Levi Sanchez worked in the Wealth Management industry for 3 years at Merrill Lynch as a junior adviser for a team managing nearly half a billion in personal assets. In May of 2017, he decided to depart the wirehouse world and begin his journey to launching an RIA focused on young professionals, whose financial futures can be shaped now. Having control over his own fee structure and marketing techniques would allow Levi to pursue his goal of helping his generation solve their financial problems and build a better future.
The lack of financial education throughout all generations has always been a weakness in our educational system. Making matters worse, the industry caters to individuals with significant wealth over people with little assets in comparison. The end result, on average, young adults don’t establish healthy saving, investing, and debt management habits. Even though that’s the best possible time for these habits to be learned. Therefore, Levi decided to leave the business and start the journey towards launching Millennial Wealth and tackling his goal of educating, investing, and planning for his peer’s futures.
Levi grew up in Eastern Washington and attended Washington State University. He's always had a passion for investing and learning about money. In his free time, he enjoys playing golf, basketball and watching the latest shows on Netflix.
Millennial Wealth is an Investment Adviser registered with the State of Washington. This communication is not intended as an offer or solicitation to buy, hold or sell any financial instrument or investment advisory services. We do not guarantee the accuracy or the completeness of any description of securities, markets or developments mentioned. The information provided is subject to change without notice.
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The quick answer is no. The contribution limit does not reset for 2017. You are only allowed to contribute a maximum of $5500 across ALL your Roth IRA and IRA accounts. If you're unsure what you've contributed in 2017, just give American Funds a call and they should be able to find that information for you. Typically, monthly statements also provide that information.
You have until the tax filing deadline for 2017 (April 17th), to make contributions to your Roth. However, if you have already maxed it out, you are eligible to make contributions towards your 2018 limit.
Hope that helps.
You're spot on in your thinking. You're working towards multiple goals simultaneously (retirement savings, paying off debt, and establishing an emergency fund). That's not typical of for someone your age, I commend you!
Due to the fact you have a stable living situation at home with your parents, and your job is stable, you should be fine using your emergency fund towards eliminating your student loan debt. Keeping 2k as a buffer "just in case" makes sense as well. You'll have the student loans paid off in roughly 6 paychecks afterward.
Once the student loans are gone, you'll have an additional 400 per paycheck in cash flow. Use most of that to rebuild your emergency fund (typically suggest 3-6 months worth of living expenses). The remainder can be used towards upping your payments on your car loan.
I know most of this is reiterating what you've already said, but that should feel good knowing your thought process is right on track and should be proud of how much you're already putting away! Compound interest, coupled with a long time horizon will work it's magic for you!
"Financial Advisor" can be used in several different job descriptions in our industry. It's unfortunate we haven't done a better job of distinguishing the differences. For example, an insurance agent who happens to also do "financial planning" may refer to themselves as a financial advisor. But in reality, they're a salesperson.
The key to finding a true fiduciary advisor is working with one that limits there conflicts of interest to the bare minimum. Meaning they don't SELL products, only their advice, and guidance through financial planning. These types of advisors are referred to as FEE-ONLY advisors. In the case of the insurance agent, he/she may be a great financial planner as well, however, they will always have a potential conflict of interest due to the fact they are able to sell insurance and receive a commission from it. In order to eliminate that conflict, a fiduciary advisor only "sells" their advice and would refer their client to a insurance provider they know and trust, but who offers no kickbacks or commissions as a result.
In addition, certifications such as the CFP (certified financial planner) requires continuing education for advisors who hold the designation. It's become an industry standard for advisors offering financial planning and advice.
A great resource for getting started on your search is to use the website Napfa.org. They provide a directory of fee-only financial advisors.
Best of luck,
It's great that you've begun to think long-term about your financial security. The earlier the better!
In regards to your pension, that's great you've found a company you want to work for until retirement. However, a lot can change between now and when you retire. It sounds like you have the mindset to save and invest and not necessarily only rely on your pension which is great. Keep in mind Roth contributions can only occur up until a certain income limit. There are a few other options if you want to keep contributing to an after-tax account like a Roth. Your employer may offer a Roth 401(k), which you'd be able to contribute all the way up to 18.5k in 2018. You could also look into a "backdoor roth" strategy. I'm not sure when you'll cross the income limit, but those are two things to think about if you are nearing that decision and want to grow an after-tax account.
To answer your original question, it's hard to give a definitive answer without knowing what your short-term goals may be? Do you want to buy a home in the near future? If that's the case, growing your investments in a taxable account, or accumulating cash may be in your best interest. If your goal is to put more away for retirement, then certainly increasing your 401(k) contributions would be the way to go. As you suggest, working towards multiple financial goals is commonplace, and shouldn't be done linearly. You can save more in your 401(k) AND put away savings for shorter term goals. At that point, it just comes down to prioritizing.
You are correct, a 529 plan would only allow for money to be used for qualified education expenses, otherwise, a 10% penalty is assessed on the withdrawal amount. One interesting note, however, is 529 withdrawals aren't assessed the penalty if the beneficiary receives a scholarship.
If you'd like your daughter to have the flexibility to spend the money on other things, not just for her education, you should consider a custodial account such as an UTMA/UGMA. A custodial account would allow you to retain control until the age of majority (depending on state 18 or 21 typically), at which time she will receive full control. This type of account would allow you to select investments such as a low-cost index fund. I would suggest looking at Vanguard, you can also open a custodial account directly through them.
I do advise you to understand that this account gives your daughter FULL control at the age of majority. Unfortunately, most individuals aren't financially savvy at that age since financial literacy isn't taught in school. Open communication regarding the intention of the account and responsibility is key.