32yr , Married 13 yrs.
happy family of 5 with baby 4 on the way , recovering from a failed business (covid / inflation crushed brick and motor ). Tradesman “Barber”
No life insurance or retirement set in motion.
It’s never too late ,
Any insight on where to start. Thanks !!
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You’re starting late, so start putting 15-20% of your gross income into tax advantaged retirement accounts, most likely starting by maxing out a Roth IRA and then putting the rest into a traditional IRA. You may have to do some math with the Roth to figure out what the gross pay value of the after tax Roth contribution is. If your employer offers a match to a 401k of any kind, take that first, whatever it is. Set the investment mix to whatever the high growth fund is, like the further away target retirement date or the one called “aggressive growth”
Buy only term life insurance, nothing else. Basically, buy enough so that your family would be provided for sufficiently if you were to kick it. A couple year’s salary isn’t a bad start, but it depends on your current assets. You’d want to work with your wife and consider your existing savings to determine how much is needed. A you with $200k in the bank needs less than you with $200 in the bank.
At your age that shouldn’t be too expensive. For term, I’d probably look at 15-20 years to get all your kids out of the house, but again that’s up to you.
This seems like a question for a financial professional. I worry most of the responses you get here will involve crypto-currency somehow.
I work in insurance and estate planning. DM me.
Barbers in big cities make very good money. More than enough to support 4 kids. A great instagram portfolio helps tremendously and hooking up with an upscale barbershop charging premium prices for haircuts seems the way to go.
Too many lives involved to not have life insurance. Best time to start is now. Your spouse should also have coverage. Hopefully you don’t smoke.
Get term life insurance. Whole life insurance is a scam. Your term should be about 20 years (enough to get your kids to college/out of the house status if you died tomorrow). I go through Thrivent but really anywhere that does term life insurance will do. A common rule of thumb is to buy a policy worth 10 times your annual income, but this can be adjusted based on individual circumstances like dependents and debts.
For retirement make sure you’re putting enough into your 401K to get your company’s match. Talk to your HR Department. Next stick at least 5% or however much you can into a Roth IRA age-based retirement account through Vanguard. Raise this by 1-2% every year until you’re maxing it out each year. Vanguard offers low cost maintenance and won’t charge you an arm and a leg like most financial “advisors” do. If you’re paying someone 1-2% of your total assets managed i.e. a financial advisor, you’ll end up paying hundreds of thousands of dollars. Age based retirement accounts automatically adjust their composition of stocks and bonds based on years until retirement and are usually invested in a wide variety of assets that follow the S&P 500. Don’t invest retirement into individual companies or try to pick winners and losers because that shit is gambling.
For more information visit r/personalfinance and
r/bogleheads
Max your employer match in your 401k first, then save in your IRA unless you think you’ll make way more in the future. If so, then you should max your Roth IRA first and build that up before you’re phased out of it.
Are you healthy? 30 year term. It’s as simple as that. Not healthy? Then maybe a 15 or 20 year terms. UL and Whole life are for estate planning, which is not an issue for you at 32.
Easy. You work until you die
I’d join f3nation and find some free local support.
When you can contribute 12% to a 401k or Roth IRA. If you can’t do 12 do 6, if you can’t do 6 do 3% of your income.
If you can’t do 12% you shouldn’t be drinking or smoking if you do.
1# get life insurance with that many dependents you are incredibly irresponsible with that
2# open an ira
> No life insurance or retirement set in motion. It’s never too late , Any insight on where to start. Thanks !!
If you have income, put away whatever you can stomach without reducing your current quality of life much for a year.
Then do a rough projection using any retirement calculator with that as your annual contribution and see if you hit a number that you if you spent 4% a year of the total, you’d be OK in retirement.
If its not hitting that number, try to figure out how much more you need.
Beyond these guidelines, your options are really a fee-only adviser but I don’t know if they’ll take clients with less than $100k in assets simply because their fee for financial planning ( a properly certified one that isn’t a salesperson ) is generally $1k for an annual financial strategy / planning / etc. for a couple meetings and the paperwork. So the ethical ones tend not to want to charge people who aren’t already saving enough for their services to be directly useful.
https://www.investopedia.com/articles/investing/102014/feeonly-financial-advisers-what-you-need-know.asp
I don’t really want to link you to an exact page but I just looked at a random one in my area (MCOL):
$300/hour for ad hoc work
$1200 for an annual action plan for retirement, household budgeting, etc. to reach your financial goals.