Reply to How to start financial planning at 50?

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[quote=Anonymous]1. Absent a true crisis/medical reason you need to cut off your 24 year old now. You don’t have enough cushion to adequately save for your own retirement and continue to support them and by doing so you are setting up the grounds for a situation where your older more financially responsible child may end up feeling pressured to subsidize you in your old age and resent both their sibling and you.

If you have an extra bedroom in the main part of your home they can temporarily stay in, fine (though they should at minimum kick in some money for utilities) but by no means should you let them use the otherwise rent generating apartment for free or give them additional financial assistance.

2. Reserve ~1 years worth of basic expenses in your high yield savings account and immediately start transferring the remainder + the 400k cash into the S&P 500 (if you’re so inclined you can mix in some other funds, but probably best to keep it simple). Max out a Roth IRA for this/next year and then put the remainder in a brokerage account. Fidelity and Vanguard are good low fee options. Use dollar cost averaging to spread the investments out over a year or so.

3. Set up a 401k with whatever company you end up working at and try to contribute the max (current 23,500) each year. Hopefully they will also have some kind of match.

If you invest the initial ~$475k now and max out 401k contributions from now until 65 you’ll be on track to have ~2 million in retirement which allows for a safe 80k withdrawal/year. Coupled with a paid off home and some potential rental income you should be in good shape.  (Obviously that assumes you’ll be able to stay gainfully employed at a decent salary until 65, which is by no means a guarantee, so the more you can invest in these earlier years the better.)[/quote]

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