Moving out of state in 5 years. I need advice.

**bjl584** · 01-30-2014, 09:30 AM

You want to just keep the money in cash accounts or in CD's for now. You will most likely need most of it once you get out of school for a car, and apartment, furniture, etc.

Do you have a job? If you do, you can start a Roth IRA and start putting a set amount into it monthly. You could buy into a target fund within it to take some of the guess work out of things.

**dewisthylewis** · 01-30-2014, 09:54 AM

Thanks. I do have a job but it is low income. My work offers 403b retirement fund which I currently invest 5 percent of my paycheck into. The 403b is for my retirement, so, I do not want to withdraw from it. Also, I have my own apartment right now, but no car. I ride the bus to save money. Is a cash account a savings account from the bank? I looked into target funds and am still confused at how they work. I read that CD's often times do not beat inflation rates and that if I am saving over 5 years I should consider mutual funds. What do you think?

Thanks again.
-Dewisthylewis

**bjl584** · 01-30-2014, 10:39 AM

A cash account can be a savings account at a bank or a Money Market account. The rates at either of those or on a CD are not going to beat inflation right now, as interest rates are near non existent.

Target funds are mutual funds. Basically they are designed to become more and more conservative as time goes by as you approach retirement.

My line of thinking is that you need to keep some cash on hand. Don't save everything as cash, but you need to keep at least 3 months worth of expenses as cash (emergency fund.) Plus, you will want to save more cash if you plan to buy a house, a car, etc. in the future.

**dewisthylewis** · 01-30-2014, 10:56 AM

Thanks so much for the information. I will consider everything you said and do more research.

Take care
-Dewisthylewis

**snafu** · 01-30-2014, 05:47 PM

Good idea to have future goals and make plans to get there. I'm hoping you are not using a credit card to make up money shortfalls which cause you to pay interest.

Do you get any matching sum from employer for your 403b and what specifically do you hold in that account?
How much do you believe you'll need to move to another state? Have you chosen a locale because they need nurses or because you have an emotional attachment? Do you anticipate an easy job search using your professional organization, university placement assistance, LinkedIn or electronic placement, headhunter or? Is it charge a ticket and fly, paying the bill over 3 months with paycheques? Will you need your savings to pay day-to-day expenses while hoping for a job? Would you do better concentrating on amassing moving money to the detriment of adding to retirement?

What accommodation do you anticipate? Rent with roomies until you've settled in and familiar with all the choices. That gives you additional time to amass funds for 1st, last & damage deposit, utility deposits, basic furnishings etc. Alternatively, use those savings/invest to mostly pay for a car and drive NW.

Most Mutual Funds require something like $ 500. - $ 1,000. to open an account. To get to your goal it's helpful to make automatic, monthly contributions called 'Dollar Cost Averaging' {DCA]. It's effective as it allows you to buy more units when price is lower, fewer units when prices spike. The single most important factors are no cost/ low cost plan and low Management Expense Ratio [MER}.

You might notice we often recommend Vanguard Index Fund and you can use that as a standard to measure choices. An Index Fund needs a 5 year window to grow and withstand the gyrations of the equity market. Right now savings instruments are too low to match inflation. Bond funds are high risk because if interest rates creep up, Bonds will fall and be worth less per unit that you initially paid. A modest prognosis suggests 60 contributions over 5 years + original opening sum requirement making a profit of 7% per year with dividends re-invested.

Big challenge for big goal Wishing you the best.

**dewisthylewis** · 02-02-2014, 10:39 AM

Thanks for the advice. I plan to move to the Northwest for a change of scenery. I have always wanted to live there. I believe with a bachelors in nursing I will be able to find a job there. Nursing is a a high demand career. As of now I am going to continue living with my fiance, saving money, and studying. When we do make the move, we will load up U-Hauls with our belongings. My goal would be to have 6 months rent paid up front at an apartment. Investing sounds dangerous... I do not like the idea of losing my savings if the market crashes. Personally, I think it would be better to move than to invest more in my retirement.

-Dewisthylewis

**snafu** · 02-03-2014, 11:04 AM

Renting a U Haul for a one way, cross country trip is surprisingly expensive. I suggest you continue to re-evaluate possession, and opt for gently used furnishings and appliance that can be re-sold before the move. Try to keep it to clothes and personal effects that would fit in the back of your car.

An online savings account would be ideal for automatic transfers every payday to amass sufficient funds to fund 6 months rent, utility deposit, food and living expenses until you and fiance acquire the jobs you desire and get your first pays. COLA in beautiful PNW may be higher than you realize.

**dewisthylewis** · 02-04-2014, 10:03 AM

I like the idea of an online savings account specified for a moving fund. Thanks for the advice. Snafu, what do you mean by "COLA in beautiful PNW may be higher than you realize."
Have a blessed day
-Dewisthylewis

**snafu** · 02-04-2014, 08:09 PM

Cost Of Living in Pacific North West is more expensive than in some other states. Rent for apartment, sales tax, transportation, electricity and stuff can be more expensive than you are currently paying.

Moving out of state in 5 years. I need advice.