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Help! I'm 38 and need a plan to retire! (Soledad Says #2)

Jan 15, 2022

Dear La Lupis,

Thank you so much for reaching out and sharing your current feelings about retirement conmigo. I want to remind you to show yourself a lot of compassion on your financial journey.

Though you have your individual reasons for postponing investing for retirement, I know that there are also systemic reasons. According to a report from the U.S. Bureau of Labor Statistics, only 67% of private industry workers had access to retirement plans in 2020. The fact that 1/3 of our population is expected to learn about the The Four Steps to Investing so they can plan for their retirement on their own is a problema, especially since we can not rely on Social Security checks to be sufficient for our retirement. Oh, and let's not forget how personal finance education is not a requirement in most public schools or even higher education institutions!

I'm glad you are focusing on increasing your financial literacy at 38 years old! It's never too late to learn something new so please take pride in your desire to learn more now. Yay, you!

One of the first things I want you to calculate is how on track you are with your retirement. You will need the following information:

  • Total amount of money you have in your 403B, Roth IRA and any other dinero you have designated for retirement
  • The amount you are contributing monthly towards retirement
  • Your expected monthly expenses at retirement
  • The age you want to retire
  • Your life expectancy
  • Investment Rate of Return

Once you have all that information, I want you to enter it in this calculator. You will get a retirement savings score which can help you determine how much more money you should aim to contribute towards retirement.

As for your questions, I actually have some for you first.

Is the $40,000 that the broker suggested you put in a taxable brokerage account money that you currently have in a savings account? Is this money separate from the cash you need for an emergency fund?

Assuming you already maxed out your Roth IRA for 2021 and 2022 and that you have a fully funded emergency fund, I agree that investing that $40,000 in a taxable brokerage account would be a great way to protect your dinero from inflation and invest for retirement.

However, 1.20% in fees?!? .... I don't like that. Yet, I have seen some fee schedules as high as 2%.

Though $480 in fees for one year on $40,000 doesn't seem like a lot. You can put that money in a Target Date Fund with an expense ratio of 0.12% and only pay $48 in fees. And you could even pay $12 in fees if you learn to create a Three Fund Portfolio and decide to rebalance it annually.

There is so much value in learning to invest your own dinero because it means you get to keep more of it!

But let's say you don't have the capacity to learn how to invest right now and you DO want someone else to manage your dinero, then I think you should verify that your financial professional is registered using this search tool. Read through any disclosures, which could be a red flag.

Next, review this this brochure titled "Ask Questions: Questions You Should Ask About Your Investments." Make sure to ask the questions on page 5 about the mutual fund using the Russell Balance Model Strategy.

You got this! You can create a financial plan to retire cuando quieres. It will require increasing your financial literacy and perhaps developing a different relationship with your dinero, but si se puede!

Sending you besos, abrazos, y mil pesos,


P.S. Use this link to register for my FREE webinar titled "The Four Steps to Investing." If you don't get a spot for Saturday, January 15th or Monday, January 24th, let me know so I can create a new time slot.

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