Duplicate post.
Thanks for link for Schwab target funds. I will check it out. I will be very disappointed to loose $50k in a day. My risk tolerance is very at this stage. I would like to keep it safe and spend some time understanding various investment ideas. Thanks
The largest single day percentage drop of the S&P 500 was 20%. So, if you had invested all of your IRA money the day before that, you would have lost $30K. The longer the time period in a broad market fund, the more likely your funds are to grow. However, there is no guarantee. If your risk tolerance is low, you can invest in a very conservative fund/index and most likely will beat bank interest rates.
If you can’t handle even modest losses, you should stick to CDs.
ETA: The second largest single day percentage drop of the S&P 500 was 9%, so the 20% was a pretty big outlier.
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A bit too much hyperbole on my part–I didn’t mean to say that in one day you could lose 33%. But large losses are extremely tough for some people to handle. The ways OP was asking for regular stable, low growth seems like even low risk funds might be too risky.
Did you read this?
The second section applies to you.
I would not pay off a 15yr fixed at 2.75%. If inflation heats up, you may be earning more than that on your savings account before you pay off your mortgage. And if we don’t have another recession or crash, stocks might return more than that in the long run.
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Thanks for the book link. I am going to read some investment related stuff before investing into stock market.
Thanks again.
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Hi,
Thanks again. We are not going to pay off mortgage.
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Can you please share the name of the bank?
Look for a foreclosure and rent it out. Rinse and repeat.
A few tips from a guy that saved enough to retire at 51:
Dump as much as you can into your 401k, enough to get the max company match but ideally more than 10% if you can afford it. Put everything into a Total Stock Market index fund (add international stock index fund if you wish up to say 30% or so of total funds).
Open a Vanguard, Fidelity, or Schwab account and setup an auto-draft from your savings every month into a Total Stock Market index fund. Do as much as you can afford.
Max out your Roth IRA contributions every year, use same stock index fund.
A few years before you retire, adjust your 401k to the asset allocation you want (example is 75% stock 25% bonds). Make sure all the bond fund money is in the 401k for tax reasons.
At your age you need to be maxing out these accounts, you have nowhere near enough liquid assets right now unless you can live off of your outside stuff.
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It is local credit union with reward checking accounts. They have 2.5% interest for max balance of 50k. Requirements are steep ( 15 transactions with $5 min for each translation).
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Thanks for the feedback. I am maxing out my 401k contributions with 25% match from employer. There is no 401k for spouse. I am working on adding $5500 to IRA account. I am 40+ years and also need to take care of college for 2 kids down the line. We have some illiquid fixed assets but those are in completely different place. They won’t help us here. I have to find a way to save more money and make something out of savings / 401k balances. I never looked into Roth IRA before. I need to explore Roth IRA, Student savings and life insurance.
Thanks
Careful with this one. I learned on FWF that only term life is OK and everything else is most likely a scam, especially if it doesn’t sound like a scam to an untrained ear 
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Many non-term life policies are a terrible fit for most people. However, there are certain limited cases where a non-term life insurance policy might make sense. If you’re not sure if that applies to you, then it doesn’t apply. When in doubt, only buy term.
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That’s why I suggested opening a mutual fund account and setting up a monthly auto-draft from savings. You’ll be using dollar cost averaging into the stock market and you will definitely want after-tax accounts to live off of if you want to retire before 59 1/2.
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Our income for 2017 is around (adding column 1 from w7) 130k. I think, we are good to contribute $5500 to spouse IRA right?
I have insurance with employee benefits. I think it is 2x salary. But, it is tied to to job.
Thanks
You only need $11k in earned income to contribute to both your and your spouse’s IRA up to the max. If you want to deduct it as a traditional IRA and you are already contributing to a 401k plan as you say, the spousal deduction cuts out around $190k of AGI so you seem to be ok for deducting that. In contrast, the worker with the 401k plan’s Traditional IRA deduction cuts off around $110k AGI.
Hi xerty,
I am little confused with fallowing statement,
“If the working spouse doesn’t have a retirement plan available through their employer, that spouse also has the ability to deduct the full amount up to the contribution limit. However, it is important to note that if the working spouse does have a plan available at work, deductions for contributions to the spouse’s IRA phase out for AGIs between $99,000 and $119,000.”.
Spouse is not participating in employer retirement plan. Not sure if they have any 401k plan from their employer. I am participating in my employer 401k plan. Between $180k or $99k, which one is our phase out limit. We are going file as married joint filing.