Topic
Retirement and College Savings 101
Date
Attendees
Presenter: Sara Glakas, Black Barn Financial
Other Attendees:
Discussion Notes
- Investing: looking toward the future
- looking to reach a long term goal: retirement and child college expenses
- Retirement
- Social Security: about 40% of average worker income
- TRS (defined benefit plan): # yrs of service x 2.3% x average of highest salary years
- 403b or 457 (voluntary, defined contribution plan): save money today, let it grow, use the money to the pay bills in the future
- College
- Income
- Student Loans
- 529 plans or Coverdell ESA plans
- Retirement:
- Roth: timing when taxed
- Traditional: pre-tax (dont pay tax today, but pay tax when you get the money)
- Roth: contributions are in post-tax (have already paid your taxes) and all the growth comes out tax free as well
- 457: No 10% penalty if pull the money out early
- 529: MUST be used to educational benefits better to have an account for each kid; can change the beneficiary
- each state sponsors a 529
- main benefit: tax breaks on state taxes
- Vanguard: Nevada ($3000 to start but take out least amount of fees)
- Questions to ask financial advisor:
- How are you getting paid? (if paid by the customer good, on commission for selling financial products, not good!)
- Fudiciary versus suitability: Are you a fudiciary?
- Roth IRA: all you need is earned money and you can set up a Roth for your kid
- If you need the money in 5 years, do not be in stocks!
Action items