How much money should I be putting into my 403B?

Question

I am 42 yrs old and a RN. I live in a home which is paid for and I still have 1 child at home. He is 21 and going to jounior college. I still have about $6000. in credit card debt from trying to pay for my daughter who moved out. I make about $60,000. a year.
I am considering buying some CD's and other investments. If you know what would be a good investment, please tell me.
I am single and not planning to marry. I do not know anything about investing. Help! I put $300 a month into a credit union savings account.

Answer 1

Ideally, you should at least contribute up to what your company matches for your 403B. That money is saved tax-deferred. That means you don't pay taxes on it until you start drawing it out after retirement. That also means you don't report it as income when you do your taxes. The matching funds are free money. It's 100 percent interest on your investment. After contributing up to your companys' matching then open an roth IRA. It allows to to pay the taxes now and the money grows tax free. For a Roth you can only save 4k each year. That may be increasing to 5K next year. Take advantage of all the tax-deferred and pretax savings you can first.
Oh yeah, stop the savings account and pay off those credit cards. Make sure you have 1-2 k saved first in case life happens. Any interest you are getting from the savings account is being eaten up by credit card interest. In fact, pay off the credit cards before even investing. Believe it or not, with your income you have plenty of time to plan for retirement IF YOU START IN EARNEST WITHIN THE NEXT YEAR OR TWO.

Answer 2

What about Roth IRA's or regular IRA's? That will be for retirement. if you employer matches at all, take full advantage of whatever retirement plan you have at work. When an employer matches, that is like free money! Maybe it's only 50 cents for every one of your dollars, but still, that is really good for an investment in your future. Then pay down that credit card debt as soon as you can, but invest for yourself, too.

Answer 3

It depends on what you want to accomplish with your investments. With interest rates being down, CD's are not that good of an investment. I would suggest putting your money in a good no load mutual fund. The fund will put your money in with others and use the pool to diversify your investments. You can check their track records for growth. With the mutual fund you can put in a lump sum and contribute monthly, if you wish. Most mutual funds are fairly safe since investments are usually diversified in a wide range of investment vehicles. Before starting your investing, it might be better for you to pay off your credit card debt, since rates are usually high.