401K Savings - how much to reach goal?

[Anthony1971]

LOL, never listen to these articles. According to the article, you should
1) max out your 401K (my max would be 20%) of my salary
2) then take 50% of your after tax salary and save that in a roth type vehicle.
3) also some how save for your kids college
4) then some how I quess those "incidentals" like housing, food and health care are supposed to take care of themselves.
5) and you're supposed to have some kind of life.

I agree
problem 1
Max out 401K 17,500 for 2013 lower previous years or max 15% of your salary for most (no longer applies now any % up to max amount)
this leads to your #2 you can not have a roth IRA and a trad. 401K if you max your 401K with a high salary or for that fact even contribute-- which you likley have if you can contribute 17,500 a year or 35,000 for two working.
The amount "you need" includes ALL you have not just a 401K
Problem 2
To say someone needs X amount of dollars based on whatever is ridiculous HOWEVER a good starting point.
Each family needs to sit down and look at their lifestyle. When you retire you may still have a mortgage maybe you still have to put a child through college you have credit card debit you have a wedding to pay for..... if you are paying these now and will be done you will not nearly as much when you retire as you make now...
maybe you plan on buying a smaller house in a less expensive state or maybe buying bigger......
do you went to vacation or stay home?
To set a goal # you need to have a plan for your future and there ain't no calculator for that Jack.

 

[ManyMinnie]

At age 38, DH has toward the high end listed in that article in his 401k. He plans an early retirement (before 55), so we have been maxing out his 401k contribution.

That is money we have no intention of touching until retirement and we don't plan on using it at all until then.

 

[HayGan]

Yep, my dad also lived until late in his 80's.

1) never went a darn place because he had to keep saving
2) paid his house off yet refuse to even turn on the air in the middle of July in NYC because god forbid the electric bill went up.
3) paid off his house yet won't spend the dime to keep it updated.

and he died wealthy. had a military pension, a police pension from NYC and an inheritence from my mom. He absolutely made more in retirement then he did working.

I totally admit, I'm having a serious change in my tune. I know longer am living for some "mythical" age 50 years done the road that I may or may not live to see. I drive 47 miles each way to work, so yep I'm rethinking having a stripped down basic car just to save for 40 years from now. I'm not beating myself up for wanting "soft corithan leather" and satellite radio LOL.

I've dropped my 401K contributions in half. I'm saving only what my company will match.
with the remainder I plan on doing quite a bit of traveling and seeing the world with my sons.
Now I do admit to having their college tuition saved for so that makes it a bit easier.

I'm done with charts, projections etc. I'm toying with retirement soon also due to some unforseen circumstance and whether or not I have the "suggested" amount in my portfolio, I will see Italy, Spain and Greece before I get to old to move. so you are absolutely right, I'm just reevaluating my priorities.

I agree completely. Savings are important but also is having a life. Everyone needs to find the right balance in their life betwen saving & spending. I'm so thankful that I know how to save but also enjoy my hard work now. I also don't get caught up in all the trappings of today's society nor do I plan on leading some extravagent retirement. Quality of life now and then is what matters most to me.

 

[scottmel]

LOL, never listen to these articles. According to the article, you should
1) max out your 401K (my max would be 20%) of my salary
2) then take 50% of your after tax salary and save that in a roth type vehicle.
3) also some how save for your kids college
4) then some how I quess those "incidentals" like housing, food and health care are supposed to take care of themselves.
5) and you're supposed to have some kind of life.

Check to all of the above! and we even go to Disney every year too!!! Though when Dd was little we stayed at moderates now we are deluxe club level in our 40's! But my dad has always said "live like nobody else today so you can live like nobody else tomorrow" and that is so true. Sage advice....I am an aggressive saver though I will admit to being a spender on the finer things in life as well.....Guilty as charged!

 

[ManyMinnie]

Check to all of the above! and we even go to Disney every year too!!! Though when Dd was little we stayed at moderates now we are deluxe club level in our 40's! But my dad has always said "live like nobody else today so you can live like nobody else tomorrow" and that is so true. Sage advice....I am an aggressive saver though I will admit to being a spender on the finer things in life as well.....Guilty as charged!

I don't like that phrase, as "tomorrow" may never come. We are all about moderation.

We have been able to put a lot more into 401k in the last few years, due to salary increases. One of the major factors in contributions is income and when our income was lower, the bare minimum was being put into the 401k.

 

[lisaross]

i agree you have to find a way to enjoy life today and still save for tomorrow!

Also, who knows how things will be when retired - will u be sick - will u die early - live long - move etc.

My husband would like to retire at 57 - not realistic as our youngest will just be finishing up college! I think it would be great if we could have a few years after the kids are finished with college so we can make sure we have what we need to retire and figure things out - like who knows where they will be living - what state etc.

I would LOVE to have a condo or something close to my boys - or one of them...and i'd love to have a place in a warm climate - again who knows what life will bring...

I also like enjoying time with my kids now - and try to give them as much as i can again all within reason! having vacation memories - experiences etc

I guess for now - i will continue saving like we do...our mortgage should be paid off in about 4 years...we have 2 cars - just bought a new car this summer but keep them for 10+ years...

How tragic to die and never enjoy life....

 

[beachbunny]

Our plan, if you can call it that, is to save 15% a year. We watch our savings and cross our fingers. Most of our retirement savings, however, is in real estate. Our plan is to sell our house and downsize when we retire, and use that profit to fund the bulk of our retirement. Luckily, I live in a location where home prices are crazy due to scarcity, have never gone down, and continue to go up.

 

[bdcp]

We're towards the top third for our ages and we have quite a bit and we're putting in since we know we can't live on that without moving too far away from our families. We will have a couple of small pensions too. DH is a retired US Navy reserve officer so he'll get that retirement starting at age 60. I'm a Federal employee (FERS) so I'll get some but nothing compared to what those getting CSRS are. Our sons (27 and 29) both have a lot put away for their ages and they'll have more than us at the rate they're going. We didnt start putting into 401K's until our 30's. We're 53 and 55 so at least 10 more years of working.

What has always amazed me is the percentage of people who put nothing into 401K's and think they'll just live on social security. We just met with our financial planner/advisor and while we're still pretty aggressive, we've moved some of our mutual funds into safer investments. We feel a real correction is coming to the artificially high stock market. We have mutual funds outside of our 401's because we've rolled money into them (from previous and current companies).

 

[Gumbo4x4]

I am waaaaaaaaaaaaaaaay behind. Then again, I'm also waaaaaaay ahead of " average". So, I can be above average poor I guess

 

[Gumbo4x4]

At age 38, DH has toward the high end listed in that article in his 401k. He plans an early retirement (before 55), so we have been maxing out his 401k contribution.

That is money we have no intention of touching until retirement and we don't plan on using it at all until then.

Actually, if he plans to retire at 55, you shouldn't plan on touching that 401k money until 4.5 years later.

 

[ceecee]

We are above target, but since DH is a financial advisor I expected as much. I really don't think you can get a Roth IRA for a child who has no income, be curious to know how that happened. You can however, put your child's college $ in a Roth for yourself if you qualify and your age is such and that way this doesn't show up as $ in your child's name when/if they apply for scholarships or grants.

 

[eliza61]

I just think these articles can be very misleading and are intended to scare people more so than help them.
Does this article take into account other sources on income? I still have a pretty nice pension from my employer along with investments, so maybe 1 mil in my 401K is not necessary.

What's the life span this article is taking about? I love the commercial from fidelity where they have people put green dots along the age of the OLDEST person they know and they tell you that's what you have to prepare for. well I know some one 102 years of age, what are my chances.

exactly what type of "lifestyle" do these articles promote. Am I saving up millions of dollars to sit in a nursing home?

so exactly how do they calculate these "target"?

 

[tvguy]

I just think these articles can be very misleading and are intended to scare people more so than help them.
Does this article take into account other sources on income? I still have a pretty nice pension from my employer along with investments, so maybe 1 mil in my 401K is not necessary.

What's the life span this article is taking about? I love the commercial from fidelity where they have people put green dots along the age of the OLDEST person they know and they tell you that's what you have to prepare for. well I know some one 102 years of age, what are my chances.

exactly what type of "lifestyle" do these articles promote. Am I saving up millions of dollars to sit in a nursing home?

so exactly how do they calculate these "target"?

My wife's grandfather was set too. Great first few years of retirement with pension and social security. His former employer went belly up, and the pension went away. My mom has a pension too, but it's only about 25% of her retirement income.

 

[eliza61]

My wife's grandfather was set too. Great first few years of retirement with pension and social security. His former employer went belly up, and the pension went away. My mom has a pension too, but it's only about 25% of her retirement income.

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.

 

[powelweb]

We are above target, but since DH is a financial advisor I expected as much. I really don't think you can get a Roth IRA for a child who has no income, be curious to know how that happened. You can however, put your child's college $ in a Roth for yourself if you qualify and your age is such and that way this doesn't show up as $ in your child's name when/if they apply for scholarships or grants.

A child can have earned income for chores or working in a family business. A 12 year old can babysit in most states- I'm not sure what the minimum age is for a paper route (if those even still exist), but there are ways to establish an earned income base in order to open a Roth IRA for a child.

Not that we've done this- just was explained to me by a financial advisor.

 

[Colleen27]

On target, slightly above the low end. Put 15 % of our pay into retirement for each of the last 34 years . I'll be 56 this year, sat down with retirement planner and we are on track financially to retire at 62. I must not make much, because people always complain about how little social security pays. My benefit will be about $250 a month less than I make working (take home pay, not gross). With the minimum required distributions, I'll be making more retired than working.

If SS still exists when we retire we're on track to have a higher income in retirement than we do now. But for us that goes hand in hand with not needing much to live right now. Heck, we've had a couple bad years where we were technically below the poverty line and still able to keep saving. My main retirement worries are that SS won't be available and that medical expenses will consume everything we have saved and then some. My grandparents had a higher retirement income than their working-years income, between the combination of SS, pension, and savings, but still struggled to afford medical care at the end.

 

[tvguy]

.

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 suspect if we looked hard enough we could find odds telling us which is more likely to happen.


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..
Fortunately, most folks invest in 401K's over 30 to 45 years. Mine was up 37% in 1997. I shifted to an annuity when I turned 50, but initial investment can not go down.

 

[ManyMinnie]

Actually, if he plans to retire at 55, you shouldn't plan on touching that 401k money until 4.5 years later.

Good to know, thanks.

 

[scottmel]

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.

 

[mks18412]

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 would read the laws to see to how much can be saved. I heard that a law could be signed putting limits on retirement. I believe the $ amount is 3 million. Im not sure on the specifics so you may want to look further.