Hi Jsilotti - In general those funds are designed to cover all of your bases. So if that company is a good manager you shouldn't need to do too much fiddling. But f
eel free to shoot over the name of the company you're using if you'd like us to take a look at its fund in particular.
Have you actually repaired the default?
Hi again Jsilotti - Upon reading your note again I'm actually a bit puzzled. I had assumed you were talking about a target-date retirement mutual fund, but it sounds like this is something else entirely. Can you tell me anything more about this vehicle managed by your company?
How so? Did you consolidate the debt? Are you in income-based repayment now?
Gotcha, Jsilotti. That is a target-date retirement fund indeed. I'll take a look at the Schwab site now but my guess would be that you're best off sticking with just that one fund.
Tom, if you are in income-based repayment, any remaining debt is forgiven after 25 years. You do have to continue to qualify for IBR, though. If your income goes up, so would your payments.
Here's a good question from khoa152 about buying a home.
Kim, some great information on SEP IRAs. Thank you!
Yes that fund looks pretty well-diversified, Jsilotti. I think you'd do better to leave that fund be than to start picking additional stocks to hold in your account. Thanks for the great question!
Thanks for looking into that, Elizabeth.
So the total loan is about $30,000? If your income is going up, you will probably end up making higher payments anyway.
Elizabeth, here's another question you might be able to help out with from DanC.
Hi Dan - I'm not familiar with these. Do you have any more information, or better yet could you pass a long a link to these products?
We're just about out of time, so while we wait to see if we hear back from Dan, maybe you can offer some advice to Harper.
In general, Dan, just make sure you take a good hard look at all the legalese around investments. Get a prospectus. Find out it the investment is registered with the SEC or another regulator. Always be critical and skeptical in evaluating new pitches for investments.
Hi Harper - If you're worried about the big-picture of your finances, you can always consider consulting with a fee-only adviser, such as one through NAPFA or the Garrett Planning Network.
They may be able to offer you a better detailed roadmap to success than we can in this limited space. Thanks for writing!
Alright, we'll go ahead and start wrapping up. I think we're just waiting on some advice for Khoa152. I don't want to cut off any of our hosts!
Anyone have anything else to add?
Thanks for the great questions, everyone! Gives us so many ideas for future articles!
As Kim said, thanks to all who joined us today! Again, it's very encouraging to hear from so many young people out there who are planning ahead and thinking about money management.
And a big thanks to Kim, Stacy, Jane and Elizabeth for volunteering your time today! We’ll definitely host another “Starting Out” chat in the future.
Bye, all, and thanks for the questions.
I have 5 student loans that have all defaulted. Each is around $6,000 plus the accumulated interest of about $600 each. I'm worried that my current monthly payments of $300 may be too low in the long run. I can afford to pay more but I'm not sure if I should. I'm only 25 years old so should I pay more now if I have more to pay or should I save that money in the bank and continue paying the minimum monthly payment?
Hi Jsilotti - In general those funds are designed to cover all of your bases. So if that company is a good manager you shouldn't need to do too much fiddling. But f
Yes, that is the SEP column! Thanks so much for tracking it down. It also talks about another savings option for self-employed people -- a solo 401(k) -- which has higher contribution limits if you have just a little self-employed income, but you do need to be careful about the limits if you have both a solo 401(k) and contribute to an employer's 401(k), too. If you're already maxing out an employer's 401(k), then you may want to contribute self-employed money to a SEP. Here's a Tax Tips column from last year with more information about the limits and rules: www.kiplinger.com
Since we've received several questions about Roth IRAs, here are a some articles you all might find helpful: The Basics of Roth IRAs, How to Save for Retirement and Higher Education Costs at the Same Time and Should I Save in a Roth IRA or a Traditional IRA?
While Elizabeth is looking into that, @jsilotti, here's a recent Starting Out column by Susannah Snider on target-date funds: www.kiplinger.com Hope it helps!
