Retirement planning opinion, any suggestions please?

Hello All,





I am a total noobie to all this. i am doing my own research but need different opinion from the community





My wife and I both work and live in CA.


Annual Gross Household: little over 200K


We both contribute to 401K but only 5% monthly wage. Our employer don't match the 401K contribution.


Monthly mortgage around $4000 started this year so we probably will see some benefit for the interest paid.





Anyways, i want to put away more money before taxes. we both planing to increase our 401K contribution to 10% .


Can i contribute to traditioal IRA ? I am thinking 529 but would prefer IRA if i could.





Any advice on how can i maximize return based on current figures?


thanks

Retirement planning opinion, any suggestions please?
Given that your employers do not match your contributions, you should both open IRAs so that you have better investment choices.





You can both contribute up to $4000 per year. If you still have more to put away, you can then continue to contribute to 401k. 529 is a good option as well and more flexible if you will be using the money for your children education.





There are a lot of money/investment calculators online to help you with financial planning. For example, http://cgi.money.cnn.com/tools/savingsca...





If you are a novice in investment, consider Vanguard. They are consistently charging relatively small fee for the rate of returns. You can invest with them directly to avoid advisory fees. https://personal.vanguard.com/VGApp/hnw/...





Best wishes.
Reply:Since your employer doesn't match on your 401K then you should not put any money in there or increase your contribution. Put your money into a traditional IRA and you can recieve tax deductions, I think up to $2000. When you retire at 59.5 you will get taxed when you withdraw. Also you open up your retirement to more mutual funds instead of a 401(K) which is only limited to a certain amount of funds.





Another idea is a ROTH IRA, although you don't get a tax deduction when you contribute into it, when you withdraw at 59.5 you won't get taxed, and you just like the traditional IRA, you have many funds to choose from.





Find some funds that get a decent return like around 10%-13% a year.
Reply:I think before you start thinking about maximizing returns, you should look at getting insurance to get yourself covered for possible circumstances like accidents, illnesses, hospitalization and so on.





Once you have get yourself adequately covered, you can look into building a fund that is very liquid to use for emergency purposes.





Only after you have got yourself insured and have an emergency fund, you then look for investment that can maximize your returns on money.





Below is a website that might help.

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