Just getting' started on my retirement.

Discussion in 'UPS Retirement Topics' started by kmkshakey, Jun 3, 2015.

  1. kmkshakey

    kmkshakey New Member

    Hi all. I'm new, so I'll just get to it.

    I am a PT loader in what I guess would be the Mid-Atlantic region. I'm approaching my one year mark, so I figure now is the time to start investing. A year ago would've been better, but better late than never I suppose. I've been doing a lot of reading in regards to 401ks, retirement planning, etc, and I feel fairly confident in my understanding of the subject, but I'd still like some personal advice/insight/wisdom/criticism from people who have actual experience. So my financial situation is as follows:

    Age: 26, single, no kids, no plans for them in the near future.
    Assets: Boyish good looks.

    Debts:
    1. ~$4k student loan that's long been in default, I don't even know who owns it anymore, all I know is that it's most likely accumulating interest. Oh and my entire tax return was taken by the DoE in order to pay for some of it. I think I might just let them keep at it. A few more years and it should be paid off if they aren't just dickin' me around and taking my money for nothing.

    2. ~$3k in medical and ~$500 dental bills. Again, no sort of payment plan in place thus far. Will look into it.

    3. Currently paying down a credit card at about $100/mo, balance is now at ~$275

    That just about does it.

    Anyhow, I've put 5% into the Roth option (don't care about the loss in pay, I want every cent I invest to accumulate tax-free and be withdrawn tax free) Long story, father passed, beneficiary money taken out to try to save house, house foreclosed, filed for bankruptcy (not the debt repayment one either, the bad one), and apparently I owe taxes on that money as well for an early withdrawal penalty (I assumed there would be no such thing, seeing as how death benefits are usually meant to be used....you know). Anyway, that's another story.

    I'm rambling: 5% Roth, split as such: 50% S&P 500, 35% S&P 400, 15% Russell 2000

    This isn't the most diversified portfolio, but I like the way it looks on a pie chart. Any thoughts?

    Edit: Oh yeah, I guess the real question is, should I even be investing with such liabilities? Won't the people I owe just take it right out of my 401k when they deem fit? I know man, I know...

    Edit 2: Thank you so much for the kind replies and not judging an obvious fudge-up too harshly. By the way this forum has the absolute fastest response time of any I've ever seen.
     
    Last edited: Jun 3, 2015
  2. Brownslave688

    Brownslave688 You want a toe? I can get you a toe.

    Pay off your debt. It's not only the right thing to do its the adult responsible thing to do.
     
    • Like Like x 3
    • Agree Agree x 3
    • List
  3. upschuck

    upschuck Avatar bet gone wrong

    This is what I would do:
    Continue paying these cc first untli paid off

    Contact your medical bills, and see if they would reduce them, and start paying them, adding the $100 that you paid to cc to these

    If it is Fed student loans, they never disappear, and probably going up with charges, pay minimum s if you can, and when the first 2 are paid off, add that total to this.
     
    • Agree Agree x 3
    • Like Like x 1
    • List
  4. upschuck

    upschuck Avatar bet gone wrong

    BTW, goid job putting money in 401k so early in life, I didn't get in until about years after I sarted
     
    • Agree Agree x 1
    • Friendly Friendly x 1
    • List
  5. Brownslave688

    Brownslave688 You want a toe? I can get you a toe.

    Yeah I commend the op for thinking about the future but sounds like he has not been very fiscally responsible in the past and needs to remedy that first.
     
  6. kmkshakey

    kmkshakey New Member

    I agree completely, and I will. It's just been a rough road and I've sort of been on auto-pilot for a while, but believe me I don't like feeling like I've taken advantage of people or put a burden on the system. My dentist was super nice.
     
  7. kmkshakey

    kmkshakey New Member

    I hear you man. I'm definitely several steps back, but I do want to improve.
     
    • Like Like x 2
    • Agree Agree x 1
    • Winner Winner x 1
    • List
  8. Operational needs

    Operational needs Well-Known Member

    You're lucky you're young with no kids. You can fix this. I would get another job or two if PT, to pay everything off faster.
     
  9. Brownslave688

    Brownslave688 You want a toe? I can get you a toe.

    It's nuts to think at 25 I was a full scale driver.

    You often don't realize how blessed you are until after the fact.
     
    • Like Like x 1
    • Agree Agree x 1
    • List
  10. Operational needs

    Operational needs Well-Known Member

    I wish I was a full scale driver. Lol.
     
  11. kmkshakey

    kmkshakey New Member

    I'm working on that. In fact I'm lucky. I did some labor for a younger contractor recently (one of the most go-getting people I've ever seen) that I met through a friend. Apparently he wants to train me and add me to another framing crew he's creating. He's just handling paperwork and/or negotiating terms with investors on a few properties at the moment, but once the ball gets rolling on that, I should have steady, good paying work for the foreseeable future. He wanted to see what I was about, and apparently I passed the test, and I made more working with him in two days than I make in a week at UPS. So when that picks up, I'm going to really work on paying down my debts.
     
  12. kmkshakey

    kmkshakey New Member

    I know a guy who got into UPS straight out of high-school and was driving at a younger age than when I first learned the 8 keys. He's good.
     
  13. retiredTxfeeder

    retiredTxfeeder cap'n crunch

    The 401k wasn't available when I started working for ups. It came along later in my career. I initially started with 4%..then 8%..then 15% as I got more financially stable. They even offer the ability to put more % than that now. I believe up to a max of $18,000.00/year. I would say pay off your CC's first and foremost. As you earn more, the Govt will pay off your student loans automatically (by garnishing your tax refunds) Put in as much money as you can afford into the 401k as fast as you possibly can. Do your homework as to how to divvy up your investments. For example, the S&P 500 has been doing well as of late, not so good a couple of years ago when the market was down. You can change your investments quarterly, I believe. (things change from time to time, so I could be wrong on the specifics) There is no guarantee that there will be a pension available or even Social Security when you get older. The 401k is an excellent choice. Give till it hurts! ouch! Good luck to you, young man.
     
    • Like Like x 1
    • Agree Agree x 1
    • List
  14. Operational needs

    Operational needs Well-Known Member

    One thing you'll learn is that the harder you work and the more open to learning new things, the more willing successful people are to help you in achieving success. They tend to like to bring up like-minded people with them.
     
  15. kmkshakey

    kmkshakey New Member

    Yes, its $18k atm according to the Prudential site

    I like the convenience of letting them just take my tax returns, although I do like my tax returns, but wouldn't it be beneficial to me to at least attempt some payments? This way the principal will be lower when the go to compound interest, and it might cancel the lien they have on my income, allowing me more freedom to maneuver my money around how I see fit? If not, I'm okay with it.

    I know the markets can be volatile, but everything I've read regarding the 09 crash was that people who held on to their investments rebounded eventually, and I have (at least I hope) a long investment ... term? So I should be able to handle the ups and downs over the long run? I'm basically new at this, so I'm learning everyday. I know you're supposed to become more conservative in your investments the closer you get to your target retirement date, so that's something I'll definitely be doing in the future, but for now, I'm just going to stick with what I have, to see how it fairs.

    I am actually not counting on SS at all. As far as I'm concerned, it won't even exist when it's my turn to retire.



    Thanks for the reply.
     
    Last edited: Jun 3, 2015
  16. Monkey Butt

    Monkey Butt You can call me Chappy Staff Member

    I agree.
    I was a full-time sup at 25 and getting stock awarded (at $0.66 cost basis per share) and buying UPS stock in addition to the awarded MIP stock.

    Sacrifice back then means security today.
    Started contributing to 401k as soon as it was introduced.
     
  17. kmkshakey

    kmkshakey New Member

    That's another question I had. UPS stocks. I'm eligible for the DESPP, and I already registered with the website, but I'm a little apprehensive. It's almost just like a rainy day fund, right? A different type of savings account? With the 5% discount aren't you technically getting an automatic return of 5%? My only concern is the minimum deduction of $10. Between 5% into the 401k, my union dues, paying off my debts and feeding myself, I don't know if I would even be able to handle all the deductions. Should I just shut up and do it? I mean I work for the company, I should have some level of confidence in its success....

    By the way, what is MIP?
     
  18. Monkey Butt

    Monkey Butt You can call me Chappy Staff Member

    MIP is a bonus program for management and it stands for Management Incentive Program.

    No the DESPP is not an automatic 5% ROI.
    It is a discount off the Market price of UPS stock.
    It my drop one-half in value next week.
    There are no guarantees.

    I would advise to invest in 401k Roth instead of DESPP.
     
  19. oldngray

    oldngray nowhere special

    401k's came out in the middle of our working history so we had less time to take advantage of them. Now we can see with perfect hindsight how important an investment like that is. Mine is OK but not close to what it could have been with more time.
     
  20. upschuck

    upschuck Avatar bet gone wrong

    That 5% discount advantage will be gone when you sell and declare your dividends. @Photog is right, put it in your roth.