November 20, 2009

Maybe My Bunk Mate Can Teach Me the French Braid

I'm nervous about retirement. I know I only have forty years before retirement (holy crap that's a long time!!) but I'm young and I really need to be aggressive here. The problem is, I have no idea what's going on. There are so many financial services commercials that I am terrified by the lingo the not-really animated cartoon people are saying. Annuities? Roth IRA? Traditional IRA? Pre-tax? Penalties? It's all French to me. I try to read about these things so I can wrap my brain around my future financial security but it's really hard. It's dense material and I'm convinced that trying to navigate all this by myself is going to land me in IRS jail. Where unsanitary things happen.

But why now, Katherine? I have a retirement account from my old job that I'm trying to figure out what to do with. I really just want to rollover what's in there and set it up to be aggressive (B E aggressive!). My current job doesn't match retirement contributions so I am on my own to find a company. I asked a friend of mine who knows a little about finance and her best advice was to find someone who will walk me through everything and take care of it. She has a person she really likes working with for her retirement and it seems like his fees are very reasonable. So when she brings in his contact info I'll give him a call.

Besides not going to money jail (it's not a state-run spa for reals), I very much want to do what's best for me and my future family. I don't want to get to retirement and realize I could have prepared better. I just feel more ignorant than prepared. And I really hate that the worst way to save for retirement is to put actual money, that you have actually made, in a regular savings account to accrue interest. Instead, the actual money, that I have actually made, is going to this imaginary place where it very well could disappear. Maybe I won't roll over after all and just start putting money in a jar and bury it in the yard. That feels much more concrete. And safe.


Winstonian said...

Roth IRA might be the way to go. This is post-tax money, so you don't get taxed when you take it out, granted you take it out after age 55 (unless they upped the age requirement). And you don't need to be super aggressive, since you're still young (like you said, 40 years). Most companies have plans you put your money into based on how conservative or aggressive you want to be. I put mine in the middle. With these cookie-cutter plans, you don't have to do anything to manage the account. That's up to the financial wiz folks. The conservative and moderate ones don't invest as heavily in Stocks, and put your more towards bonds & mutual funds, and just a little in stocks. With a plan like that, your money can't all disappear, and will have huge growth over your career (40 years). If you're feeling tentative, an alternative would be to roll the money into a high-yield money market account. This is more short term and the gains are less, but at least you're collecting something on your money. I've never gotten into day trading, because I really don't like the idea of accidentally losing all my money. People get paid to do that, and luckily my company takes care of all that nonsense. If you have any questions, just let me know.

belleshpgrl said...

After I meet with that guy I will totally call you. I don't know why all this makes me so nervous!