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Retirement PLANning

relief tube

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Seeing that counting on a pension is close to gone with all these stupid sub-$200 fares, what's the consensus on retirement savings? I'll ask it simply:

Option 1: Throw all your efforts into your 401K, with all savings put there-in

Option 2: Put only enough into 401k to get company match, then put all other efforts into a Roth IRA.

Which, from all your individual knowledge and sources, is the best plan? Assume only a 401k is offered from the airline.

Or, if I did not offer the best option, feel free to suggest something new.
Please, offer only credible advice. My future kids stomachs might depend on it:)

Thanks in advance.
 

Rottie

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Its all about flexibility and control. Your company's 401k gives you neither, BUT matching funds is free dollars, so that we will take. My advice would be to do the minimum to get the max company match, and use the rest to fund a Roth IRA. In January, it might be possible to contribute to a Roth 401k, depending if the company does it. Again, a roth 401k would be more tax advantageous than a regular 401k. (similar to trad ira and roth ira)

With the roth ira you are also given the right to select what funds the dollars will be invested into. be careful with online investing, might not be a bad idea to consult someone who can appropriately determine the fund based on your specific situation with life/family...etc...hope that helps

pm me if you have questions or need some more guidance
 

viper548

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I opened a Roth IRA through Ameritrade about 5 years ago. I'm not so great at picking stocks, so I've only put $1k in there. I have a Thrift Savings Plan (TSP) through the military and a 401k through my airline and I have been putting my efforts into those.
 

viper548

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I'm not happy with my roth ira through ameritrade because i'm not that great at picking stocks and would rather leave it to people who know what they're doing. Any good suggestions on what to do with my roth to make it more like my 401k where I just pick some funds and put money in?
 

Rottie

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Let me just say this, there are very few people who can pick the stocks that are going to do good...and none of them are flying planes...haha

What i would say is in your best interest is to put that money into something that manages the risk better, and has the potential to earn money at a rate better than inflation. The whole point to investing right? There are literally thousands of funds out there, and which one is right for you depends on some variable. Generally, the younger you are, the more risk you can take, because you can make up any shortfalls in the years ahead of you....pm me for any questions, hope that helps ya
 

Flechas

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I personally don't like mutual funds because that'slike giving somebody else yourmoney to gamble with it, youonly get to pick the gambler and the type of games. That being said, I have a 401K plan with my company,but I only put into it whatever amount the company matches, because at the end, even if the money ddidn't makemuch money, you get the free money from the company.

I suggest buying some stock on individual companies that are in a stable industry and youthink willhave a good future. You can also look for good CDTs, or savings accounts that offer 3.5% or more. If you are into trading, then do more of it by yourself, but not mutual funds.

JMO.

Flechas
 

Rottie

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Flechas said:
I personally don't like mutual funds because that'slike giving somebody else yourmoney to gamble with it, youonly get to pick the gambler and the type of games. That being said, I have a 401K plan with my company,but I only put into it whatever amount the company matches, because at the end, even if the money ddidn't makemuch money, you get the free money from the company.

I suggest buying some stock on individual companies that are in a stable industry and youthink willhave a good future. You can also look for good CDTs, or savings accounts that offer 3.5% or more. If you are into trading, then do more of it by yourself, but not mutual funds.

JMO.

Flechas
a great stock to buy a couple years ago was an oil based company doing very well, with what looked like to be a great future...any guesses???? Enron...the 401k match i agree with...buying individual stocks, nope. any smart investor will tell you lowering your risk with mutual funds is the best way to go. the incorporate a portfolio of equities, bonds, int'l into one fund. its like throwing darts at a dartboard to select A stock, which is what you do buying individual stocks. savings accounts wont beat inflation, so you in a sense lose money, based on what the money can buy....
 

Flechas

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Rottie said:
a great stock to buy a couple years ago was an oil based company doing very well, with what looked like to be a great future...any guesses???? Enron...the 401k match i agree with...buying individual stocks, nope. any smart investor will tell you lowering your risk with mutual funds is the best way to go. the incorporate a portfolio of equities, bonds, int'l into one fund. its like throwing darts at a dartboard to select A stock, which is what you do buying individual stocks. savings accounts wont beat inflation, so you in a sense lose money, based on what the money can buy....
I agree, individual stocks have a risk, but I rather take that risk that buy a mutual fund (previous experience with both). Keeping a single stock is not a good idea either, i'd have a diverse portafolio that I can control.
 

Rottie

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Flechas said:
I agree, individual stocks have a risk, but I rather take that risk that buy a mutual fund (previous experience with both). Keeping a single stock is not a good idea either, i'd have a diverse portafolio that I can control.
control is great, and we all want to control our money...but let me put it this way. a lot of passengers like control, and they dont like riding in back because they give up control to us pilots. they can't fly planes usually, so they give it up to someone who lives and breathes it.

same way with money and investing, I would rather put it in someone's else hands who lives and breathes this, watches the market all day, and is schooled in this, than try and speculate what these stocks are going to do. because the question becomes, are you diversifying correctly, managing the risk correctly....at the very least, look at an index fund. not managed by a person, low costs, and is generally considered risk averse.
 

Flechas

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Rottie said:
control is great, and we all want to control our money...but let me put it this way. a lot of passengers like control, and they dont like riding in back because they give up control to us pilots. they can't fly planes usually, so they give it up to someone who lives and breathes it.

same way with money and investing, I would rather put it in someone's else hands who lives and breathes this, watches the market all day, and is schooled in this, than try and speculate what these stocks are going to do. because the question becomes, are you diversifying correctly, managing the risk correctly....at the very least, look at an index fund. not managed by a person, low costs, and is generally considered risk averse.

You are right about that,they now better than we do, but unlike our passengers, we can learn to invest and make better choices for ourselves. Like I said before, either way it is a gamble. I'm not an expert, nr I'm rich, so everything I stated is personal opinion.
 

Rottie

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Flechas said:
You are right about that,they now better than we do, but unlike our passengers, we can learn to invest and make better choices for ourselves. Like I said before, either way it is a gamble. I'm not an expert, nr I'm rich, so everything I stated is personal opinion.
It is a gamble in a sense...and if you dont "gamble", there really isnt much of a retirement fund. My advice, seek a professional unless you study the market enough to know how to daytrade. I'm not going to call myself an expert either, but I am licensed in this area.
 

BluDevAv8r

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Flechas said:
That being said, I have a 401K plan with my company,but I only put into it whatever amount the company matches, because at the end, even if the money ddidn't makemuch money, you get the free money from the company.
Flechas,

Are you aware of the tax advantages of putting as much money as possible into your 401k annually? Don't discount those tax advantages...they are huge. And if you can't break the standard deduction every year, it may be your only tax shield (other than the standard deduction).

-Neal
 

Flechas

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BluDevAv8r said:
Flechas,

Are you aware of the tax advantages of putting as much money as possible into your 401k annually? Don't discount those tax advantages...they are huge. And if you can't break the standard deduction every year, it may be your only tax shield (other than the standard deduction).

-Neal
I' am not really aware. But I can't afford to put more money in my 401K. I'm barely making it. I have some credit card debt to pay (Some ratings and personal expenses during my CFI years) and I just started second year pay this month. As soos as I catch up with my debt I'll have to look more into it.

Andres
 

Rottie

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BluDevAv8r said:
Flechas,

Are you aware of the tax advantages of putting as much money as possible into your 401k annually? Don't discount those tax advantages...they are huge. And if you can't break the standard deduction every year, it may be your only tax shield (other than the standard deduction).

-Neal
those same tax advantages can be utilized in ira's...even better in a roth ira...401k's are good, their uses are many, but maxing out your 401k isnt always in your best interest
 

BluDevAv8r

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Flechas said:
I' am not really aware. But I can't afford to put more money in my 401K. I'm barely making it. I have some credit card debt to pay (Some ratings and personal expenses during my CFI years) and I just started second year pay this month. As soos as I catch up with my debt I'll have to look more into it.

Andres
Andres,

Go pick up a copy of "Automatic Millionaire." That book has some great lessons in personal finance. Well worth the few bucks.

-Neal
 

BluDevAv8r

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Rottie said:
those same tax advantages can be utilized in ira's...even better in a roth ira...401k's are good, their uses are many, but maxing out your 401k isnt always in your best interest
How is it better in a Roth IRA...given that it is after-tax dollars? Most guidance I have seen says to max out your 401k first...then max out a Roth if you can afford it.

-Neal
 

Flechas

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BluDevAv8r said:
Andres,

Go pick up a copy of "Automatic Millionaire." That book has some great lessons in personal finance. Well worth the few bucks.

-Neal
Thanks Neal, willdo that tomorrow, who's the author?
 
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