Should I diversify?
Hi guys it’s me :) so I’m currently at pay rate 1 of an electrician. This is $20 an hour at 40 hours a week ( I actually only work 5 6 hour shifts though :)) so my gross yearly is $41600. I’m currently 17 living with 2 roommates and pay $500 a month for everything. No car because work is closer. A KILLER insurance plan is included. Like I think it’s called PPO by blue cross. I technically pay $20000 a year for it but it’s out my package so I don’t really pay for it. I also have $10.58 from my package put into an annuity every hour. I’m currently taking home about $630 a week. Through my 4 year apprenticeship I will end up making $58.47 per hour. (Will probably be higher after new contract but that is assuming nothing changes). I have an option to put as much as I want into my annuity on top of the hourly but I guess my question is should I keep maxing my roth separately (balance of around 10k) or roll it over into my annuity and just put an extra 5500 into it every year. Also where should I be putting money for my down payment on a house until I need it? Sorry for the abysmal grammar but I love you guys thanks
Posted Jul 9, 2019, 1:53 PM UTC
I'm also a sparky and I've been looking into my retirement recently. I'm assuming you are IBEW, like me. First off, are you positive that you have an annuity? I was told that's what I had but after some digging I found out what I actually have is a "defined contribution benefit with a 401k option". What that means is that the hourly rate that's in my package is considered an "employer contribution". Because mine has the 401k option I can add up to 19k of my own pre-tax dollars to the fund. Does that sound similar?
If so, I suggest putting as much as you can (check for limits) towards that retirement account. As for your housing savings, you should use a HYSA.
I have been a sparky for 12+ years and my only regret is not dedicating more to retirement sooner.
Edit: clarification
100% sure it’s an annuity. Talked to 5+ journeymen about it. Even had the talk with the prudential guy. They’re telling me I can basically put anything I want in. He didn’t make it crystal clear as to whether the contribution would be pretax but I got the feeling it was not. And yeah I’m IBEW :) and when you say put as much as you can towards retirement that just means put as much in the annuity as possible right? And does ally sound good as an HYSA?
Not knowing specifically how your annuity works, I am reluctant to offer advice on that. Hopefully, someone on here can offer something great. For what it's worth, my BA, of all people, told me we had an annuity. I still suggest to do your own research. It's my understanding that annuity plans are offered by insurance companies and you're buying a guaranteed set income in retirement. Someone correct me if that's wrong, please.
I use Ally and I've had no complaints so far. There are other HYSA that offer a bit higher yield though.
Ok for sure I will hit the books on that. Sorry if I came off as like a intellectual or something obv you have 12 more years exp than I. :) and yes I want as much advice as possible <3
You're good. Sorry I couldn't be more help. I'm sure someone on this wonderful sub can be of more assistance.