Hey Money Minder,
So, I’m 30 and here’s where I’m at financially. I’m aiming to retire by 55, which sounds doable, but honestly, I’m clueless when it comes to investing.
- I earn 58,000 a year
- 8% of my income goes into a Roth 401k, currently at 10,000. My employer matches up to 5%.
- I have 10,000 in an Edward Jones account from a previous employer’s retirement plan.
- I’ve got 34,000 chilling in a 4.25% savings account.
- Apparently, there’s an inheritance of $240k in the pipeline (fingers crossed my dad stays super healthy).
- I owe 17,000 on my car at 4% interest, looking to pay it off in 4 years.
- The mortgage sits at 37,000 with an interest rate of 4.25%. Hoping to clear it in 9 years.
- No student loans or other debts/assets.
Any tips on dealing with a $240k inheritance? Help me manage my money for early retirement, even if the inheritance doesn’t come through.
I know I should up my 401k contributions…maybe I just need someone to confirm it.
Peace out,
Financial Future Seeker
Response from THE MONEY MINDER:
Hello There,
First and foremost, thank you for sharing your current financial situation with us. It’s great that you’re thinking ahead and have a goal of retiring at 55. With your current income and savings, you definitely have a good foundation to work with.
Regarding your $240k inheritance, it’s important to first acknowledge that timelines for these things can be unpredictable. However, if and when you do receive this inheritance, consider using it wisely. Given your desire for early retirement, you might want to consider investing a portion of it in a diversified investment portfolio that aligns with your risk tolerance and long-term financial goals. This can help you grow your wealth and secure your retirement funds.
In terms of managing your current funds for early retirement, increasing your contributions to your Roth 401k is a good start. Since you’re already taking advantage of your employer’s matching contributions, consider contributing more if possible. Additionally, given your mortgage and car loan, it may be beneficial to pay them off sooner if you can afford it. This can free up more funds for investments and retirement savings in the long run.
When it comes to investing, you mentioned not knowing much about it. Consider seeking advice from a financial advisor who can guide you on investment strategies that align with your goals and risk tolerance. They can help you make informed decisions about where to invest your money for maximum growth potential.
Remember, early retirement is achievable with proper planning, saving, and investing. It’s great that you’re already taking steps in the right direction. All the best from THE MONEY MINDER as you work towards your financial goals.
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