I got my 401k statement and it tells you when the earliest you can retire and how much you get and if I waited 6 more years I would get more. I can retire at age 58 with 30 years but it would benefit me to stay until I am 62. The pension is based on the average of your high 3 and if you stay until 62 you get 1.1% each year you have worked instead of 1% if I retire at 58. I am not just relying on the pension, I have a Roth and I have some other mutual funds and some individual stocks. I usually put some money in each year into something. I doubt Social Security will exisit when I retire so that has to be replaced by something. Our retirement is suppose to be a combination of SS, pension, and 401k. I was talking to one of my older coworkers and she laughed when I started talking about it since I havent been with the Agency for that long and suppposedly shouldnt been thinking about retirement now.

4/26/2009 5:57:11 PM

more like 401LOL

4/26/2009 6:09:32 PM

People who laugh at you for thinking about retirement now are the ones who will be working at a 7-11 until they are 80 because they couldn't manage their money. GG to you.

4/26/2009 6:12:18 PM

yeah it's never too early to plan for retirement. if you can afford to start planning for it at a young age then do it.

4/26/2009 6:17:52 PM

I don't even have my degree in hand yet and I've been thinking about retirement for 2 years now. I just hope the fuckers that laugh don't vote their way into my savings accounts before I get to use it .

4/26/2009 6:20:02 PM

^^^ I think he was referring to the painful fact that most 401k's have lost 20-40% in the past year.
That doesn't mean you shouldn't have one, or something similar, but it's still pretty painful to lose so much money in such a short amount of time

4/26/2009 6:28:47 PM

i have an ira with t rowe price...some 50 dollar a month "automatic asset builder" thing they got

4/26/2009 6:35:55 PM

yeah, i'm gonna run a bait and tackle shop near the coast when i retire. i'm gonna fish a lot too. when i get in too bad of shape to fish anymore, i'm gonna just jump off the boat and let mother ocean take me home.

4/26/2009 7:05:55 PM

my company doesn't have a matching 401K so i haven't done anything yet

the government just gave me a bit over 8k for taxes that i'd like to do something with, however, i just don't know where to start

4/26/2009 7:10:24 PM

i'm trying to set things up so that i can afford to retire while i'm still young enough to enjoy going places and doing things. and not have to be a walmart greeter when i'm 80...

4/26/2009 7:43:37 PM

^^ if you don't have a 401k, might as well start a Roth IRA. If you have enough cash, you can max it out for a couple years

4/26/2009 7:54:59 PM

Yes, I started planning before I ever went to work. As the original poster said, don't count on Social Security being around. It's not even factored into my planning. If it's there, nice bonus, but unlikely. Also, don't count on your pension. Companies are cutting them all over the place.

4/26/2009 8:16:43 PM

i have myself a Roth IRA and I rolled my 6 year old 401k into a Traditional IRA when I lost my job a couple months ago. I'll open a new 401k whenever I find another job. My wife has a Roth IRA and just started a 403b through Wake County Public Schools, and I have a Variable Universal Life insurance policy on myself that has an investment component and cash value that can be withdrawn during retirement

4/26/2009 8:40:31 PM

Quote :

"i'm trying to set things up so that i can afford to retire while i'm still young enough to enjoy going places and doing things. and not have to be a walmart greeter when i'm 80..."

Best thing you can do at this point is learn to enjoy living simply. If you don't get used to blowing your money on needless shit you can retire sooner, and there's no adjustment to getting used to living without the needless shit.

4/26/2009 8:54:06 PM

^oh, i do enjoy the simple pleasures in life.

but i want to travel...which ain't cheap. and to that end, i aim to set up a sizeable nest egg. so far, so good.

4/26/2009 9:01:52 PM

Quote :

"starting"

i think that if you are more than a year out of college and haven't started planning then you are quickly going to be behind - if your company doesn't provide a 401k program then at least you should start up a roth ira - if they do and offer even the smallest match and you aren't partaking you are crazy

4/26/2009 9:06:55 PM

4 years of maxed roth ira history

20% 401k contribs, not including my 6% company match

$750 cash saved per month-- this doesnt have much to do w retirement but gives me a cash net so i dont have to dip into retirement for major emergencies

yup, started and think about it regularly

4/27/2009 9:24:45 AM

Right now I am 20% 401k plus 5% company match. As soon as I get married this year and we adjust our finances as a couple I am going to be maxing out a Roth IRA as well.

I feel decent with that for now. Once I get the Roth IRA going later this year plus the 401k I'll feel like I am in a decent position for now.

4/27/2009 9:35:03 AM

I wish I could afford to put away that much money right now.

I'm doing what I can for now. As soon as I can though I'm maxing out damn near everything to save.

4/27/2009 9:50:34 AM

I've thought about it millions of times but I'm just trying to straighten up my current debt/expenses and build up some emergency funds first

but yeah I'll definitely be taking advantage of our 401k when I'm finally eligible

4/27/2009 10:15:10 AM

6%, matched .50 on the dollar (1:1 when business picks up) 401k

going to start a Roth soon as my raise kicks in

Quote :

"yeah, i'm gonna run a bait and tackle shop near the coast when i retire. i'm gonna fish a lot too. when i get in too bad of shape to fish anymore, i'm gonna just jump off the boat and let mother ocean take me home. "

fuck yeah

4/27/2009 10:37:23 AM

I started my retirement fund when I was a sophomore in college.

4/27/2009 11:09:20 AM

I think this is worse than face book. Kids who make little amounts of money bragging. Oh the internet

4/27/2009 9:13:39 PM

^ wait wat?

4/28/2009 10:42:04 AM

Quote :

"^oh, i do enjoy the simple pleasures in life. but i want to travel...which ain't cheap. and to that end, i aim to set up a sizeable nest egg. so far, so good."

Me too. But stuff like eating out all the time and going to the movies really adds up. I'd rather buy a grill and have steaks at home when I can find them on sale than pay $20 each at a restaurant.

4/28/2009 10:59:12 AM

Quote :

"4 years of maxed roth ira history 20% 401k contribs, not including my 6% company match $750 cash saved per month-- this doesnt have much to do w retirement but gives me a cash net so i dont have to dip into retirement for major emergencies yup, started and think about it regularly"

i'm calling bs on this. if you were to make 100k a year this would be a savings rate of 33%. Anything less than this and it becomes substantially more.

[Edited on April 28, 2009 at 11:29 AM. Reason : ou uo]

4/28/2009 11:28:42 AM

i dont make $100k

and i'm not lying

i'd be interested to see how you backed into that number

also, i have very minimal expenses related to a car. i have no car payment, dont pay for gas or tolls or insurance. i pretty much take all that savings and keep it in cash

4/28/2009 11:38:47 AM

^^,^

Yea I don't think that is unreasonable especially without a car payment etc. I am at the same % in my 401k, a little less than you per month in cash into my savings account and that puts me at like 28% saving rate. If I didn't have my stupid student loans (that I am paying $400 a month on at the moment) then I would be maxing out my $5000 in my Roth IRA (since its about $400 a month to do so) and that would put me at a savings rate of ~38% or so. And I certainly don't make $100k ha.

I actually can't wait to get married either since she is much more frugal and a coupon clipper and better shopper (mainly because I'm lazy in that department heh), I'll actually start freeing up even more money


[Edited on April 28, 2009 at 11:49 AM. Reason : ]

4/28/2009 11:43:28 AM

I chose 100k just for easy percentage examples.

if you put in 4k a year into your IRA and then you had $750 saved each month that would put you at a total of 13k saved, or 13% of 100k. then with the 20% in your 401k that makes 33%.

If you don't pay for gas or insurance i can understand that contributing. If you don't have to pay your own cell bill i can also see that contributing.

If you made 50k you be at a savings rate of 46% of your gross income, which I just don't buy.

Perhaps if you also live at home and thus your living expenses are reduced then I could believe you, but otherwise its hard.

but if you can manage to do that with making less than 100k then you should really write a book, because you could definitely teach people how to live.

[Edited on April 28, 2009 at 2:18 PM. Reason : .]

4/28/2009 2:16:29 PM

here is how i work it out

i pay my $5k contribution to my roth ira usually in jan for that year just starting up. this gives me the best opportunity to earn the most since i contribute as early as possible instead of waiting until april of the following year to contribute for the year that already ended.

that $750 i save every month comes out of my checking account automatically as a "bill' that is sent to my money market account. i draft 2 payments of $375. one on the 12th and one on the 27th. this allows me to cancel one of those payments if something comes up and i end up needing the cash but i rarely cancel the payments as i view these drafts as bills i have to pay

i also put 70% of my bonus pay into my money market account. so you see, my money market is my little cash stash throughout the year. when jan hits, i toss $5k into that roth, most of which was saved up over the previous year and i'm still left with a cushion of at least $4k. over the years this has eventually built up to more than that since i put my tax returns and any other money that feels "free" into that account.

i do not live at home, i own my own house which i pay for 100% by myself.

as for the 20% into my 401k. i've built up to this over time. when i hired in 3 years ago i started with 6% plus my 6% company match. i got my feet on the ground and built some savings and bumped it to 10%. then 12%, 15% 18% then 20%. i'm still not maxing out my 401k but that is the ultimate goal. if you bump up the contributions little by little, you dont even feel the difference.

again, the ONLY thing i pay for related to my car is 14 cents per personal mile that i drive. it shakes out to about $100-150 per month. my cell phone has been paid for for the last year (a $50 savings) but that is ending soon so i'll be paying for that again. i travel a ton for work so i save a lot on meals. i also minimize my utilites as much as possible, not running my AC since Sept since i haven't needed it.. and also unplugging ALL appliances that aren't necessary. $60 in total for utilities for a 1600 sq ft house is a pretty good deal, imo. i take advantage of this and save as much cash as possible instead of spending it on whatever.

here is another thing. i get paid the last day of the month and regularly my bank account is down in the <$200 range toward the end of the month. it feels incredibly stressful and tense and it changes my behavior a lot. i will avoid going out to eat, raid the pantry for dinner and skimp on social activities because i simply don't have the money. but knowing that even though i may have $75 in my checking account the week before payday-- i contributed 20% to my 401k and saved $750 that month, plus all my bills are paid... i know that i'm really not that bad off


i wish people our age would read more books on financial topics. its so simple.. pay yourself first & the more you save when you're younger, the more that shit adds up to be when you're old and ready to retire. the economy sucks right now but it will come back and backing off 401k contributions and not paying into a roth are bad ideas. if anything you should be reducing how much money you pay other people (in higher utility bills, needless services, etc.)

4/28/2009 2:47:45 PM

^ Smart girl!

I wish my wife thought like that.

I do, but she doesn't. It's kinda funny, because i've read several financial books that stated how bad doctors are at finances.

4/28/2009 3:17:07 PM

Quote :

"if you can manage to do that with making less than 100k then you should really write a book, because you could definitely teach people how to live."

It's not that hard. My #s were about the same before I bought a house. My 401K and roth are still maxed but my $/cash saved per month is much lower now which isn't a big deal since I have an emergency fund.

4/28/2009 3:41:47 PM

thanks bobby

i've heard the same about doctors

but think of all the money you'll save over your lifetime because she'll be able to diagnose and treat simple things for the whole family!

well, i guess that depends on her specialty but i'm sure she can sew a simple stitch or figure out how serious a condition is without rushing to the er

4/28/2009 3:49:06 PM

Wolfy, please educate my wife as well. Bobby, I have to disagree about the Dr. comment. My father is about as tight with the budget as one can be.... Perhaps it is female doctors? Ha

4/28/2009 3:53:46 PM

^
obviously, there are exceptions...

^^oh yeah, esp with a baby. Some of our friends who have babies and no medical knowledge have rushed their baby to the ER "to be on the safe side" multiple times for what turned out to be nothing, whereas I just ask my wife if [insert situation here] is normal or not when i'm taking care of Amy.

I even budgeted about $1000 extra for our FSA last year thinking that there would be a lot of medical bills with a new baby, and ended up buying ~$800 worth of OTC drugs in mid march to avoid losing the money altogether. Now I have enough zyrtec to last me till I'm 80





[Edited on April 28, 2009 at 4:00 PM. Reason : asf]

4/28/2009 3:55:13 PM

Maxing out a Roth for me and the wife, with only her contributing to 401k (mine has no match).

$2k+/month to early debt repayment (I got some god-awful private student loans) which should obviously be done quickly given that pace. We will then snowball that into saving for a house.

Additionally, we want the debt gone simply because we are risk-averse. If one of us lost a job, without those debt obligations we could easily survive on one salary, and that's the goal. As it is, we can barely scrape by on one salary - and that's what we're doing.

Her entire paycheck goes straight to the money market every time, from which we then use it to pay debt. Both roths and our living expenses are paid by my check and my side income.

If you're married, a very simple rule: live on one salary, preferably the lower one, and you'd be amazed at what can happen.

Our net worth will make a nice little change:
2 years ago: -50k,
1 year from now: +40k at the very least.

All that from two people who make below average college-graduate salaries.

Any house with two incomes anywhere near the national median has no right to complain about any money problems ever. I thought after graduation I would sympathize with people more. Nope. We vacation and road-trip cheaply and enjoy life....we just don't need much stuff.

Being financially comfortable has very little to do with your income...it's almost entirely about expenses.

After the debt is gone, we're considering just renting for another couple years, and buying our first house outright. That'll be pretty nice (being under 30 with no debt and a nice house paid for), and enable her to stop working once we have kids, as she wants to do.

[Edited on April 28, 2009 at 4:06 PM. Reason : s]

4/28/2009 3:58:02 PM

This is a sensitive issue, and prone for a lot of debate, but I think you should diversify yourself more than putting 20% into a 401K. Thats an awful lot of money to be risking in the open market. Most have put their 401Ks in medium risk category, which means they got the crap beat out of them the last few years (probably means you've actually lost a lot compared to just saving it).

4/28/2009 4:11:13 PM

NCSUWolfy

Given that your 5000 to the IRA is achieved from your 750 savings then things are illuminated a little bit. I'm still shocked (read: very impressed) but apparently it can be done.

The 60 dollars for water, electric and gas is shockingly low. I run the heat starting in november usually and stop in early march and then run the AC from may - sept. I could 'suffer' through it but being strict on saving doesn't mean that I shouldn't make a point to be comfortable.

Do you have cable or internet at your home?

As for me I contribute 10% to my 401k. Save 5% of my gross each month. and contribute full roth independently. This works out to roughly 24% saved. However the 5% of my gross over last year, this year and next year will primarily go towards an engagement ring, wedding ring and a honey moon so i don't consider it money that will see its way to retirement.

4/28/2009 4:17:26 PM

Carzin, she and others like her have probably lost 40% or so... thats fine. The hope is that by the time we retire and through dollar cost averaging we will be sitting pretty. If the DOW is at 20K when I'm 60 I would laugh at my poor return in 2007. Retirement is big picture, long-term....

4/28/2009 4:19:57 PM

my 401k, just like everyone elses, has suffered. as has my roth ira. its part of playing the game. i'm only 3 years into the workforce and i have decades ahead of me.. it'll be made up

for the record, i also use a financial advisor. i talk to him on a regular basis and we talk about my financial goals often. this is something im willing to pay for (same with my taxes) because i'm just not interested in doing it myself. so i'm not out there blindly choosing investments and crossing my fingers (although isnt that what the market is about anyway? lol). he's a legit advisor with credentials and never pressures me into anything i'm not comfortable with and will spend an hour explaining an investment to me if i wanted him to.

the question about cable and internet...

my cable is rolled into my (gasp ) $165 monthly HOA fee. i pay $6 extra for digital cable. my internet was running me $40 per month. this was not acceptable so i called comcast and they put me on a slower internet connection for $24 a month. the slower connection isn't even noticeable and i save $15 a month (which incidentally, my HOA went up $15 a month so it goes straight back into expenses but is net neutral i guess)

the $60 utility bill is amazing. i put in 32 CFLs as soon as i moved in. i use fans in the bedroom and living room when i'm hot and keep the AC at 75/77ish when i run it-- will be running it soon so i know that bill will go up. i go as far as unplugging my tv when i'm not using it. that also goes for cell phone chargers (any charger really), coffee maker, etc. i pretty much only keep my fridge and alarm clock plugged in 24/7. these all sound like minor things but they've apparently made a difference for me.

i also do things like buy books i want to read on amazon for $6 instead of $20 (and sell them back on there when i'm done) or just use the library. borrow movies from friends and coworkers instead of renting them. use a camelbak watter bottle to drink out of instead of buying bottled water. wash my clothes in cold water & dilute fabric softener. i mean, we're not talking major life changes, just piching the pennies out of a few mundane things to end up with more money for other stuff. i dont even coupon!! gah if i could get into that i'd be a billionaire, i know it

all this stuff is possible, it just takes some creativity and discipline... and wanting to retire early on a sailboat that you can take around the world

[Edited on April 28, 2009 at 4:44 PM. Reason : nbmnb]

4/28/2009 4:35:14 PM

I'm all about saving money but unplugging all your stuff when not in use and never cranking your AC is not something I could deal with

I cover all my living expenses with one paycheck

Another pay check for fuckaround money

and invest the other two

Its working so far, and I'll be damned if I unplug my 360 after a game of Madden

4/28/2009 4:39:13 PM

BTW. Im not saying NOT to put money in your 401k. I am saying there are other things out there to invest in. Real Estate, for example, unless you've been in the worst hit areas, has still been better than the market.

My mom converted all her money in IRAs to money markets 2 years ago. As a result, the fund has gained money in the last 2 years. It wasnt because she saw financial ruin on the horizon, but you dont have to gamble to win.

Also for the record: I think a lot of financial advisors suck ass. It is in their best interest to have you invest as much as you can so they make money. People seemed to buy the 'invest everything you have now so you can retire early.' The buy into this like its factual. Its not. Its a marketing slogan. There needs to be a balance towards saving for retirement, and living in the moment. There are other ways to invest than in stocks. And you dont have to put every penny away to somehow have a good retirement.

From people I know that have retired well, it has been prudent savings, investment, and real estate, coupled with a lifestyle that didnt require them to mortgage everything they have.

[Edited on April 28, 2009 at 5:01 PM. Reason : .]

4/28/2009 4:56:29 PM

401ks is all about your options.

For example, if you have a self directed option in your 401k, you could still be doing quite well this year, and deferring those short term gains till you are retired (as opposed to paying the taxes now, and doing the same thing in an IRA)

4/28/2009 5:48:17 PM

I max a Roth IRA (full of various index funds, all stock-based)

I put another $450/month into a taxable brokerage account (military doesn't have 401k...just TSP, which has limited choices and no match).

I put another $150/month into my money market account.

I also have 3 permanent (whole & universal) life insurance policies that my parents bought for me when I was a kid at a cheap rate (knowing that I'd later probably end up being a pilot, which would make it much more expensive). Knowing then what I know now, it would've been much smarter for me to just have the military's SGLI term insurance, but at this point, they're almost paid for to the point that they're self sustaining (requiring no further payment from me) and generating a little growth.



I have all of that stuff automatically drafted from my pay just like a bill...there's no "Ehh, I'll skip it this month...I need the money". I view the IRA and stock retirement savings as just that--I don't touch them for any reason. The money market account is my savings account--I view about 3-4 months salary in that as a minimum that I'd only use for a financial emergency. Anything above that, and anything in my checking account, I view as fun money. I can spend it on whatever I want and not feel bad about it.

In reality, though, I've kinda ingrained a pretty frugal streak in myself over the last few years, so I still am pretty careful with my spending even if I could afford (on just the "fun money") to spend more. I mean, I'll spend money on good times--I'm not a miser (I blew an inordinate amount of money raging around Wilmington over the weekend with 8 of my friends from my squadron. I also have a jet ski and a motorcycle, and I usually buy good stuff, whether it's for a hobby/recreation, or it's a home appliance or something). The difference nowadays is I really shop around to get a good deal on what I want, and I really consider whether I need/have any use for it (like, I want a boat and another sports car...but the boat is really to take my little girl out on, and due to the FL courts being backed up, it looks like I won't be able to get her up here until the middle of the summer...and the sports car, well, I'll get another one, but I won't get enough use out of it until after my next deployment next year to be able to justify it).


All in all, I think there should be a balance. You should set an attainable goal for when you want to retire, and how much money you want to live on in retirement, and put aside what it's going to take to make that happen. Most people don't think that far ahead, at least not in time--they spend first and save whatever's left (which usually ends up being nothing or close to it). If you want to get rich, you don't need a huge salary, but you need to start saving now, and treat it just like a bill--drafted out of every paycheck being the easiest way.

On the other hand, it's stupid to be a complete miser, living SO far below your means that you retire with more money than you know what to do with, but missed out on everything along the way during the prime years of your life.

4/28/2009 6:44:41 PM

bttt

5/6/2010 11:04:25 PM

5/6/2010 11:22:00 PM

^His principles are solid for people who are bad with money.

In the 5 years I've been with my company (now vested, yea!) I've gotten about $32k from them from ESOP and profit sharing, along with $8k of my own in my 401k. So already at ~$40k and my wife gets matched 1:1 and in the last year is already at $8-10k I think, and that doesn't include savings or other investments.

Here's the basic principle, save early and let interest do the rest.

5/6/2010 11:38:22 PM

Yeah, I've got my cardboard box and shopping cart all picked out.

5/6/2010 11:49:58 PM

Wolfy's story is definitely believable. I max my roth IRA in January every year ($5k) and this year will come close to maxing out my roth 401k ($16,500). I could easily do it if I was deferring pre-tax income, but the after-tax makes things a little tight on me. I plan on maxing it next year, I've had a lot of trips over the past 6 months that have really eaten in to what I can save (spain, vegas, cruise, miami) so if i come up a few thousand short so be it. I also refinanced my place this month so the $300/mth savings there should help a lot going forward.

I don't have a lot of bills other than my car ($650/mth) and I don't really spend a lot on anything besides booze and gifts.

I certainly don't make a lot of money, I just like to keep things simple in my life so that I'm not a slave to debt and have the freedom to do what I want later in life.

5/7/2010 12:25:27 AM

Agreed. Also, Dave Ramsey and Suze Orman can die in a house fire.

5/7/2010 12:49:50 AM