Not very specific advice, but just decide that you have a good enough residence and a good enough car, so you can now contribute more to your retirement savings. Consumer Reports monthly magazine has one annual issue fully focused on reliable vehicles, and note how that would help you to purchase one of their recommended vehicles used, when you next need a car. Let your co-workers buy new cars that quickly lose noticeable value in the first few years.
Now you know about IRAs having a single combined annual contribution limit on the future tax exempt Roth IRA (RIRA) and the age-based delayed tax on the traditional IRA (tIRA). The Roth IRA will be the better long term investment if you can afford to fill it full each year with mostly stock index funds. Do read about the severe angst of experiencing stock market crashes that will destroy years of your contributions in your RIRA, followed by the slow recovery that will eventually outgrow the minuscule growth of your bond funds stored in your tIRA. Note how immediately after those stock market crashes, the stock index funds have sale prices on their shares, but you have to have fortitude and patience to buy more shares just after their prices have fallen. Steady, automatic purchases would help with that.
Where I worked, we had some partial cost-of-living pay increases that I just pushed into retirement savings. Later my joke was "I'm living in the 1980s" since that was when my used car and my mortgage were both new.
Yes, save all you can, to invest, but try to avoid striving for more growth in those investments. That greed will lead to making bad choices on where to invest. Stick with broad stock index funds, slightly buffered with a small fraction of bond index funds.
Now you know about IRAs having a single combined annual contribution limit on the future tax exempt Roth IRA (RIRA) and the age-based delayed tax on the traditional IRA (tIRA). The Roth IRA will be the better long term investment if you can afford to fill it full each year with mostly stock index funds. Do read about the severe angst of experiencing stock market crashes that will destroy years of your contributions in your RIRA, followed by the slow recovery that will eventually outgrow the minuscule growth of your bond funds stored in your tIRA. Note how immediately after those stock market crashes, the stock index funds have sale prices on their shares, but you have to have fortitude and patience to buy more shares just after their prices have fallen. Steady, automatic purchases would help with that.
Where I worked, we had some partial cost-of-living pay increases that I just pushed into retirement savings. Later my joke was "I'm living in the 1980s" since that was when my used car and my mortgage were both new.
Yes, save all you can, to invest, but try to avoid striving for more growth in those investments. That greed will lead to making bad choices on where to invest. Stick with broad stock index funds, slightly buffered with a small fraction of bond index funds.
Statistics: Posted by heyyou — Fri Apr 12, 2024 12:26 am — Replies 19 — Views 1172