Wooo!!! Ok, I already have a 401(k) in which my employer contributes a percentage of my salary. So, technically, I’ve been saving for retirement since I started working two years ago. However, I’m ever so slightly upping the ante without affecting my loan pay-off goal. Here’s how.
Every paycheck I auto deposit a certain chunk of change into my savings account. Now, I don’t quite act like this money doesn’t exist. My savings account is linked right with my checking account and I have transferred from the former to the latter more times than I care to admit. I’ve decided to take that chunk of change and, instead of sending it one place, send it two places: a portion to my same old “emergency” fund and now $100 a month to a Roth IRA.
I’m still pretty unseasoned with this investment stuff. However, I do know that I can withdraw my deposits to a Roth IRA penalty-free. If I were to truly, truly have an emergency, that $100 a month would be accessible. Therefore, I now have a Roth eRA (as in emergency, hur hur). I went with Charles Schwab. Apparently, T-Rowe no longer waives the minimum balance with a $50 auto-deposit, therefore I’m going to Schwab which will waive the minimum with a $100 auto-deposit.
As of now, I’m not worried about the investing side of things – I’ll figure that out shortly. I’m just happy to make this move; I feel it’s a real big step in setting up a solid future for myself. As for my goal of paying down my student loans…
- As I said, I’m still allocating the same amount for savings, just splitting it between the e-fund and a Roth IRA.
- With $100 less heading towards my e-fund per month, I feel I will be much, much more cautious about dipping into it.