[Ursu]

Hive mind, searching for your input:
Situation:
53 yr old finacé who doesn’t have any retirement accounts besides a HYSA with about $3,000 in it.

He works as an independent contractor (1099):
approximate yearly income is about $48,000
no debt in a high cost of living, but our bills are very manageable.

He is actively saving for an emergency fund and travel fund.
He is about to receive about $14,000 for selling a property.

He is asking me how he should invest the money for retirement.

He would like it to accumulate growth and add to it weekly.
My first thought is a Roth, I am not familiar with Roth contribution rules for a 1099 worker, but I will be looking it up.

He is also weary of the stock market, but I think it is the best option for this late in the game.

For his situation, what would the HIVE recommend for the growth of this money that is about to come to him?

[Jay]

Roth IRA at one of the big brokerages and VOO or VTI 100% for me in this situation.

After a 3-6 month EF is built

[Megan]

As a 1099 he would also be eligible for a Solo 401k

[Ron]

What are his and your thoughts and plans in terms of retirement? Are they in synch? What retirement planning and preparation have you done for yourself up until now?

What are your and his respective Social Security projections?

When exactly do you think you and he are going to retire?

What do you think you need to retire as a couple?

While it is true that if you are lucky and the stock market cooperates, you (he) may find yourself with a not insignificant nest egg after 10 years of steady contributions, it’s really not a long time for the magic of compounding to work.

I think your expectations need to be realistic, particularly if you plan on continuing to live in a HCOL area and your retirement nest egg is not approaching enough to support you both living in this area.

If he still is wary of investing in stocks, that’s to me not a good sign of understanding of the approach, even though being wary of investing is pretty norma.

[Stef]

I would back check that he has been filing and reporting taxes. He needs to get legit if he has not been, and this money could be very helpful for that.

At his income level, Social Security will be an important part of his retirement, and that is based on taxes paid in.

[Rick]

Add Catching Up To FI podcast to his phone and encourage him to listen. There is a lot to learn for late starters including what to do and not to do.

[Author]

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