The Office for Financial Success Saving Retirement Investing What to look for when investing Types of investments
A service of the Department of Personal Financial Planning Mission: To improve the financial lives of individuals and the advice they receive We provide one-on-one counseling sessions as well as group workshops & seminars › Major Topics include: Budgeting Credit/Debt repayment Student loans Taxes
Student Financial Counselors 100% Confidentiality Professionally Trained Free to MU students Non-biased information www.financialsuccess.missouri.edu www.financialsuccess.missouri.edu
FREE TAX PREPARATION! VITA (Volunteer Income Tax Assistance) The College of Human Environmental Sciences
Our office is located in the basement of Stanley Hall – Room 61
What about emergencies? Emergency Savings Ultimate goal: 3-6 months expenses Current goal: $1000 Keep it in a liquid account Savings
Covers known, but irregular expenses › Car registration; holidays; insurance Total: $1945 /12 = $165 month May want to include extra – weddings, baby showers, etc. JanuaryFebruaryMarchApril MayJuneJulyAugust SeptemberOctoberNovemberDecember B-day $30Anniversary $100B-day $50 Vacation $750 Car Registration $215 Christmas $800
Retirement 410 K vs. Roth IRA 401 K - Employer sponsored retirement plan Roth IRA - Individual Retirement Account (IRA) How you get it: 401K - from your employer Roth IRA - you open with a broker dealer Contribution amounts 401K - allows for large amounts of investment Roth IRA - only allow for $5,000-$6000 investments per year Matching 401K - Some employers offer to match a certain amount of your investments Roth IRA - No matching option
Investment Options 401K - You can only invest in what the employer offers Roth IRA - you have more control over what you choose to invest in Tax 401K - Employer invests money before tax so you must pay tax at withdrawal Roth IRA - You have already paid taxes on income so there is no tax paid at withdrawal Distribution 401K - requires distribution at age 70 1/2. (money can be rolled over into Roth IRA if you do not want the distribution) Roth IRA - no required distribution. It can be left for next generation. Retirement 410 K vs. Roth IRA Cont.
Things to consider when investing Age Young with a steady income can handle more risk Older with a fixed income cannot afford to lose a large amount of money Goals Saving for your child’s education? Saving for down payment on home? Saving for retirement? Other Risks Are you a small business owner? You can’t afford too much risk Does your spouse agree?
Types of Investments Diversify!!!! If all your money is in one place you could easily lose it all Spread your money in different industries, types of investments, types of risk Bonds Purchasing the company’s debt Priority for payback means less risk Pay a fixed amount Can receive periodic payments Not very liquid Stocks Purchasing part of the company (you are an owner) You get paid last and hold more risk You have an opportunity to receive high dividends Can receive periodic payments Not very liquid
Types of Investments Mutual Funds Investing with a group Allows you to receive a diverse portfolio cheaper Decreases risk Liquid Real estate Tangible Little to no inflation risk Not liquid Insurance Whole Life Allows you to build savings into insurance plan Somewhat liquid
FINPLN 1183 – Financial Success › 1 hour online course › Covers basic financial information – student loans, credit, budgeting, etc. FINPLN 2183 – Personal & Family Finance › 3 hour course › Goes into detail on budgeting, credit, major purchases, personal income taxes, etc. FINPLN 4483 – Financial Survival › 1 hour online course › Covers information needed to survive in the work-world – employee benefits, debt repayment, purchasing a home, etc.
Set up appointment via Website › http://financialsuccess.missouri.edu