Planning Path Toward Retiring
Q I am 42, single, with no children and no debts. Last year, I made $23,000 without benefits doing part-time work. I earned another $5,000 from my one-person business. I have $2,000 in savings, a Roth IRA worth $2,666, and $7,500 in a 401(k) plan from a prior job. I've read that a person my age should invest $162 monthly for retirement. How can I use what little I have wisely?
A For starters, roll the $2,000 in savings into a high-yielding money market account, says David Bendix, president of Bendix Financial Group, Uniondale, N.Y.
Then, roll the 401(k) money into an IRA to give you more personal control over your options, says Mr. Bendix.
You will have to first roll it into a traditional IRA, then convert it to a Roth. Be sure you stress growth stocks in your IRA account, to give you the highest possible appreciation.
Finally, build your cash liquidity, Bendix says. Create an emergency fund equal to six months of living expenses. Once you've done that, resume contributing to your Roth IRA.
Q I'd like to know how much interest I've paid on a student loan since 1989. I would also like to know how much interest is included in the current monthly payments. Yet, when I called the bank holding our loan paper (originally Chemical Bank, currently SallieMae), the operator seemed reluctant to answer the inquiry. How can I get this data?
A "That is the most asked question we get," says Marianna O'Brien, a spokeswoman for SallieMae, the Student Loan Marketing Association, a government-chartered, publicly owned corporation in Washington.
Institutions dealing with student loans always maintain detailed financial records.
To get your data, call a SallieMae at 888-272-5543. If a customer-service representative can't help you, ask for a supervisor. If that doesn't work, call the head supervisor's office at 717-821-3647, says Ms. O'Brien.
Questions about finances? Write:
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