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Retirement funding problem...

Discussion in 'Business Operations' started by topsites, Nov 28, 2006.

  1. topsites

    topsites LawnSite Fanatic
    Messages: 21,653

    How does one, as an older guy who didn't think about this until he was in his mid-30's, sock away 5 thousand / year without locking it up until age 69.5 AND without paying HUGE taxes?

    I can tolerate locking it up to a point, but what if I want to retire at age 62 w/out taking a huge loss?

    I'm learning about the SEP process, and also the solo 401k sounds interesting, any other ideas?
  2. Allure

    Allure LawnSite Senior Member
    Messages: 426

    Roth IRA. great retirement investment & i believe you can withdraw without penalty at 59 1/2. Same for my 401k but that's through my other job. i don't know about solo 401k's

    with a roth ira you invest after tax dollars, then, when you withdraw the money you pay no tax.

    right now i believe the maximum yearly contribution is still $4000 unless you are over 50 then it's higher.
  3. Josh.S

    Josh.S LawnSite Bronze Member
    Messages: 1,085

    I am young still, but I would like to start putting money into some type of retirement fund next year or the year after, where would I go to start it?.... My goal is to retire by the time I'm 50, although I don't plan to achieve this with the lawncare business...
  4. BeautifulBlooms

    BeautifulBlooms LawnSite Senior Member
    Messages: 613

    Roth IRA,

    The Vanguard Group www.vanguard.com (singlehandedly the best no load or low load funds around)

    Best way to go and max out your contributions every year/ Put away as much as you possibly can withint the governments rules.

    Just be sure to research where you put your money when you start, and always remember that it is for retirement, if the market fluctuates up and down don't worry it will bounce back. Get used to funds they offer and most of all feel comfortable with where your money is invested.
  5. topsites

    topsites LawnSite Fanatic
    Messages: 21,653

    Because of one additional issue I'm still leaning towards 401k ...

    IF I need the money, I hear say I can borrow from my 401k and pay this loan back later (with interest lol), and so long I pay it back then it is not viewed as a payout...

    Is this possible with Ira's, to withdraw money as a loan without penalty?
    Because that's the only thing that makes me nervous, I HATE the thought of having money completely tied up.

    With a loan, at least when I pay it back (to myself), it is to my greatest benefit.
    That's if I even need it...
  6. LindblomRJ

    LindblomRJ LawnSite Silver Member
    Messages: 2,570

    Go talk to a finincial planner. Roth IRA seems to one the better plans around.
  7. hdtvluvr

    hdtvluvr LawnSite Senior Member
    Messages: 507

    If you are young, you should seriously consider stock mutual funds. The stock market has outpaced interest rates over the long haul. IMO, an International fund should also be included in a retirement account mix.

    The stock market has ups and downs. If you can't sleep because the market is down and you've lost thousands (on paper), the stock mutual funds may not be right for you.

    Bond funds and CD's are stable and you usually don't lose money (unless they are junk bonds). However, if you look at the bond funds and other investment types against inflation rates you will lose future buying power because the return is at or barely above the inflation rate. This means your money isn't working hard for you.

    It is all a matter of personal comfort levels. Vanguard is a good group. Fidelity, T. Rowe Price and others are also good. Regardless of which group you choose, stick with adding money routinely. (Called Dollar Cost Averaging)

    Mow Right, if you are going to start investing next year, now would be the time to start learning about your investment options. Contact one of the groups above and get some info about what they offer. Choose some funds, pretend you've invested $10,000 and watch them weekly. See if you are comfortable with the ups and downs.

    Disclaimer: I'm not a professional investor or accountant.
  8. turf dog

    turf dog LawnSite Member
    Messages: 108

    I use the SEP plan. But as you said you are locking up that money until you retire. When I looked at diffrent plans a few years ago I went with the SEP because it was easy and cheaper to use. Where if I remember correctly the personal 401k was a little pricey to administrate.
  9. Uranus

    Uranus LawnSite Bronze Member
    from Mass
    Messages: 1,624

    I read through this thread earlier today and it got me wondering how much does it take to retire and live happily. Then I got a flire from my bookkeeper and the same question came up because the flier was about writing off expences and retirement funds. So what does it take to retire. I know it differs from location to location and by person by person, but has anyone ever heard of a number that one should have or be close to to be able to retire?
  10. nysuz

    nysuz LawnSite Member
    Messages: 41

    What do you require from life. 3 meals and a cot, less money is needed for that. I want to go to Europe and travel the US, that requires good funds. I could retire today, but I want to do more than just live, so I am thinking $2million invested for us. Plus health care could end up costing 20K by the time my husband and I retire. If you live cheaply, you can get away with much less.
    We got into Roth IRA's and I was only 29 and invested very aggressively. I have plenty of time for things to grow tax free.

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