Hi Money Minder,
I’m a school-based SLP in a bit of a financial pickle. I’m on Medicaid, no benefits or health insurance, two kiddos, and zero pension plan at 28. My colleague mentioned an IRA Roth fund to start saving for retirement. Can you break it down for me? How does it work exactly?
And oh boy, no life insurance either. How much should I tuck away for that safety net?
Also, any recommendations for a solid high-yield savings account? I’ve got some wedding cash just sitting there, would love to see it grow!
Thanks a bunch!
Savvy Saver
Response from THE MONEY MINDER:
Hello There,
I understand your concerns about setting aside money for your pension, not having life insurance, and wanting to make the most of your savings. First and foremost, it’s commendable that you are thinking proactively about your financial future, especially considering your circumstances. Regarding the IRA Roth fund, it is a retirement savings account that offers tax-free growth on your investments. Contributions to a Roth IRA are made with after-tax dollars, meaning you won’t be taxed when you withdraw the money in retirement. It’s a great option for individuals looking to save for retirement without the need for a traditional employer-sponsored pension plan.
As for life insurance, it’s essential to have coverage to protect your family in the event of unforeseen circumstances. The amount you need to set aside for life insurance can vary depending on factors such as your income, debt, and dependents. A general rule of thumb is to aim for coverage that is roughly 10-15 times your income. You may want to consider speaking with a financial advisor to assess your specific needs and find a policy that fits your budget.
In terms of a high-yield savings account, it’s a good idea to make your money work for you. Look for accounts that offer competitive interest rates and are FDIC-insured for added security. This way, you can earn more on your savings compared to a traditional savings account. Make sure to do your research and compare different options to find the best fit for your financial goals.
Remember, taking small steps towards financial security now can have a significant impact later on. It’s great that you are thinking about these important aspects of your financial well-being. All the best from THE MONEY MINDER and congratulations on taking the initiative to plan for your future.
