reaching a retirement savings goal

[abmitch01]

I'm 44, a single mom and a hospice nurse with a not great salary. I started contributing to my company's 403B (like a 401K) as soon as i graduated from collage. I save approx 15% of my salary, sometimes more. I just reached my savings goal for age 45. I'm not on track for college savings at all but everything I've read said max out your retirement contributions first so I did. My son is going to start at a community college the year after next and I should be able to swing that with his father's help.

I just wanted to say even small amounts of retirement savings grow and compound over the years and it's so worth trying to save as much as you can. Hope this helps someone

 

[Buzzsgramma]

Absolutely....max out that 401K.....start early....

 

[tvguy]

35 years of about 15% every year into IRA* (before there were 401ks) and into 401K's when they became available. Conservative investments and all, our retirement plans grow by more than we make per year, and have for about 10 years. And we never missed the money.

*When we started IRAs were capped at $1,500 a year, not a percentage like 401k's.

 

[abmitch01]

someone gave me the book Financial Planning for Dummies after graduating from college. It covers the basics and it worked for me. I've read other books but this one is good for people just starting out. For me the key has been a portfolio of low cost Vanguard index funds.

my ex-husband always put his 401k in money market account. He's older than me. He's all upset because he says he'll be working til he dies. I'm hopefully on track to retire at 62. That would be a huge luxury

 

[lauradis]

Happy dance for you

 

[abmitch01]

thanks!

I'm aiming to retire at 62. Only 18 more yrs to go, lol.

 

[lauradis]

thanks!

I'm aiming to retire at 62. Only 18 more yrs to go, lol.

Married to a fireman he plans on retiring in about 13 years, we have been doubling what is required for 10 years to make it.

friends and family think we are nuts because he will only be 55-56 years old.

the sad part is the avg retired firefighter dies around 67, from the over exposed to chemicals and off gassing, heart attack, etc

keep it up don't forget to enjoy life now too

 

[tvguy]

Married to a fireman he plans on retiring in about 13 years, we have been doubling what is required for 10 years to make it.

friends and family think we are nuts because he will only be 55-56 years old.

the sad part is the avg retired firefighter dies around 67, from the over exposed to chemicals and off gassing, heart attack, etc

keep it up don't forget to enjoy life now too

Firefighters and cops here in California pretty much are "encouraged" to retire after 30 years or age 50. Their pension maxes out after 30 years, they get 3% of their final years pay for every year worked so the cap is 90% of final year's pay, with free healthcare for them and family for life. Very few stay retired, they start their second careers then. Much easier to try that less secure job with that pension coming in to cover your bills.

 

[lauradis]

Firefighters and cops here in California pretty much are "encouraged" to retire after 30 years or age 50. Their pension maxes out after 30 years, they get 3% of their final years pay for every year worked so the cap is 90% of final year's pay, with free healthcare for them and family for life. Very few stay retired, they start their second careers then. Much easier to try that less secure job with that pension coming in to cover your bills.

Yes, I'm not worried. I think he will conti. to teach classes at his second job after retirement, but really I just want him to be happy.

Present plan is to ditch everything and buy an rv for while. lol

He started little later due to joining the military.

Insurance is presently 400 month, 12% annual contributions, 3 highest 3 years pay out of 68%. Not totally controlled by state. Max years in is 30 so they have to leave at 62 years old. plus buy back of sick time up to 1500 hours.

presently put in another 10% to retirement account not connected to fire service.

Yea that's right we putting 22-25% annually of before tax money into retirement, really pisses me off when people say that can't come up with the normal 3% or fireman and police have a such great retirement. yea duh so would you if your invested over 10 of pre tax money every year.

 

[Richard M Nixon]

The typical suggestion isn't necessarily max out your workplace retirement account (401k max is 17.5k a year) but to max out your employer contribution. If they match you up to 6% salary, then aim for that. After you hit that limit, it's generally advisable to then try and max out your IRA rather than keep going with your workplace plan. The reason is that your workplace plan likely has very limited investment vehicles (some only have target date funds, others may only have a few select mutual funds, etc.). You'll be paying management fees for your investments along with a possible fee for even having the account in the first place. With an IRA you can invest in a more diverse range of choices, including equities, options, bonds, forex, and more.

Once you've capped out your IRA, some people like to go back to maxing out their 401k or similar, but I would suggest something different. Yes, a pre-tax plan will reduce your taxable income by a bit, but you're faced with limited options once again. I'd put leftover cash (after monthly expenses, IRA, and workplace fund) in a self-directed investment account and work with it. You'll pay standard capital gains taxes, but you will have a much better chance of higher annual returns from having the freedom to steer yourself.

 

[abmitch01]

I have a Roth IRA and a traditional IRA for just these reasons

 

[tvguy]

The typical suggestion isn't necessarily max out your workplace retirement account (401k max is 17.5k a year) but to max out your employer contribution. If they match you up to 6% salary, then aim for that. After you hit that limit, it's generally advisable to then try and max out your IRA rather than keep going with your workplace plan. The reason is that your workplace plan likely has very limited investment vehicles (some only have target date funds, others may only have a few select mutual funds, etc.). You'll be paying management fees for your investments along with a possible fee for even having the account in the first place. With an IRA you can invest in a more diverse range of choices, including equities, options, bonds, forex, and more.

Once you've capped out your IRA, some people like to go back to maxing out their 401k or similar, but I would suggest something different. Yes, a pre-tax plan will reduce your taxable income by a bit, but you're faced with limited options once again. I'd put leftover cash (after monthly expenses, IRA, and workplace fund) in a self-directed investment account and work with it. You'll pay standard capital gains taxes, but you will have a much better chance of higher annual returns from having the freedom to steer yourself.

Wow, I have never seen an employer match higher than 3%. 6% would be awesome. My financial planner just shakes his head at my bizarre "conservative" 401k mix.. we have 20 fund options and company stock.....up 34% the past 12 months, averaging 16% over the last 8 years. It's a mix he says he would never ever recommend, but clearly it is working, but I did use the dart board method of picking the funds and percentages.

 

[eliza61]

Does anyone read kiplingers magazine?

Well this week was very interesting. seems like Americans aren't all retiring to the poor house or working until 70. seems they've reevaluated all those doom day reports.

I'll link if I can

http://www.kiplinger.com/article/retirement/T047-C000-S002-how-much-you-need-to-retire.html

 

[eliza61]

Wow, I have never seen an employer match higher than 3%. 6% would be awesome. My financial planner just shakes his head at my bizarre "conservative" 401k mix.. we have 20 fund options and company stock.....up 34% the past 12 months, averaging 16% over the last 8 years. It's a mix he says he would never ever recommend, but clearly it is working, but I did use the dart board method of picking the funds and percentages.

My company matches dollar for dollar for the first 6% and every year you contribute at 6% they give you an extra 3% bonus.
We were #4 on Bloomberg's best company 401K's

I'm done in 5 years.

Can't wait. I'll be just shy of 60.

 

[undertheradar]

Yes, I'm not worried. I think he will conti. to teach classes at his second job after retirement, but really I just want him to be happy.

Present plan is to ditch everything and buy an rv for while. lol

He started little later due to joining the military.

Insurance is presently 400 month, 12% annual contributions, 3 highest 3 years pay out of 68%. Not totally controlled by state. Max years in is 30 so they have to leave at 62 years old. plus buy back of sick time up to 1500 hours.

presently put in another 10% to retirement account not connected to fire service.

Yea that's right we putting 22-25% annually of before tax money into retirement, really pisses me off when people say that can't come up with the normal 3% or fireman and police have a such great retirement. yea duh so would you if your invested over 10 of pre tax money every year.

TVGuy was talking about the almost broke state of California. The average CHP and firefighter retirees are retiring via disability retirement at very young ages(near 50). Many of the retirees go on to local, county or state jobs, "earning" another pension. There are retirees receiving pensions of $200k+ per year. The lists of who receives them is on state websites.

As for sick hour buybacks, most employers are snooze/lose application. Based on a 40 hour work week, that 1500 hours equates to 37.5 weeks of extra pay. Until several years ago, those buyouts were being added to the severely inflated final 3 years with CHP and firefighters working every possible billable overtime allowed. This was an abuse that needed to be stopped. The local retired fire captain who lived 2 houses away from me had a yearly pension of $216k when he retired due to disability at age 52. Much easier to plan for retirement when someone else foots the bill.

As for employee match: my wife's employer matches 7% against the employee's 5%.

 

[tvguy]

My company matches dollar for dollar for the first 6% and every year you contribute at 6% they give you an extra 3% bonus.
We were #4 on Bloomberg's best company 401K's

I'm done in 5 years.

Can't wait. I'll be just shy of 60.

5 years here too, but I will be 62, but only IF healthcare costs don't go through the roof. That will be the deciding issue until we hit 65 and qualify for Medicare.

 

[lauradis]

TVGuy was talking about the almost broke state of California. The average CHP and firefighter retirees are retiring via disability retirement at very young ages(near 50). Many of the retirees go on to local, county or state jobs, "earning" another pension. There are retirees receiving pensions of $200k+ per year. The lists of who receives them is on state websites.

As for sick hour buybacks, most employers are snooze/lose application. Based on a 40 hour work week, that 1500 hours equates to 37.5 weeks of extra pay. Until several years ago, those buyouts were being added to the severely inflated final 3 years with CHP and firefighters working every possible billable overtime allowed. This was an abuse that needed to be stopped. The local retired fire captain who lived 2 houses away from me had a yearly pension of $216k when he retired due to disability at age 52. Much easier to plan for retirement when someone else foots the bill.

As for employee match: my wife's employer matches 7% against the employee's 5%.

We do have double dippers. When you do the math my husband only has a 30% chance of breaking even on his fully funded retirement. Plus he pays full social security and the projection are he will collect is about $400 a month.

How about the private sector? What is your projected for collection on 100k job for 25 years of paying into social security?

 

[eliza61]

We do have double dippers. When you do the math my husband only has a 30% chance of breaking even on his fully funded retirement. Plus he pays full social security and the projection are he will collect is about $400 a month.

How about the private sector? What is your projected for collection on 100k job for 25 years of paying into social security?

As always I think it depends. My company just stopped offering pensions to new hires but us old folks, are grandfathered in. Basically we have a magic number. 85. Meaning your age plus time gas to equal 85. Your pensions is based on your last three years salary. A research fellow is easily making 150k a year. Early retires take a hit

Many come back as consultants but they don't earn a second pension. I have a friend whose husband also works for the company, she took early retirement, came back as a consultant so is easily making over 100k and since her husband is still a full time employee, she gets her medical through him.

Overall though it's getting rarer simply because defined pensions are becoming a thing of the past

 

[tvguy]

. Plus he pays full social security and the projection are he will collect is about $400 a month.

The minimum social security benefit is $804 a month, and then, only if he never made above minimum wage his entire life.

http://www.ssa.gov/retirementpolicy/program/special-minimum.html

 

[manning]

The magic word....COMPOUNDING.