Madbull
New Poster
Cash: $ 0.45
Posts: 2
Joined: 26 Oct 2012
Location: Austin, TX
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| Decisions, Decisions... |
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Morning all, new poster looking for some advice. I apologize in advice for what will be a long post, but want to make sure I give the needed information for you fine folks to give a good personal opinion.....
I'm a 33 year old civilian employee for a County Government. We have a very decent retirement program, (imo), and I am lucky that I started when I was 20 years old. My plan summary is as follows -
7% of my gross as a required deposit
7% interest earned each year, compounded
225% Matching
At 37.6k/year gross, and assuming no cost of living/salary increases over the rest of my career, I could retire after 44 years with the County at 65 years of age -
Account Balance: $570,786
Employer Matching: $1,284,269
Total Value: $1,855,055
Estimated Monthly Benefit: $15,790
In addition to this, I currently contribute to a Deferred Comp plan, which has an $8100 balance (I only squeeze a measly $30/month into it right now, used to do more but have been paying down some debts). That plan has given me a 30.2% Rate of Return over the last 3 years. Granted, it has had it's ups and downs, but I've been pleased with it.
I also have a Roth IRA, but only give $50/month to it, and it was recently started last year.
**Finally, here is my delima**
I left my employer for a month after about 4 years, but came back a month later. My service time does not go away, but I was a moron and withdrew my account balance when I left. There is an option to buyback my funds, by making a one-time deposit totalling the initial withdraw plus 5% penalty for each year that has passed. I am not in a position to do that, (and with the required amount increasing each year, never will). However, I can make a one-time deposit of any amount up to it. It will NOT get me employer matching back, but I will still earn the standard 7% compounded.
I am debating closing out my Deferred Comp next year and doing a lump-sum deposit of $10k. If I do this, I am thinking of diverting my future contributions into my Roth IRA instead of splitting between that and a new Deferred Comp. My 'logic' behind this is that I can come close to matching my Roth cap contributions, and think it would be better to invest it all into that, instead of splitting between the two.
Since I have an existing pension plan that won't be going anywhere, (our plan format is not any forseable danger as some govt plans in the Nation are, which I am very grateful about), do I really need three separate retirement funds? I would think my pension, in addition to maxing a Roth each year, would be more than enough.
I appreciate y'alls thoughts, opinions, advice, etc. Again, sorry for the extremely long post.
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Fri Oct 26, 2012 1:48 pm |
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Madbull
New Poster
Cash: $ 0.45
Posts: 2
Joined: 26 Oct 2012
Location: Austin, TX
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Thanks for the reply Tim. Is diversifying okay even if it means only partially or even under-funding those two other sources? I suppose my issue is that I can continue to put small amounts into my Roth and Deferred Comp, or I come close to maxing out my Roth each year (or putting it all into the Def Comp, either way).
I certainly see how it's wise to spread my future retirement, guess I'm just worried about limiting the potential growth by spreading too thin amongst too many places.
**Edit - I was also leaning towards Roth to help reduce my tax liability in retirement, since I will actually make more in retirement than while employed. Of course, if the numbers in my pension stay true, I don't really think the Roth would help either way, haha.....
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Fri Oct 26, 2012 3:18 pm |
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oldguy
Senior Member
Cash: $ 751.85
Posts: 3656
Joined: 21 May 2006
Location: arizona
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quote:
It will NOT get me employer matching back, but I will still earn the standard 7% compounded.
Most investment funds have a longterm history of 11%/yr - so I wouldn't overdo the 7%/yr compounded fund. It is good to have some 'safe' money, but you also need some money invested in moderate risk funds to build wealth and fight inflation.
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Fri Oct 26, 2012 4:06 pm |
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