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#1 of 16 Old 10-27-2007, 07:30 PM - Thread Starter
 
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saving for retirement for SAHMs?


My DP has recently found that he likes ramsey's style and listens to his show on the radio. Last night, we were talking about upping DP's 401k contribution and padding the emergency fund a bit. I asked what about me? what do I do for retirement? DP didn't have an answer.

I have this feeling that even though I don't have any income, we should be putting into a roth. Common sense says that even though I'm not bringing anything in now, I'll still need money to live on when we're retired, I'm only 25, DP is 34, he needs to be saving much more aggressively than I do, but I'm still going to need retirement savings.

anyone have any idea what Ramsey says about it?

and what books should we look for by him?


ETA: vital info - we are common law married, have an affidavit of common law marriage back from when it was still recognized in TX, and file taxes as married, so we are married. I'm so used to using DP instead of DH that I didn't even think to use DH.
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#2 of 16 Old 10-27-2007, 10:25 PM
 
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I don't listen to or read DR but I agree w/ you that you should have some sort of retirement. I will probably go back to work eventually and I will then hopefully bank all my salary for retirement and then other joint financial goals, but until then I still put about 2K a yr in "my" IRA. Since I write all the checks and balance the budget it gets done. I feel like I'm working now so I pay myself what I can, y/k? What freaks me out is all the years of SS earnings I'm missing--I'm one of those optimists who think it will still be around, lol.
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#3 of 16 Old 10-27-2007, 10:28 PM
 
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If you can, I would be maxing out either a Roth or traditional IRA in your name. You'll need to research which type of IRA makes the most sense in your situation.
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#4 of 16 Old 10-27-2007, 10:30 PM
 
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I don't really follow Dave Ramsey, but you can do a spousal IRA. And you should-a Roth IRA is such an excellent deal. I'm currently reading Women and Money by Suze Orman and she talks does address SAHMs in her book. I don't agree with everything she says (or everything Dave Ramsey says), but might be a book to add to your library list.

A supportive military wife and mama to my busy boy and sweet girl.
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#5 of 16 Old 10-27-2007, 10:37 PM
 
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Quote:
Originally Posted by ChattyCat View Post
If you can, I would be maxing out either a Roth or traditional IRA in your name. You'll need to research which type of IRA makes the most sense in your situation.
:
For 2007 you can contribute $4000 to an IRA in your name, and for 2008 the contribution limit will increase to $5000. I put the maximum each year into a traditional IRA since in our case it is fully deductible (and we are in a high enough tax bracket that the tax savings are helpful), but for many people a Roth is a better choice, so you should look into the differences for yourself.
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#6 of 16 Old 10-28-2007, 12:51 AM
 
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No figure/guru/celebrity/personality is the be-all and end-all. So listen to others besides DR. I've found there are many holes in DR's plan--his mindset is that everyone can and should be rich and will be if they work hard enough and are diligent enough. I, for one, don't believe that. There's more to having money than managing it well, though of course, you won't keep it if you let it fly out the window. I'm not making myself clear... : But branch out and see what others have to say.
I agree with the PP's about some kind of IRA in your name, too.
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#7 of 16 Old 10-28-2007, 02:07 AM - Thread Starter
 
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Thanks ya'll, that's what I figured. I've got financial planning for dummies on my night stand, but with everything else going on it's on the back burner.
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#8 of 16 Old 10-28-2007, 01:15 PM
 
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I think you should read all the financial planning books you can, but IME you can overthink it and not do anything! I'm still waiting for the perfect investment for a wad of cash I have sitting in CDs :. For my IRA, I just thought and thought and thought about it and then finally just went to Vanguard and opened a mutual fund based on the 500. Vanguard has low fees, lots of available research and you can do it all online at your convenience.
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#9 of 16 Old 10-28-2007, 01:26 PM
 
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I contribute the max to a Roth IRA. I also have an old 403b from when I worked and it is doing pretty well even though I haven't added to it in 3 years. I do everything through Vanguard. Their website has some very helpful tools, including one that helps you decide which IRA is for you.
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#10 of 16 Old 10-28-2007, 08:40 PM
 
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To be brutally honest, and I will probably be flamed for this, but I really wouldn't worry about it too much. If you guys plan to be married upon retirement, I assume the 401k is likely to be treated as "family" money. However, even if you split, Texas is a community property state, so.... It's likely his 401k will be divided evenly between you both (all that has been acquired since marriage, anyhow) if you do split, you won't be left penniless.

As far as planning for retirement, do you or your DH plan on retiring early? Here's why I ask - My DH and I have a similar age difference (8 years), and we plan on retiring early. I WOH (and am another TX NMY, wow we seem to be similar! ), and we both have 401ks - but we do put substantially more in his 401k than mine. If the money is in a 401k for him, it can be accessed penalty-free when he is 59 1/2, meaning when I am 51 1/2 (If we had most of our retirement money in my 401k - which is possible since I earn more than DH - we couldn't access the bulk of it penalty-free until I am 59 1/2 - no thanks, I'll retire 8 yrs earlier and put more in DH's 401k now, thanks!) The rest of the capital and earnings in my own 401k can grow until I am 59 1/2, or when my DH is 67 1/2 - and hopefully we will never have to access mine and can live off of "his". Basically, we're not too concerned about how much is in whose name, because if we stay married until we retire (which we plan to!! ), we will be in an awesome situation with lots of choices. And if we ever divorce for some reason, my own financial situation won't be compromised since TX is a community property state and both of our 401ks will be treated and split equally (we don't have a pre-nup).

Long winded answer, but I really think it's necessary to consider one's whole financial picture along with life goals and situations. It's awesome to even be having these thoughts, though! I know when DH and I started talking about these things, we absolutely were thrilled to have the privilege of talking about the future instead of just worrying about getting out from under our debt. Good luck with whatever you end up doing!
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#11 of 16 Old 10-28-2007, 09:05 PM
 
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I have an IRA in my name (mostly rolled over from my 401k when I worked) but we contribute the max to it each year (only $4K), mostly because it is tax deductible.

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#12 of 16 Old 10-31-2007, 01:16 PM
 
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Everyone gave great advice.

The DR line is that 15% of your household income should be going to retirement - you put as much as your company will match in their plan, and then invest the rest elsewhere.

SO if you are living on one income, you can retire on one income. If you need 2 incomes to live, you need to invest 2 to retire. It doesn't matter who makes what or who doesn't make what, it's all 15% of your household income.

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#13 of 16 Old 10-31-2007, 01:27 PM
 
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I'd agree with what some PPs said - the percent going to retirement is based on household income, and your household expenses will be based on household income. It doesn't matter if only one or two people are earning - the percent of overall income is what matters. I'd recommend that some be put in your name though, it's legally simpler to access later on.

Aven
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#14 of 16 Old 10-31-2007, 03:21 PM
 
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Originally Posted by lisa2976 View Post
The DR line is that 15% of your household income should be going to retirement - you put as much as your company will match in their plan, and then invest the rest elsewhere.
Why not aim to put the max allowable by the IRS ($15,500) before investing elsewhere?

Most company match plans only match up to 6%, so you are missing out a lots of space in tax-deferred plans if you are only funding your 401k to the company match.

I'd much rather have my funds grown in tax-deferred plans than in a taxable account.

I don't know much about Dave Ramsey so I am just wondering why he would not advocate maxing out the 401k to the full IRS limit.
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#15 of 16 Old 10-31-2007, 05:56 PM
 
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Oops yah, he probably says that, sorry. He says to take full advantage of the match if you can.

My dh can put away 10% at work, and then has to go elsewhere. He gets a 3% match, which stinks, but is better than nothing.

Lisa, mama to Lauren, Elliot, angel Marion, and baby due in the fall.
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#16 of 16 Old 10-31-2007, 07:22 PM
 
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He says put it in the 401(k) up to the match, then max out Roth IRAs (both for the breadwinner AND spousal), then go back and max out the 401(k), and then finally go to other investments.

I don't remember the exact logic behind this order, but I definitely remember that is the order he thinks it should be done in.
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