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  • Somewhat overwhelmed by the amount of information

    hello all,

    I found the podcast first and then the block. I am waiting for my WCI book to arrive but I am just so excited and impatient. I do have a few questions.

    I am very blessed to have wonderful family and I am currently an intern with no student loans, car, or mortgage debt. I am married with no kids and we are currently renting in a relatively high price area.

    we make roughly 80K together before taxes. on our joint account we have saved 12K, 10 of which is currently in a CD at 1.75% maturing in 6 months. we save roughly $500 per month together.

    I do have a 401K where my employer matches 3%, so I am contributing into that.

    The one thing I guess we are saving for is a good down payment for a home after residency. however, I am taking the advice of Dr. Jim and will wait about an year in my attending job to buy, giving me roughly 5-6 years until I am ready to buy a home. Currently, is there a need to make my life more complex and get into starting a portfolio or should I just keep it as is until I am finished with residency and have attending income to play with?

  • #2
    You are on the right track.

    1) 401k to match
    2) Roth - yours plus spousal (use some of your current savings to fund this year - before April)

    Guessing that's all you'll be able to do for now. You're in a golden position without student loans as long as you don't do anything dumb.

    Comment


    • #3
      Get that money out of the CD and contribute to the Roth for 2019 for you both. Then put the rest into emergency fund and Roth for 2020. Rinse and repeat for 2021. With the money you’ll have in your 401k and Roth IRAs by the time you leave training you’ll be ahead of the vast majority of the pack. Head down. Keep trucking.

      Comment


      • #4
        I would put your emergency fund in a high yield savings account, so you have better access to it, after this CD matures.
        I would be doing Roth IRAs for both you and your spouse.
        If your employer has a Roth 401K option, I would do that too.
        What is your rent/month? Is that were your money is going? Since you have no other payments....

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        • #5
          Are you sure you get a match?
          get that. Then Max rIRA.
          Rest to savings.

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          • #6
            See if Roth option for 401k.
            get match.
            Roth IRA and spouse
            HSA available?

            With no loans you gave won this game already. Just don't screw up and start thinking about which charities you want to donate your future estate to.

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            • #7
              Originally posted by ENT Doc View Post
              Get that money out of the CD and contribute to the Roth for 2019 for you both. Then put the rest into emergency fund and Roth for 2020. Rinse and repeat for 2021. With the money you’ll have in your 401k and Roth IRAs by the time you leave training you’ll be ahead of the vast majority of the pack. Head down. Keep trucking.

              Dang. I took my family’s advice and just opened a CD. It will mature on June. Is the penalty for withdrawing worth it to max the contribution to Roth?

              Comment


              • ENT Doc
                ENT Doc commented
                Editing a comment
                Likely yes. You can’t contribute after tax filing Apr 2020 for tax year 2019.

            • #8
              Originally posted by psycho305 View Post


              Dang. I took my family’s advice and just opened a CD. It will mature on June. Is the penalty for withdrawing worth it to max the contribution to Roth?
              Can you save up 12K by April 15th 2020? That would be your 2019 contribution. You then have until April 2021 for your 2020 contribution. Buckle down and get as much as you can into those Roth's before April.

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              • #9
                While your family meant well use this as a valuable lesson to realize there's a whole world out there to learn about

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                • #10
                  Check what the penalty us if you cannot save up enough and you have to tap the CD. It might be only a couple hundred bucks.
                  throw in some charm and you might get the fee waved or reduced. Worse case they say no.

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                  • #11
                    Typically, at many banks the penalty for early CD withdrawal is quite modest. So check with your bank. On a shorter term CD, you might only lose a couple weeks of interest. I would think that the long term benefits of funding the roth account would far outweigh the minor CD penalty.

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                    • #12
                      You are really doing great. Whatever you decide about the CD remember that you are young and have plenty of time.

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                      • #13
                        If you offer to start your Roth with the bank, they may let you transfer $12k into a Roth there and then you can move it out to VG or another custodian in June. Leaving the $$ in a high-interest savings account for 6 mos or so will not hurt. Just see what you can negotiate with them.
                        Welcome to the forum - you are way ahead of the game to find WCI at this point in your career!
                        Financial planning, investment management and CPA services for medical professionals | 270-247-6087

                        Comment


                        • #14
                          Thank you so much for the help everyone.



                          It feels so bad to say it here but saving for retirement seems so ...... meh. I guess I should be glad I have this silver spoon and there isn’t debt I need to be paying off right away. Knock on wood I’m physically and mentally able to do so, but I love my career and want to keep going well past 65. But I’m starting to see long (way way long) term picture is more important.

                          Comment


                          • White.Beard.Doc
                            White.Beard.Doc commented
                            Editing a comment
                            You are just starting out, so good habits are important. Make small, daily, good financial decisions repeatedly over time; it makes all of the difference down the road.

                            1) Live within your means.
                            2) Save and invest something every month for the future, and put this on autopilot if possible.
                            3) Balance enjoying a portion of your money now with putting some away for the future.

                            After accumulating some years of making small, frequent, good financial decisions, you have the potential to become very wealthy and secure.
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