• Emptying Out A 401(k) To Pay Off Credit Card Debt

    A reader writes in with an interesting scenario: I’m 28 years old and I have two 401(k) accounts, both with about $30,000 in them. At the same time, I have about $25,000 in credit card debt because I made some very stupid moves a few years ago. I’m paying this debt down, but it’s at …

  • What Does It Mean To Put Away 10% Of Your Salary For Retirement?

    A reader wrote in with the following question: I have read in many places that you should maximize your 401(k) contributions. To me it seems there are MANY definitions of maximizing this and I was wondering what you mean when you say you should be saving at least 10% of your income for retirement. Right …

  • Does Ultra-Frugality Mean That You Don’t Need A 401(k) Or A Roth IRA?

    An ultra-frugal reader writes in with an interesting question – why even bother with a 401(k)? My husband and I have been living on about half our income for many years. If our expenses and savings rate stay about the same, we’ll have enough savings to live off the interest in about 7-10 years (depending …

  • A Closer Look At Money Magazine’s Retirement Benchmarks

    In my recent review of the April 2007 issue of Money Magazine, several people were quite interested in my comments on the early retirement article that appeared in the magazine. In brief, here’s the part that was interesting: Assuming you want to retire at age 60 and plan to have no pension and no job …

  • Five Minute Finances #5: Get Started on Setting Up Your 401(k)

    Five Minute Finances is a series of tips on how you can save significant money or reorganize your financial life in just five minutes. These tips appear Monday, Wednesday, and Friday on The Simple Dollar. If you haven’t started up a 401(k) plan (if you’re an employee) yet, what are you waiting for? Let’s say …

  • Inflation: What Is It And Why Should I Care?

    Inflation is one of those topics that crops up time and time again on the news, and it’s one of those topics that makes my wife’s eyes immediately glaze over. It’s not long before the channel has been turned or the newspaper page has been flipped. Yet inflation (and avoiding it) is one of those …

  • Borrowing Against A Retirement Plan To Make A 20% Down Payment

    My wife and I are currently contemplating an interesting question: should we borrow against our retirement plans in order to make a 20% down payment and avoid PMI or an adjustable rate mortgage? We’ve arrived at an answer to this question, but it’s not an answer that works for everyone, so let’s work through the …

  • The Treasury Note Retirement Plan

    A few weeks ago, I wrote an overview of what treasury notes, bonds, and bills are and how they work. In the discussion, I dropped this little tidbit which turned out to be alluring to a few of my readers: I know of at least one person with several million dollars sitting in treasury notes; …

  • What Do I Need To Retire? A Simple Way To Calculate Your Number

    Quite often, I’ve been asked by my relatives how I have such confidence in my esitmation of what I’ll need to retire. I told them that I have developed a very specific process for developing an estimate of the amount of money I’ll need to retire. Please note that I am not including any pension …

  • Review: The Number

    This week, The Simple Dollar takes a look at Lee Eisenberg’s The Number, a frank, well-written, and entertaining book that addresses the one number that so many of us obsess over: the amount of money we each need to live the rest of our lives the way we want to. For the last few months, …

  • When Your Income From Investments Covers Your Living Expenses: The “Crossover Point”

    About a month and a half ago, I read Your Money or Your Life and found it to be a relevatory experience (check out my review of the book). One particularly interesting part was a discussion of a concept that the authors referred to as the “crossover point.” Since then, I’ve seen reference to this …

  • Another Approach To Retirement Planning: Balancing A Retirement Target Fund Myself

    Regular readers of The Simple Dollar are aware that I’m going through the process of starting my Roth IRA. For those unaware, so far I’ve decided to start a Roth IRA this year, found a company (Vanguard) that I’m comfortable with as a manager, developed a detailed plan for making it happen this year, and …

  • Musings On Diversifying My Portfolio

    The phrase “diversify my portfolio” has always made me giggle. An old friend of the family, who was quite proud of his highly blue-collar attitude and lifestyle, came into a large amount of money. He had a financial advisor invest it for him and teach him a little bit, and so he’d stand there, wearing …

  • The Number: Overview

    This week, The Simple Dollar takes a look at Lee Eisenberg’s The Number, a frank, well-written, and entertaining book that addresses the one number that so many of us obsess over: the amount of money we each need to live the rest of our lives the way we want to. For the last few months, …

  • Planning For My Roth IRA: Looking At Vanguard’s Target Retirement Funds

    This year, I’ve made a commitment to start a Roth IRA and I’ve developed a very specific plan to make it happen. I’ve also decided to use Vanguard to manage the IRA because they’ve treated me very well in the past and their returns are strong. Now comes the hard part: how exactly do I …

  • Starting Your Roth IRA In 2007

    Many people often think in the back of their heads that it would be a great idea to start a Roth IRA, but they let it stay there in the back of their heads because it’s easier to do other things than plan for an optional retirement plan, especially if one is already deducting money …

  • How To Retire In Your 30s … Without Selling Your Soul

    Recently, I came across an article at WikiHow entitled How to Retire in Your 30s which pledged to describe a plan by which a person could retire by their 40th birthday in only six short steps. For the most part, the article is spot-on but out of touch with reality. Let’s take a look. 1. …

  • Live Like You Were Dying

    So many of us have imagined what we would do with our lives if we had just one year to live. Most of these fantasies involve quitting a job, spending time with loved ones, and traveling around the world. What’s keeping you from doing this right now? Debt? Responsibilities? Don’t know? Don’t worry, you’re not …

  • Figuring Out What Money Really Is

    My wife and I used to sit around and wonder what we would do if ten million dollars fell on our lap. I used to imagine buying fancy cars and an amazing house and more electronic gadgets than I can even imagine. They were great dreams, the fantasies of a twentysomething yuppie couple wanting to …