset me a great deal.

I decided a long time ago to just assume I would never see a dime of SS by the time I got to that age, and to just plan accordingly. Not saying it's right (and actually it is completely unfair), but SS has been a shaky proposition for awhile. If I end up with any, nice surprise, but I'm not going to count on it, and DH have invested/saved with that in mind.

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AutumnApple has 12 years experience and specializes in M/S, Pulmonary, Travel, Homecare, Psych..

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I've been saving since I started working at age 22. That's just the way I was raised.

But it shocks me (and angers me a bit) to see some of my co-workers saving so little. They'll be talking at lunch about buying this, and going places, and eating at restaurants, etc. and then talking about not having enough money to pay their bills. Sometimes I want to slap them! I think they expect savers like me to bail them out when they don't have enough money to retire on. That's when I get angry.

Most of my friends would have answered "I'll be working till I die!" on the poll in this thread.

What angers me is how they are critical of those who choose to save for retirement. I've heard all the rationalizations: "Don't you get it, they'll take the money anyway. Another stock market crash, another recession, another bank bail out and all your investing is undone."

I get it. You want to "live now". So be it. I'm cut from a completely different tree is all.

It's not as if they are happy though. Truthfully, their life choices bring them so much chaos and misery. A good example would be with cars. They overspend on a luxury vehicle (one friend got a maxed out Ford truck for her husband who doesn't work lol) while I drive around in a little putt putt gas economy car. I've hardly had to do any repairs to my car, but they have issues with theirs. Problem is, they can't afford the repairs........they are broke making the payments as it is.

For me, saving for the future isn't just about retirement. Being disciplined with your finances leads to better decision making overall. There is much to be learned concerning how to limit your budget yet still be happy. Bargain shopping vs. impulse buying, appreciating what you have vs. looking for the next emotional shopping fix, contentment vs. wondering if this will be the month you can't pay all the bills..............

I just don't see any peace of mind in living paycheck to paycheck just so your SUV has more options than your neighbor's.

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I find myself in somewhat of a sticky situation. I have a 401(k) through my place of employment' date=' and I have a previous 403(b) from another place of employment that rolled into an IRA when I left. I also have a roth IRA I started years ago when I was barely out of high school, forced to by my mother. I'm not in a position to save much at the moment, as I'm in school and had to take out loans. Thank God I didn't have debt from my undergraduate degree, because it would be so much worse. I want to pay off student debt first before I can seriously save for retirement. I am thinking of dissolving the roth IRA to pay down some student debt balance. In addition, I have a house and will use whatever I get from the house to pay off more debt balance, once I sell it. I am very thankful my place of employment makes me put a certain amount away in a 401(k). It's all I have until I get rid of the student debt I will have over my head. I do not want any student debt when I approach the age of 50.[/quote']

Before you make any decisions, you should meet with an certified financial planner (CFP) or a certified public accountant (CPA).

You need to look at what interest rate you are paying on your student loans vs. what kind of growth you can expect in your investments. For example, the stock market has averaged 8% growth over it's history. If your interest rate is less than that, it would be wiser to leave your investments alone and just pay the interest rate on the student loans.

Unfortunately, it isn't that simple. You can deduct up to $2500 in student loan interest a year. That is money you won't be paying income tax on, so that means your student loan is actually costing you less than your interest rate.

You don't pay a penalty on withdrawals for qualified education expenses, but you will pay income tax on any withdrawals exceding your contribution. You need to factor this tax into your decision.

If you do decide to use your Roth IRA for qualified education expenses, you need advice on how to do it to ensure you don't pay a penalty.

Also get advice on selling your house to pay down your debt balance. It might be better to refinance your home or get a home equity loan, since home loans are so low now. Since you can deduct home loan interest, your loan is actually costing you less than whatever interest rate you have.

Get expert help so you look at the big picture rather than just looking at wanting to get rid of that student loan debt. There is good debt and bad debt. Get rid of the bad debt. Keep the good debt.

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Don't forget about using your ...(HSA) to increase your savings.

...

Money put into an HSA does not have to be used within the year. It rolls over year to year.

HSA money can be invested in stocks, bonds, or mutual funds.

...

Starting at age 65, you can take withdrawals from your HSA without penalty. If the withdrawal is for qualified medical expenses, it is tax-free.

For 2017 the max an individual can contribute to an HSA is $3,400. ($4,400 if over 50).

OMG! I'm too healthy to take advantage of an FSA, but I had no idea you can do the above with the HSA. Thank you for this info! (Our benefits presentation truly sucks ass!)

In 2017, I only contributed to my employer's matched amount: invested in 100% Large-cap index, with gains of 19% so far.

My Plan:

-In 2018 Jan, open and max out a Roth IRA, investing with Vanguard in 100% Mid-cap index.

-In 2018 Jan, look into HSA and if it's a go, then max out and invest 100% in Vanguard's Total Market index.

yep, I'm all in low fees index's: I have 15-25 year outlook, and besides, I make most of my income through...work...I invest to beat inflation, really.

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Just checked, no HSA, only HCSA with max carry-over of $500. So no go.

Thanks for the info anyways, Anonymous865.

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