Tackling Adoption and Retirement Savings
Mya and her husband have goals to reach for retirement and adoption saving, and need Dave's help in tackling both.
QUESTION: Mya in Washington is in the middle of Baby Step 3 and has $5,000 saved. She and her husband want to adopt, but they don't have any retirement money saved and want to know how they can take care of that and the adoption funds. He will get some stock options in a few months. What advice does Dave give her?
Dave's ANSWER: I think the adoption is a quick, short-term goal. Also, the adoption is going to be way up there on the list of important things. I don't want to rob this money for a Roth IRA and then have to put off the adoption two more years.
I think you can start putting 15% of your household income into retirement monthly and then use those stock options to seed out your adoption account. I would knock the emergency fund out and then the adoption fund out, and then I'd move on to the other stuff. All the while, you put 15% of your income systematically into retirement.
There is a great book to get called Adopt Without Debt by Julie Gumm. She's a fan of ours who figured out how people overpay in the adoption process. There's a wide spectrum of things you can do to accomplish this goal without breaking the bank.
As soon as you knock your emergency fund out, use the stock options and anything else you can squeeze to knock the adoption fund out. Having 15% going into retirement is fine. Then move onto college funds and the house. You can circle back around and do more retirement later. And you will because you're being intentional with your money. The stuff's not just happening to you.