I’ve been following your plan, and I’m ready to start investing. Do employer contributions count toward the 15 percent you recommend putting into retirement?
Investing 15 percent of your income in retirement accounts is Baby Step 4 of my plan.
That means you’ve already paid off all your debt, except for your home.
You’ve also increased your $1,000 beginner’s emergency fund to a fully-funded emergency fund of 3 to 6 months of expenses. Way to go!
I want you to control your destiny, so employer contributions do not count toward the 15 percent I recommend setting aside for retirement. The first thing you should put money into is a matching retirement account. If you’ve got access to a 401(k) – and your employer offers a match – you should do that up to the match before anything else.
It’s nice if your company will match up to a certain point, but chances are that still will mean you’ve got some work to do. To make up the remainder, you could look at a Roth IRA. Then if the Roth plus what you invested previously to get the match doesn’t equal 15 percent, you could see about a 403(b) or go back to your 401(k) to complete the 15 percent.
You’re doing great, Brenda. Keep up the good work!
Make your final wishes clear
My mother wants everything, except for her home, left to my brother and me when she dies. She would like her longtime boyfriend to have her house. We don’t have a problem with this, but it has not been written into her will. Her mind is still sound, so does she need to officially update the will?
Yes, the will needs to be changed to reflect her wishes where the house is concerned. Since she’s still able to make decisions independently, the will should be updated to reflect exactly what she wants to have happen with every piece of her estate.
It’s fine if she wants to give her boyfriend the house. It’s your mom’s will, and her estate, so she can do pretty much whatever she wants. She could also leave what’s called a life estate that says her boyfriend gets use of the home while he’s alive. Technically, in this kind of situation the house would be left to you, but he would legally have use of it during his life. Upon his death, the home could then revert to you or your brother.
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