401K Savings - how much to reach goal?

[akcire]

Hi I posted earlier about my DD14 having the roth. My DD babysits and dog walks in the summer, hence the earnings and hence the ability to open the roth. Then you need to do a 1040 tax return but since she's considered self employed you have to pay FICA if amount earned is more than $425, so she keeps it under that for summer employment, file the fed and owe nothing but the State still hits it in PA for 3%.

She has had the education roth since it was created..but the pension roth we got her above we did not get her that until the legal age of 13. So in the case of the person wanting it for their 2 year old, no can do. Do education roth but no pension roth until state minimum which is 13 for us.

Boo. I thought you'd uncovered a loophole. I own my own business and thought about hiring her as advertising talent. However since I do no advertising nor did I want her picture on our website I figured it was too shady for me.

No Roth for know.

 

[amcnj]

The main thing is to not get discouraged by tables showing what you should have, so that you do nothing. Almost all of us need to save for retirement. How much you will need depends on you, your lifestyle, your expected expenses in retirement, other sources of income in retirement, etc. There is no one magic number that fits all. These tables assume the 401K is all you will have, and that is not the case for all. On the plus side, such tables can motivate you to investigate your current circumstances as well as what you want in retirement.

Many of us have deductions coming out of our checks that will disappear in retirement: pension contributions, fica contributions and 401 K contributions for that matter. But you might have other expenses that are higher, like medical premiums possibly.

So the way I approach it is to try and figure what you will need to live the way you want to in retirement and then figure what you need to do to get there, taking into account any pensions, social security, other investment income (like dividends and interest). Yes, things may change between now and retirement and you may need to refigure your plan, but at least you have a plan and are working towards it, putting you in better shape than many others.

 

[tvguy]

The main thing is to not get discouraged by tables showing what you should have, so that you do nothing. Almost all of us need to save for retirement. How much you will need depends on you, your lifestyle, your expected expenses in retirement, other sources of income in retirement, etc. There is no one magic number that fits all. These tables assume the 401K is all you will have, and that is not the case for all. On the plus side, such tables can motivate you to investigate your current circumstances as well as what you want in retirement.

Many of us have deductions coming out of our checks that will disappear in retirement: pension contributions, fica contributions and 401 K contributions for that matter. But you might have other expenses that are higher, like medical premiums possibly.

So the way I approach it is to try and figure what you will need to live the way you want to in retirement and then figure what you need to do to get there, taking into account any pensions, social security, other investment income (like dividends and interest). Yes, things may change between now and retirement and you may need to refigure your plan, but at least you have a plan and are working towards it, putting you in better shape than many others.

Good points. I'm amazed in my mom's case, how little her health insurance is. $90 a month supplement to cover what Medicare does not. A lot better than the $225 a month I pay a month for my group healthcare at work.

 

[DizneyDogs]

Just curious what u think should already be saved at target ages

total amount saved by retirement - lets say 65years old...

Age 65 - 1 million ? ( is this a realistic number?)

Age 50 - how much do u think needs to be in there to reach the million in 15yrs?

I know alot depends on the market etc, but assuming u contribute 10% and the company matches 5%.

Any ideas....

I didn't see that anybody answered your question but let's assume an 8% rate of return you would need to contribute $2,889.85 per month to get there in 15 years that's the total of all contributions (yours and the company match) here's the calculator I used

http://www.timevalue.com/products/tcalc-financial-calculators/millionaire-calculator.aspx

 

[lisaross]

Thanks everyone for responding - interesting to read all the different posts/views!

SAVE SAVE SAVE

 

[preschoolmom]

I didn't see that anybody answered your question but let's assume an 8% rate of return you would need to contribute $2,889.85 per month to get there in 15 years that's the total of all contributions (yours and the company match) here's the calculator I used

http://www.timevalue.com/products/tcalc-financial-calculators/millionaire-calculator.aspx

Off Topic - DizneyDogs - What flowers are those with the Mickey Heads in your garden? I love it!!!

 

[imsayin]

Hi I posted earlier about my DD14 having the roth. My DD babysits and dog walks in the summer, hence the earnings and hence the ability to open the roth. Then you need to do a 1040 tax return but since she's considered self employed you have to pay FICA if amount earned is more than $425, so she keeps it under that for summer employment, file the fed and owe nothing but the State still hits it in PA for 3%.

She has had the education roth since it was created..but the pension roth we got her above we did not get her that until the legal age of 13. So in the case of the person wanting it for their 2 year old, no can do. Do education roth but no pension roth until state minimum which is 13 for us.

There is not an age minimum to open a Roth IRA. My kids worked as toddlers (modeling) and have had IRA's since they were 2 years old. Since they had earned income, they could put it into a retirement account, no age restriction.

 

[scottmel]

There is not an age minimum to open a Roth IRA. My kids worked as toddlers (modeling) and have had IRA's since they were 2 years old. Since they had earned income, they could put it into a retirement account, no age restriction.

There is an age limit limit of 12 in PA. NONE on education roth but retirement roth is age 12 here...

 

[Arielle22]

Yep and I could walk out my door tomorrow and drop dead. Your grand father lost his pension, my dh lost his life before even seeing one dime of the money saved.

I'm assuming your point is pensions are not guaranteed?

Lol, I would say neither is 401k's since a bunch if retirees saw theirs take a huge hit just 4 years ago.

My pension if i take early retirement in a few year will give me around 50% of my pay, sure my company could go belly up but then I'll probably go before they do considering they've been around 200 years.

I'm not saying what financial "style" is better. I know retirees who are happy as a pig in slop and they have big mortgages, new cars etc etc. One could trade "stories" to support their particular style. Like I said I simply question this "you should be at X point by Y date or your doomed to poverty" and I'm definitely over the "if I take my family out for pizza, I'm short changing my retirement" thinking.

Eliza, I think like you do. DH and I have saved 7% for decades. However we do enjoy our lives.

My Dad died when he was 50 and Mom at 63. Neither ever got to retire. I never met my FIL. He walked out of his home, holding MIL's hand while he also held the dog's lease. As they were crossing the street outside the home, car hit FIL and dog killing both. MIL was untouched. Driver claimed sun was in her eyes.

My grandfather also died while crossing a street on the way to meet his ride for work.

So I have a deep fear that if I sacrifice my current happiness for future needs then I won't live to enjoy it.

 

[DizneyDogs]

Off Topic - DizneyDogs - What flowers are those with the Mickey Heads in your garden? I love it!!!

They are pansies