Yea, if you’re not sure if you will actually get your money back, that would be something to consider/weigh. It would make me more likely to put more into my Roth or other IRA I have full control over.
I agree, HImom. He just wants to get that employer match. Hopefully if things go south he can roll it over to Vanguard.
DD is contributing the amount to receive employer match. When she marries in July, she will assist her H in paying off his student loans. His family did not educate him on ‘financial peace’. His parents are relying on the dad’s gov’t pension and SS; they do own their home, so barring more major health care crises, they will do OK.
FSIL could have paid much more off on his student loans, but he chose to pay the minimums - now he is paying more. DD and H both enjoy experiences, and she is able to budget. He will learn and he is interested in learning. They are starting an exciting life together.
The time value of money can work for or against these young people. For those with student loans, paying them off is key. Even with student loans, IMHO it is good to take advantage of employer matching; just keep tightening the budget in other areas.
When H and I were young, we put the max into 401k, and had some other modest investments. We stumbled around a bit on understanding the best route to growing the funds, as well as stumbled around on things like life insurance. But we learned.
DDs appreciate the ‘jump start’ in financial knowledge they can learn from us. Both realize they have been given a gift of graduating college w/o debt.
How many parents have sacrificed some of their retirement funds (or delayed retirement) in order to provide a better start for their children?
Some ‘basics’ continue, while the landscape is ever changing. Landmines sprout up for each generation.
People are living longer - planning to live ‘better’ with QOL and not having the money run out.
^^ 401k money is pretty safe, regardless of how the company does, even if the CFO is in jail. Otoh, if it’s an option, don’t invest it in company stock.
Actually, busdriver, is your son getting regular 401(k) statements from his plan? If they are short on funds, employers can look longingly at those contributions as a source of short-term cash flow. Not remitting 401k deferrals is one of the few things that can incur criminal charges in EE benefit law. There are strict rules about when EE deferrals must be deposited just because of problems like that in the past. It’s not enough to see that the funds are coming out of his paycheck; he needs to see them going IN to his 401k investments.
Also will warn you that matches in a 401k are not guaranteed, unlike other types of plans. The exception is if the company is closely held and the plan is top-heavy, but this starts getting deep into the weeds. The main thing is to make sure your S’s money is where it’s supposed to be.
@SOSConcern, it’s kind of hard to decide if we have “sacrificed” retirement or delayed retirement for our kids. I think what we did is live beneath our means to make sure we could both fund college and save for retirement.
My H thought he was going to pay for his Daughter’s college bill by taking money from his retirement. I corrected that mentality early, and he thanks me often for that. We made the joint decision saving for college was one of our highest priorities, as was saving for retirement. When he turned 50, I also told him he “had to” put in the extra you’re allowed to contribute to retirement. He said that would be too hard for him, but after some negotiation he agreed to try. He’s now been doing it for 6 years. Our 3 kids graduated (or will graduate in 1 case) debt free, and we will be able to retire with the next 3-5 years, so I think we did well enough.
Thank you for that advice, CountingDown, I will ask him.
We had put in funds early and had the kids late (although 401k wasn’t widely available or available to us until late 1980’s?); when my job ended I became SAHM, but at that point I had $100k in my 401k for the working years in the 1990’s. H’s had considerably more, and we had other investments. We did see some up and down with equities, but held the course and it paid off.
Would have paid off our home in 12 1/2 years if we had continued with two incomes; instead when interest rates dropped, we took cash home equity out to get us through some years under one income. Always refinanced with 15 year, and the latest with 2.5% interest rate, almost no closing costs, and with only 10 remaining years.
When H’s salary wasn’t going up and bonuses either ended or were tiny, we had to cut back on 401k contribution with increasing expenses and my stage III cancer (which thankfully I survived). We were fortunate to have paid in on a prepaid college fund for both DDs when we both were employed - that paid about 1/3 of total instate expenses for each (both went away to school, so their costs included Room and Board). Had we not had the funds, they could have completed college locally, with scholarship and no room and board costs. However they got a better education at the schools they went to (greater opportunities in their majors among other opportunities).
Everyone gets bumps in the road. Unexpected stuff that pulls the rug from under you.
Meeting with our financial guy recently, found out we can comfortably continue to live in our home w/o needing to downsize any time soon. I thought we would downsize to use the cash for investing (getting a less expensive place). However just one portion of our investments gained more than H’s last year salary; 401k continuing to do well with 7.03% gain since 1/1. And the funds are not behaving traditionally either - the markets/funds are not always so straightforward predictable. I diversified among 4 funds instead of 2 in order to capture wherever the most gain would be.
Anyone that has kids has made sacrifices of time/energy/money. Some people do value some things more than others, so some are willing to work some extra years, delay car purchase, take fewer vacations or do more budget friendly travel, etc so their student can take better advantage of some educational experiences.
Well, we finally are getting close to paying off our debt (sans mortgage), just a couple of months left. Hallelujah! Now with whatever is left from our monthly paycheck, we’re thinking about dividing it three ways. 20% stuff that we’ve been putting off (like a nice bike for my husband, a drawer full of nothing but matching socks for me), 40% early mortgage payoff (can cut it in half, I think), and 40% towards saving for a boat.
I’m thinking with the boat savings, that I don’t want to have it just sitting in our checking account or a low interest rate vehicle, but something more aggressive. It should be liquid, but the reality is, we don’t know for sure if or when we’ll use it. For all I know we could change our minds or it could take ten years to get the boat, and I would hate to have that money sitting there, doing nothing. We have access to low interest rate loans, so it’s not a big deal if the market crashed and we have to wait for recovery, plus it’s a “want to have”, not a “need to have” item.
Does anyone have any suggestions? I’m thinking of just doing a Vanguard ETF, not moving it around so we have to pay short term gains, but leaving it alone to get the long term capital gains tax rate when we take it out.
Q: What’s the definition of boat?
A: A hole in the water you throw money into
Q: What does BOAT stand for?
A: Bust Out Another Thousand
Q: What is having a boat like?
A: A life sentence with a $500,000 fine
I don’t have any advice for you, just wanted to use my boat jokes. 
Funny, I hadn’t heard those. Just what are the two happiest days of your life? The day you buy your boat, and the day you sell your boat. 
We have had a little ski boat for maybe 13 years, and have definitely gotten a lot of usage out of it. We were thinking about getting the mega boat because we get boat fever every time we go to a boat show, but we have toned it down significantly. Some friends of ours bought a brand new million dollar Grand Banks, but are trying to sell it because they haven’t had time to use it. That is a serious money pit.
I’m now 56. I’ve saved about 2/3 of my after-tax income for over 30 years by living frugally and investing wisely. Kids college is paid for, as are house and cars. (DD1 graduated last year; DD2 starts college in the fall and I have an 11 YO.)
I’m thinking about getting off the corporate merry-go-round next year to teach full time.
@busdriver11 , years and years ago I needlepointeted the “hole in the water” quote with a picture of my parents’ boat as a Father’s Day present. He laughed.
Before you buy a big boat, look into moorage, insurance, etc. maybe your big boat fix could be had with a rental for the summer. Unless you or hubby are looking for motors to tend, hulls to survey, something or other about zincs, , teaks to oil, and just a heck of a lot of time to fill. My dad was happy to do all of these things, most folks aren’t.
Funny! Good thing he laughed instead of cried! I think we can get into the swing of boat ownership, but not in a serious way until we retire. It’s too hard to be gone from home, come home and look forward to going on yet another trip. We were mesmerized by those new 50 footers, and then we thought, what are we doing? We won’t even have much time to use it, and then we’d be thinking about that expensive toy that we wasted our money on. We would be better off starting with a much cheaper, older, 36-38 footer. Insurance would be fairly low, moorage is free, and we’d mostly be spending money on gas and wine. My husband is a real do it yourselfer, and I probably wouldn’t mind getting sucked into it too.
Friend of mine has a 50’ sailboat that he spends 3 or 4 months a year on. A large number of his facebook posts are about what broke on his boat, what he is fixing on his boat, complaints about the weather in whatever tropical paradise he is in, and how much money it all costs (he retired in his 40’s as a multi-millionaire, which makes his money complaints simultaneously amusing and irritating).
This winter the mast got hit by lightning and pretty much fried anything inside with a wire - all the electronics, nav system, autopilot, generator, refrigeration, water maker, pumps, you name it. The bill to replace everything will be around $50K, and lucky for him there was no mast or other damage, or the price would be double at least (it’s apparently not uncommon for lightning to melt the mast or even blow a hole in the boat as it exits, or set the boat on fire). Fortunately his insurance will cover most of it, but it will take months of work to get everything ordered, shipped, and installed. And his big pile of spare parts is now worthless, because none of the new stuff will be the same as the old stuff.
So while it’s “on the hard” as the boaters say, he is having the whole thing gel-coated/painted/whatever you call it. That will probably cost more than it would to paint my entire house.
Wow, what a pain in the butt. Hard to feel sorry for the money problems of the retired in their 40’s crowd, however, maybe he’s realizing he retired a little too early to keep living well. At least he had insurance.
Probably better than owning a boat is having a friend who owns a boat. That way you can enjoy it, and they can pay for it.
He doesn’t have any money problems, his net worth is low 8 figures. He can be a bit on the cheap/frugal side though. It’s like spending money causes him actual pain. I guess that’s how you stay rich.
On one hand that’s a good trait, to not be a spendthrift, and to carefully watch your money and not blow it all.
However, on the other hand, it’s kind of sad that someone could get to that point and not be able to truly enjoy the fruits of their labor. I hope to stay somewhere between those two extremes, however, I’m still not sure of where we should be, no matter how many calculators I run, because I could “what if” forever!
well, if he has a big, expensive sailboat, he isn’t too much of a joyless miser. 
It might not be that expensive if he bought an older sailboat. And he’s saving a lot on fuel and using it quite a bit. But yeah, it does sound like he’s spending some of his money, though miserable about it.