Thank You, Ex is a series of essays about the good things we were gifted by exes and kept.
I don’t think I’ve ever written something so practical and unsexy about a relationship, but I’m here to say that I am forever grateful to my ex who taught me what a Roth IRA is, convinced me to open one, and encouraged me to start putting away money toward my retirement fund ASAP. We did not last as a romantic connection, but her straightforward life advice helped me in both a materially beneficial way and also in a “okay I can pinpoint this moment as one where I’m growing up and learning a thing” kind of way.
When I was 25, I started dating a babe who was about eight years older than me. She had her shit together in a lot of ways that I did not. When we met, I was living on a lesbian commune in a tent (lol) and she was the tech director at a big company based out of California. I was going through a romantic breakup, multiple friend breakups, and a general crisis of confidence in queer community, and she had grown up in Portland, lived her entire life there, had strong ties to community and an equally strong acceptance of the conflict that can arise amongst people who love each other. I was questioning if polyamory was right for me and she’d been wrestling with that question for more than a decade. And, most relevantly for this particular essay, I was very into spending money I had in the moment and not worrying about the future whereas she had been saving for retirement for years.
Or I should say, I was not thinking about my finances for the future until one specific conversation I had with my ex and her best friend. They were both the same age, and they both had impressive full-time jobs. Meanwhile, I was nannying part time and trying to figure out how to freelance successfully. My dad had always encouraged me to open a retirement savings account, but I’d rolled my eyes. Getting older felt far away. I was literally paid in cash every week by my nanny families. My rent was cheap, and I felt like I had More Than Enough.
The three of us, my ex, her best friend, and me, decided to take a road trip in late August, and found ourselves next to a fucking gorgeous lake in Glacier National Park one afternoon when the two of them started comparing their contributions to their Roth IRAs. I had nothing to contribute to the conversation; I was clueless.
A Roth IRA is an Individual Retirement Account to which you contribute after-tax dollars. While there are no current-year tax benefits, your contributions and earnings can grow tax-free, and you can withdraw them tax-free and penalty free after age 59½ and once the account has been open for five years. (Yes I did take that directly from the Charles Schwab website.) I feel embarrassed to share this now, but I was genuinely so shocked to learn they each had accounts like this. I remember thinking — I thought we didn’t believe in big banking! I thought we wanted to say fuck you to The Man! I always thought of my ex as more radical than I was — why was she investing her money in a Roth IRA?
Bless my ex, and her bestie, because they both patiently explained why actually, there’s nothing punk rock about not taking care of your future self if you have the means to. They’d both grown up with significantly less financial privilege than I had, and I think they were both a little unimpressed with my ignorance. And that’s fair. When you’ve never worried about having enough money growing up, it might not occur to you to save for the future, and it’s a huge privilege to have that mindset. They helped me realize that and unpack it, and they also helped me with the practical next step: I opened up my own Roth IRA and started making tiny contributions.
You can contribute $6000 total to a Roth IRA over the course of a tax year, which breaks down to $500/month if you want to max it out. I couldn’t imagine ever having that much extra income to invest when they taught me about this specific retirement savings account, and frankly, almost ten years later, I still can’t. I just don’t make enough money for that to be realistic. But they encouraged me to put away whatever I could, and I started out with $50/month and a few years later bumped it up to $100/month. That’s where I’m still at, though I do try to put extra money in at the end of every tax year. Every little bit counts, and like my ex taught me, saving to take care of my future self is both an act of self love and community care. The more okay I am in the future, the more I’ll be able to use my resources to help others. I do feel dumb that it took me 25 years on this planet to learn that, but we don’t know what we don’t know. Thanks to my ex, I learned.
Great read! My ex taught me to budget in a fun color-coded excel spreadsheet.
It is so important to talk about money and financial planning! For a while several college friends and I compared where and how we were investing. I learned about Target Retirement accounts, which invest money more conservatively as you get older.
Good for you Vanessa. If you can manage it, investing in your 20s is a fantastic idea.
Just a bit more info that others might find helpful: For 2023, the maximum amount has increased to $6500 a year. If you are over 50, you can invest up to $7500 a year. You can only invest in ROTHs if your income is less than $138K a year if single and less than $218K a year if married and filing jointly.
The big benefit of a ROTH is that you can invest when your tax bill is low and then the money grows tax-free. When you pull it out, you don’t have to worry about taxes at all. If you use a regular IRA, you will be paying taxes on the growth which can really cut into your savings.
The downside is that you can’t access your money until you are 59.5 years old. If you do need to withdraw, there will be a penalty. However, there are exceptions to the early withdrawal penalty, such as a first-time home purchase, college expenses, and birth or adoption expenses.
If you are investing in a 401K or 403b through work, that is great as well. Always get the ‘match’ if your employer offers it. These accounts are ‘pre-tax’. This means the money doesn’t count as income earned that year and this lowers your income and your tax bill. However, you will need to pay taxes on the money when you take it out in retirement. Ideally, you would like to have both a 401K through your work, if you are blessed with a job that offers one, and a ROTH IRA.
YES so glad to have this convo Vanessa! it’s a vulnerable thing to talk about on the interwebs. For anyone who is interested, I’m gonna info dump on ways to invest money for one’s future self away from Wall Street and INTO Main Street, affordable housing, small businesses, and community controlled funds here in a reply to myself. . .
What follows is all US-specific. I am learning how to save for future me with retirement tax benefits, where money is available for regular people like me in the meantime, instead of Wall Street Corporations. It’s a work in progress, but I’m gonna share what I’ve learned so far in case someone here wants to join me in learning about alternatives.
Some Credit Unions offer IRA accounts where the money is in Certificates of Deposit. This way it’s insured (up to $250k) like a bank savings account (and unlike stocks). The interest rates on these IRA CD’s right now at Self Help Credit Union are more than 4%: https://www.self-help.org/personal/join-us/join-shcu. Self Help CU has radical roots and continues to fund affordable housing and cooperatives, etc. They are a Community Development Financial Insitution (CDFI) which means they are committed to, and required by law, to loan to people historically shut out of banking, often people of color. You can bank with them nationally online and they have branches in the South. A sibling credit union (confusingly named Self Help Federal Credit Union) has branches on the West Coast, and loans to very rad efforts in California. They do cool stuff, like a a savings plan that also helps ppl build their credit scores. Alliant Credit Union is much more white/mainstream and not a CDFI, but nationally available and has 4%+ IRA CDs. At Alliant, the funds are still going to mortgages, auto loans, and small biz rather than corporations, just a whiter population than Self Help CU/Self Help Federal CU.
If you are a person comfortable navigating paperwork, you can also open a Self Directed IRA. These are marketed to super duper rich people, but you don’t have to have a lot of money to use them, just some determination and savvy. E.g. https://midlandtrust.com has sliding fees. If you open a Self Directed IRA, you can invest your retirement dollars in things like https://communityvisionca.org, which then invests in efforts like https://realpeoplesfund.org. You can invest in East Bay Permanent Real Estate Cooperative (https://ebprec.org) which is Black & Indigenous led. [side note you can also invest any non-retirement $1000 or more into EBPREC from 24 states + DC and counting].
The interest rates advertised are lower for these options than advertised for Wall Street. Personally, I think the efforts that make the most visible and easily accessible retirement savings options funnel our money to Wall Street are bad options. They are held up by propoganda telling us the stock market has ‘always gone up’ (since the Depression) – before that, it was constantly going up and down. Having millions and millions of people’s retirement in Wall Street ties up our own future security creates political will to prop up Wall Street at all costs. Those costs are continued efforts to bust unions, lobby the government for heinous policies, defund schools and healthcare, steal land, militarize police and surveil citizens, on and on and on. While most people’s individual amount of money won’t move the dial via DIvestment, if you have the energy and access to invest in alternatives, it makes a real difference via INvestment. $10k off of Wall Street is NBD but $10k loaned to a family for an affordable car loan so they can drive to work is a big deal. As more people move money off of wallstreet back to main street, main street gains power and can invest in the infrastructure to make investing in main street (Credit Unions, community controlled loan funds, etc) more accessible to more and more people.
thenextegg.org (a super queer effort itself) is a work in progress that has more info, including links to youtube videos.
this is wonderful! thank you! I’ve been looking for some of these resources but not finding what I want, or finding CUs only with modest interest rates (2.5-3) compared to all the 4 and ups out there.
thank you so much!
This is really cool! Kind of a longshot but just throwing it out there that if any Canadians want to point out any equivalents we have here, or even just places to get started reading-wise, I’d be grateful!
Thanks so much for this info. I was looking for community investments and was having a tough time finding ones in my area, but my state is one of the eligible ones for EBPREC, woohoo!
Hell yeah!!! v excited for you & EBPREC!
more background info that was an ‘aha’ for me – community investments are hard to access because they have a very difficult time getting SEC (as in The Securities & Exchange Commision in DC) approval to recieve investments. EBPREC made it thru that approval process, and the more momentum EBPREC gets, the more likely it is other funds like it [e.g. Willow PREC in MA] will get approval. Black Farmers Fund also can accept investments from CT, FL, HI, IL, ME, MA, NJ, NY, OR from non-accredited investors, aka non-millionaires. Accredited investors usually are millionaires, and bc this govt was designed largely by and for white slaveholders & capitalists, it’s easier for community funds to get SEC approval for accredited investors, and harder to get SEC approval for non-accredited investors. this sucks bc most ppl who WANT to invest in community funds are * cough * not millionaires. but that’s why its helpful to invest in the few community funds that do have approval even if they are far away geographically).
Thank you for this infodump!
This is really important and valuable and not easily accessible info. It must have taken you a long time to gain this expertise!
My long, link-filled comment is understandably awaiting moderation :) A very short version for now:
Some credit unions offer IRA accounts that are in Certificates of Deposit (CDs). One of the best for both rates, and for how the money is used & who it’s available to while we’re living our lives is: https://www.self-help.org/personal/join-us/join-shcu.
For the more savy & determined, look into Self Directed IRAs, they are for anyone not just rich people. Using this you can invest retirement moneys in super rad community controlled funds like East Bay Permanent Real Estate Cooperative.
Wow those are wild good rates. Thanks for the intel! I currently have a CD with the national cooperative bank.
cool!! i will look into the national cooperative bank too! ty!!!
I feel this but for my current partner and maxing out my workplace pension! They match it +2% and they were like they pay us so little, why would you not take the free extra they DO give??? And they were right!
Important note: CONTRIBUTIONS to a Roth IRA can be withdrawn at any time without tax or penalty.
Hell yeah! Literally happened to read this right after checking on my Roth IRA, which I first learned about from lesbian icon Suze Orman in The Money Book for the Young, Fabulous & Broke. May queers continue breaking money taboos and helping other queers get financial stability, amen. It might not seem sexy to most, butttt I’m into it.
Hey, I really enjoying this feedback. I’d actually love to ask you a couple more questions. I can tell you’re the kind of person who thinks like I do and I’d love to connect. Nothing to sell. Just want to hear what’s working from you in the realm of “adulting” resources.
Yes! So happy to see this here.
I was really happy to see you write about this! I have only recently started saving for retirement, and truly wish I had started in my 20s. My partner (same age as me) opened her retirement accounts in 2017 and it is very clear how much money I am going to be missing out on at retirement age because I didn’t start sooner.
Thank you for this. I’ve had people I love tell me they’re not saving for retirement because of the climate crisis and capitalism. Which, fair points!
However, as queers, saving for retirement is investing in a future we deserve to see. We’re already earning less due to the sexist, racist wage gap so we’ll have to work that much harder to take care of our older selves. Saving for retirement means building a future where we can age with dignity.
Thanks for this article, it is so important. I wish I’d started my 401k when I was younger-and it is hard when you have retail/service jobs, so I understand anyone who ends up waiting, but as my coworker in her 50s said, even if you just put in $20/month it will grow, and definitely take advantage of any matching your employer offers. This article, and the comments did inspire me to start looking up Roth IRAs, which my former employer offered in addition to a 401k, but my current employer does not, so thanks for that!
THANK YOU! This kind of content is valuable! I also struggle with the non punk rock nature of thinking about providing for myself physically. But whenever I engage with money talk I can’t relate much because it’s people on a very different budget to me with a very different lifestyle!
I don’t know the situation with pension payments in various countries, but if we talk about my situation, I can hardly count on decent assistance from the state. Now I’m trying to develop in terms of investments and also found a great financial platform on this site https://www.koyfin.com/compare/bloomberg-alternative/ . I was thinking of choosing Bloomberg, but it’s great that I decided to google first and found an alternative.
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