How much have you saved for your retirement?

[Moohooya]

I'm 30 and have just woken up to the fact I should start saving for retirement. I have an IRA with 2K in at the moment. At the moment I don't have a goal for how much I want to have saved, but I guess it should be at least $200,000. I'm saving 2K a year, but I think I should up this. My company doesn't have a pension plan so I'm on my own.

How much do you plan on having saved in todays dollars when you retire?
How much a year are you saving?
Do you have a company pension plan?

Moohoo

 

[StageLeft]

$200K is almost certainly not even going to come close to cutting it. To figure it out instead of ramdomly picking a number identify:

1) What age you want to retire by
2) Estimated life expectancy (for instance if you weigh 400 lbs and all of your family members die of various diseases you probably won't live till 90 years of age)
3) What you need each year to live on

Assuming you are young enough - and 30 isn't too bad - I would just start throwing in 10-15% of your pay checks each and every month, no matter what, into your retirement fund and you'll probably do ok. Invest in a bunch of different good portfolios and you'll get a consistent 10-12% annual return over the long haul (ie, decade to decade).

 

[Total Refected Power]

That is way to low!!!!!!! You will need more like 1.5-2 million to live decent in 35 plus years. Your goal should be to max out your 401k plan. The current max is $10,500/yr. Not only do you save money on taxes now you get tax-defered growth for the next 35 yrs. Also, your company may give you a match in the form of cash or stock which is essentially free money.

This should be your top priority because you need to take advantage of the magic of compound interest.

My wife and I are each saving the max allowed: $10,500/yr. So that is a total of $21,000/yr. Plus some other retirement savings.

The future is a scary place unless you are prepared. You have plenty of time but need to start NOW!

 

[StageLeft]

Yeah, as long as your income isn't really low and its totally unreasonable to max your 401k contributions then you should do that.

Lets say you're making $45k/year now and don't want a pay cut when you enter retirement. If you enter retirement with $200k, even considering interest accrued during retirement you'd have the entire $200k blown in 5-6 years and then all you have is your pension (if you get one) and it will probably be a humble pension for most people.

 

[Urinal Mint]

10% is a good number for what you should put back if possible.

Just remember, you have to spend money to make money... spend a little money on yourself in 35 years and you'll be glad you did.

 

[StageLeft]

Oh yeah - if you don't have an interest in learning about all this yourself its definitely worth it to pay a few hundred bucks to consult with a personal financial planner, because if you don't you could find out in 5 years that you've been going about it wrong and just cost yourself $15k in potential savings.

 

[vi edit]

Right now both my g/f and I have our own IRA's putting in 2k a year for 4,000 a year combined. She also has a total of 15% (5% employee + 10% employer) of her monthly income put into a TIAA-KREF accout. Starting this month, I'm going to be having 10%, with a 4% employer match taken out of my checks for my 401k.

I'm 23, she'll be turning 21 later this month. She's not even out of school yet either. Doing all of this on basically 1.5 incomes is pretty good. We're going to be rich, old people

 

[Draco]

I'm 20, I have 8k in a ROTH IRA, 15k in Stocks and maybe a few bonds that still need to mature. Stock market has been tough Great time to invest though!

IRA's are great for the long term. Just set aside 2k a year if you can for that.

I have no 401k plan yet. You have to be 21, which is a crock of sh!t if you ask me.

 

[Praetor]

Oh wow, vi. Here I was all ready to make some smart alleck remark about having $500 set aside for retirement...

Time to get my ass in gear and look into these things.

 

[blueghost75]

yea, I have always heard that you should start saving from the beginning. I'm 16 now, so there's no way i'm saving my money for retirement right now, but I intend to start at least when I am 20.......

 

[GasX]

blueghost - start saving now

$2000/year starting at 16 will be over $1MM when you retire. Wait another 5 years and it will be $730K.

($2000/yr @ 10% for 50 & 45 years respectively)

 

[GasX]

The discipline saving now gives you can be used for other things than retirement - like buying a house or a car.

 

[purplehayes]

blueghost You should start now. I know it'll be tough because you're so young and retirement is sooooo far away, but if you hook up with one of the online calculators that will show you how much extra that 4 years of compound interest will give you, you'll be amazed. Plan ahead, start now.

PH

 

[GasX]

here's the calculator I used

if you up the investment return to 12%, that $1 million become $3 million!

 

[DaveJ]

At the moment I have $6000 in a conventional IRA, and another 4 grand or so in mutual funds that I don't plan to touch for a while... starting in July my employer contributes 11.5% of my salary to a 401K (it's basically FREE MONEY, woohoo!) I'm planning on maxing out my IRA for as long as I can, plus saving roughly 20% of my salary on top of that. I'll be a rich old dude, it's just getting there that's the problem... I'm 24, BTW. Started the IRA when I turned 18.

Dave

 

[AaronP]

I just turned 23 and I have 1700 in a Roth IRA. I plan on putting in 1700 more this year, and 3000 next year. I kinda like my plan. It's a pretty aggressive tech mutual fund, and whenever I wanna add money to it, I just login to the website for my fund family and can transfer money from my checking account right to my mutual fund.

 

[Moohooya]

Wow, sounds like lots of people are putting lots of money away. We don't have a 401K at work. What should I do, and how much?

Thanks,

Moohoo

 

[whizbang]

If you have access to a 401K, definitely invest in it. It is the single best tax benefit you can have. Try to put the $10,500 max/yr in if you can. Otherwise, you are stuck with IRAs. I have over 100k in my IRAs/401K. It was much higher a year ago before the tech stocks collapsed. Good thing I still have 28 years or so to build it back up...

 

[LaBang]

I'm 17 and want to start investing right now. What should i do? a Roth IRA or a mutual fund (like what?). I want to invest $2000 this year and more each comming year.

 

[Cyberian]

If you have no pension plan and no 401K, do what Skoorb said!
Plan ahead now and you won't be relying on Social Security and digging Coke cans out of the garbage.

I didn't really start to think about retirement until I got married (at 30)
I contributed the maximum to my 401K and we opened an IRA in my wife's name.
We both get (fairly small) pensions and will be eligible for Social Security in a few years. (I retired at 54.)
Various investments have done OK. Two decent cars are paid for and our mortgage was paid off when I was 40.
We have no[/] personal debt and should be able to get along comfortably, certainly not 'well off'.

Good Luck!

 

[Shmorq]

<< I'm 17 and want to start investing right now. What should i do? a Roth IRA or a mutual fund (like what?). I want to invest $2000 this year and more each comming year. >>

LaBang, I would personally go with a Roth IRA because all the profits you make will be non-taxable. Within the Roth IRA, you will be able to buy stocks, bonds, mutual funds... almost anything that a normal account can.

The only way you can take the money out without penalty is when you retire at 59.5 years old. Or if after five years you need money for school tuition, medical bills, or your first home.

But the main point is that the growth from a Roth IRA will not be taxed. Also, the maximum you can put into it per year is $2000 ($4000 for couples) and you have to make under a certain amount, something like $95,000.

 

[4824guy]

I started a long time ago. 401k and personal savings.

 

[Pastore]

People don't understand how realistic it is to be a millionaire these days...

Compund interest is GOD!!!!

 

[StageLeft]

People don't understand how realistic it is to be a millionaire these days...

Compund interest is GOD!!!!

Damn straight! Anytime a young person says &quot;I'm going to be a millionaire someday&quot; the only response should be &quot;Me too&quot; instead of &quot;good frigging luck!&quot;.

Fact is if you are in a household making national average income you can retire millionaires if you invest wisely and you don't even have to live on crackers to do it.

 

[Atlantean]

I am 18, and I wanna retire before 50, maybe 45 or so, but I am wondering how much I should put in so that I will be able to retire with lotsa cash