Once upon a time I didn’t know a thing about investing. As a young nurse I was guided by my nurse mentors to contribute to my 403B work pretax retirement saving. I always contributed about $3000 annually. My works matches at 2%, so I get extra $1000 annually, yay!
I was referred by my nurse mentors to EA Buck, my financial adviser who helps me with tax and retirement planning. They told me to invest
in Midland National index universal life insurance, which I did. I got a policy for $313,000. I remember he told me
to start a Roth IRA and pay off my debt, which I didn't. I didn't talk
to my advisor afterwards because life happened... I just knew I
needed to keep savings for retirement no matter what. My parents didn’t talk about investing. My
friends didn't talk about investing. I had no clue!
In 2014 my work 403B started to offer target index fund so I had changed
from a short term conservative stable fund to Target 2050 fund. This
had dramatically affected the growth in my account! Now I was actually
investing, but I didn’t really know what that meant.
In September 2019, after getting married, having my second daughter and returning back to work, I went back to see my financial adviser. Again he reviewed my taxes and current retirement savings. He offered me life insurance again, but I passed on it since I was fine with whole life I got from State Farm for my kids. Yes kids don’t need it, but I decided to get a policy for $25,000 for each child. He did talk about better managing my investments to have it follow the SP 500 or DJI. I still didn’t understand these terms, but I agree to have half of my work 403B actively mange by them. They put me into a semi-aggressive mutual funds with Pacific Financial Group. I wanted my accounts to grow and wanted to see what they can do to help! But why? I wanted to be like my nurse mentors who retired before 60! Wish I knew more about active investing before I did this…
2020 was fun! Stocks dipped in March due to COVID-19 and I thought giving half my retirement savings/investments was a fail! My accounts did not fully recover until September. In the mean time I learned everything I could about investing and personal finance. I decided to switch the half of my retirement savings/investments that I manage myself into stock index fund. I changed from Target 2050 index fund to VIPX which tracks very similar to SP 500 or VTSAX. I was so excited to make this move that I even increased my work contributions to 4%! I meant to break up with my financial adviser, but I didn’t. I just won’t give them more money to manage!
I decided to cash out my index universal life insurance. The cash value was $10,000 which went to pay off my debt. I didn't close my account yet since I still have $5,000 cash value that pay itself for now. This saves me $200/month. I paid off my personal loan, credit card and car loan thus improving my net worth! Luckily this money is after tax money and not taxable! Maybe I will resume it... In the mean time I have State Farm 30 year term for $300,000. Do I need to have 2 life insurance? Yes, I am my family's primary income earner!
In 2021 I hit $100,000 in my work 403B! I was ecstatic! Maintaining annual $3,000 for 30 years with 7% growth, I could reach 1 million! Along with my work pension of $300,000, I would be all set! Set for slow FI. Now if only I could just work part time, or retire early! I need to grow my F-U money!
I met up with my financial adviser again who validated this. He reminded me that the tax savings for 403B is awesome now, but you are going to be taxed when you withdraw. He recommend again that I start Roth IRA since I still qualify for it! He also congratulated me for having 529 plan for both my kids. I currently only contribute $20/month per child. He said that is good place to start!
So I dropped my work retirement contributions to match, opened up my own Roth IRA with Vanguard and started contributing $200/month. I chose Vanguard because my work uses this brokerage for the 403B so I was familiar with them. I funded my account with $600 and bought 2 ETF of VTI! My goals is to buy 1 ETF of VTI a month. Once I pay off my debt, I will max out my Roth IRA then work on maxing out my 403B. Maybe I will put some money to my Roth 403B 🤭. Once I can do all these I will be closer to Coast FI! For now I’m just proud to be at this financial milestone!
Warning: Please consult with a financial adviser before considering any type of investing!
What is Slow FI? What is Coast FI?
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