Will you have enough to retire?

[xeemzor]

There is a lot of BS to the whole Roth IRA brigade over maxing out your 401k. The simple assumption is that you can pull out the Roth IRA and use it for emergency - which is stupid since you are throwing away additional money to the tax advantages of the 401k.

In addition, there are plenty of other useful gems to a 401k over an IRA... Such as your 401k being untouchable when it comes to bankrupcy. Yeah, you might want to know things like that.

So much misinformation in this post. Traditional and Roth IRAs up to $1M are protected from bankruptcy. The only other better investment type for taxes is an HSA. Generally you should invest in this order: out your 401(k) up to minimum, HSA, IRA, 401(k) up to federal limits, taxable accounts. The reason for IRA before 401(k) is because 401(k) investment choices usually suck and you can't fully control what you invest in. The types of investments you put in taxable and non-taxable accounts also matters, but that's another post for another day.

You are correct in that you should never touch retirement funds unless it really is an emergency.

 

[purbeast0]

Some more data points...

60% of workers ages 25 to 34 surveyed said they have less than $10,000 saved or invested

http://online.wsj.com/news/articles/SB10001424127887324874204578441602225249728

i turn 32 next year and am way above 10k investment wise woot woot!

still wish i started my 401k as soon as i started working though. instead of at 22 i waited until i was like 25 or 26.

oh and the calculator in the op is pretty ridiculous.

 

[ultimatebob]

It says that I'm going to come up $800,000 short.

I call BS on that, as the tool isn't smart enough to ask if I also have pension income. That sucker pays 80% of my wife's income when she retires.

(And, yeah, I know better than to rely on that 100%)

 

[Exterous]

Anybody know where I can get that reliably?

Depends on what you consider reliably.

I hate calculators that base it on your income. My income could be half what it is now my lifestyle wouldn't change so why does my current income matter for retirement?

I agree but I kind of get it. Very few people actually know how much they spend a year and even fewer know what they spend on now that they likely wouldn't spend on in retirement so an income based model is much more easily accessible for the masses than a spending one.

 

[s0me0nesmind1]

That's sad. I'm only 29 and already have more than most people getting ready to retire.

It's not sad, it's just expected with todays level of stupidity. In all honesty though - for those of us that do save it I'm actually growing fearful the government will try to take it by some means.

People better hope Walmart is still hiring grandpa to be a greeter when they 'retire' is all I can say...

 

[Sho'Nuff]

That calculator is dumb. My current income is irrelevant to what I will need at retirement because my expenses will be different.

My retirement income could be half what it is now and my lifestyle wouldn't change, because all major expenses (home, etc.) would no longer be a factor.

That said, I am confident that I will have enough to retire. The question is whether it will be at 50 or at 60.

 

[Exterous]

Some more data points...

Another suprising part of that is that such a high percentage think they need under $250k for retirement. Over half of 24-35 think they'll be fine with less than $500k in retirement

 

[s0me0nesmind1]

Depends on what you consider reliably.



I agree but I kind of get it. Very few people actually know how much they spend a year and even fewer know what they spend on now that they likely wouldn't spend on in retirement so an income based model is much more easily accessible for the masses than a spending one.

People spend based on their income 99% of the time. It's not always as simple as you think...

When you go on trips, do you go with a 3 star - or Motel 6 where they are dealing crack outside and having hookers inside?

When buying a home, do you buy $30k in a ghetto, or do you pay $200k+ so your kids get a decent education?

Do you get a Toyota Camry, or do you get a Kia piece of shit? Again, you may be economical with your food, groceries, place of living, and clothes shopping - but other things change with your income.

 

[JM Aggie08]

i turn 32 next year and am way above 10k investment wise woot woot!

still wish i started my 401k as soon as i started working though. instead of at 22 i waited until i was like 25 or 26.

oh and the calculator in the op is pretty ridiculous.

Same here, but I'd much rather get my student loans paid off prior to enrolling. That, and once we've bought our house I'll be a little more at ease.

 

[Exterous]

People spend based on their income 99% of the time. It's not always as simple as you think...

When you go on trips, do you go with a 3 star - or Motel 6 where they are dealing crack outside and having hookers inside?

When buying a home, do you buy $30k in a ghetto, or do you pay $200k+ so your kids get a decent education?

Do you get a Toyota Camry, or do you get a Kia piece of shit? Again, you may be economical with your food, groceries, place of living, and clothes shopping - but other things change with your income.

This is for planning. For planning you need to know what your desired\likely spending is going to be so you can plan for a certian level of income to support that. Once you retire you switch to spending what your income allows

 

[stlc8tr]

That's sad. I'm only 29 and already have more than most people getting ready to retire.

It's a function of income, discipline, and luck.

It's much harder to save more than $175K by the time you're 29 if you aren't at a certain income level. You could do it on a $30K salary if you lived like a pauper or if you got lucky on stock picks. But it's much easier to save $175K if you make $100K/year coming out of school.

 

[mizzou]

In 2042, money will be meaningless.

 

[Dr. Detroit]

The 401k/IRA is laughable -

If you are in top bracket it will make sense to contribute fully today and take money at later at a lower bracket.

More money in today pre-tax gets more investment income than post tax -

If you make $50K a year - than yeah, post-tax IRA 401K might be a better choice.

 

[Engineer]

My boss is 55 and wants to retire at 62. I'm 44 and want to retire when he retires (I'll be 51). Possible? Doubtful as I have two children to put through college (one is a sophomore in college now - other is in 8th grade) but I'll damn sure try. I think I need to be saving more though (just upped my contribution to the company SIMPLE IRA by 3% of my salary).

Am eligible for a pension at 55 but that grows each year I wait. Wife has a pension too but both are small.

Time will tell I suppose.

If I enter into the calculator what I think I'll need when I retire (instead of what I'm making now), I'll have enough to get out at 55 and possibly earlier.

 

[IGBT]

I'll just raise the rents.

 

[s0me0nesmind1]

The 401k/IRA is laughable -

If you are in top bracket it will make sense to contribute fully today and take money at later at a lower bracket.

More money in today pre-tax gets more investment income than post tax -

If you make $50K a year - than yeah, post-tax IRA 401K might be a better choice.

Uhhh and when the liberal progressives jack up your brackets by 10% when you hit reitrement age... is that... STILL a good? Please, do tell :awe:

 

[s0me0nesmind1]

My boss is 55 and wants to retire at 62. I'm 44 and want to retire when he retires (I'll be 51). Possible? Doubtful as I have two children to put through college (one is a sophomore in college now - other is in 8th grade) but I'll damn sure try. I think I need to be saving more though (just upped my contribution to the company SIMPLE IRA by 3% of my salary).

Am eligible for a pension at 55 but that grows each year I wait. Wife has a pension too but both are small.

Time will tell I suppose.

If I enter into the calculator what I think I'll need when I retire (instead of what I'm making now), I'll have enough to get out at 55 and possibly earlier.

....No 401k?

 

[stlc8tr]

Uhhh and when the liberal progressives jack up your brackets by 10% when you hit reitrement age... is that... STILL a good? Please, do tell :awe:

No one has any idea what tax rates or tax structures will be like 20 years from now so it's best to have a diversified retirement portfolio. Some money in traditional accounts, some money in Roth accounts, and some money in regular accounts so you withdraw money for best tax advantage according to the laws at that time.

 

[TheSlamma]

Everyone on ATOT already has enough for retirement don't they?

 

[beachchica]

The way this country is built, I could retire whenever I want. Just kick back and collect that government cheese. I might not live the way I want, where I want or go on as many vacations but this cradle to grave welfare system, I might just retire now.

 

[ultimatebob]

Everyone on ATOT already has enough for retirement don't they?

Of course we do. We also all make over $250K a year and drive around with our trophy wives in BMW M3 convertibles.

 

[rcpratt]

$4.1M vs $4.8M that I need (apparently), but I'm young.

(That was for retiring at 62.)

 

[Naeeldar]

Another suprising part of that is that such a high percentage think they need under $250k for retirement. Over half of 24-35 think they'll be fine with less than $500k in retirement

I was going to point that out. I'm 29 and I pretty much figure I need a minimum of 4 million. On the bright side it looks like I'll be close to that with my current savings alone in 401k and that doesn't factor in the fact that I'll have a property I'll be renting out within 4-5 years pulling decent income in. Of course i also assume that will pay for the SS I probably won't get.

Still most of my generation is royally screwed.

 

[bonkers325]

Apparently I can retire at age 60. But if I retire 5 years later, I'll have an extra $1.5 million saved. Sweet.

edit: but that calculator is stupid, if I max out my income I'll need $55 million to retire. That's just moronic.

 

[shadow9d9]

I was going to point that out. I'm 29 and I pretty much figure I need a minimum of 4 million. On the bright side it looks like I'll be close to that with my current savings alone in 401k and that doesn't factor in the fact that I'll have a property I'll be renting out within 4-5 years pulling decent income in. Of course i also assume that will pay for the SS I probably won't get.

Still most of my generation is royally screwed.

SS will be fine. Quit with the paranoia.