Saving for Retirement

[JanetRose]

Your retirement normally comes from three sources, correct?

Your job's 401k

Roth or traditional IRA

Social Security

If you have a 401k at work, do most of you also have a seperate IRA account or do you contribute all your savings into your job's 401k?

Thanks!!

 

[golfgal]

We have 401k's, IRA's, an annuity, two small pensions, very healthy whole life insurance policies and social security in our "retirement plan". The 401k's and the IRA's are contributed to, the annuity has a small amount in there for future use (to take advantage of mortality rates today vs in 30 years), the pensions were from old jobs so they are just sitting there (mine is earning 8% so we aren't touching that one ). Social Security isn't actually figured into our plan. If it is still around when we retire-bonus, if not, we are not dependent on that money.

 

[GeorgeG]

I have a good pension and had a 401k from my job and also get social security. Pensions, as we know them, are gradually being replaced by personal plans like 401k. During the time I had my 401k it took two major hits due to the economy so I cashed it in when I retired and used it to buy my house and a bunch of other things things before it took a third hit. I know the house hasn't exploded in value, but at least it's mine and I can use it every day.

 

[bicker]

We put everything into the 401(k)s. I haven't found any advantage for us in adding an IRA to the mix.

 

[Pakey]

We put everything into the 401(k)s. I haven't found any advantage for us in adding an IRA to the mix.

Same here. We max the 401(k)s every year. We do have money in IRAs but it's from a time prior to having the 401(k)s.

We do have separate savings because we save more than is allowed to be contributed to a 401k annually but it is not in any form of an IRA.

 

[Christine]

I max out my 401K. I've checked into also doing a Roth IRA but was told my income was too high?

 

[bicker]

For 2010, if you are covered by a retirement plan at work, your deduction for contributions to a traditional IRA is reduced (phased out) if your modified AGI is:

* More than $89,000 but less than $109,000 for a married couple filing a joint return or a qualifying widow(er),
* More than $56,000 but less than $66,000 for a single individual or head of household, or
* Less than $10,000 for a married individual filing a separate return.

Publication 590

 

[Christine]

Publication 590

Thanks, it appears I can't have one.

 

[*pixie*dust*]

I have a 401K, a Roth IRA and a small investment account I am working on growing. I am trying to plan so that I am fine without adding Social Security into the plan. That way, if it is still around when I retire, I will be that much more comfortable. I am also concentrating on paying down my mortgage.

 

[golfgal]

Thanks, it appears I can't have one.

You can roll over some traditional IRA money into a ROTH IRA THIS YEAR (so you have until Friday ), you can spread the taxes out over 2 years (next year and the year after). It might be worth looking into, quickly, if you anticipate retiring with a healthy retirement fund.

 

[bicker]

I believe that there is an income limit on the roll-overs as well.

 

[golfgal]

I believe that there is an income limit on the roll-overs as well.

Not this year-other years, yes.

 

[MrsPete]

It's a good idea to diversify your retirement investments. That is, it's good to have your money divided into numerous small places rather than one big pot -- if something happens to one of eight accounts, you might have to tighten your belt, but you won't find yourself unable to retire. If you have it all in one place, and something goes badly . . . Well, you're in big trouble.

Having said that, we each have 401ks, I have a good pension, we each have an IRA, and we have stocks. In addition, we have a paid for house, which we will sell when we retire, and we have land for the house we plan to build.

The pension is a double-edged sword. Yes, it's great to know that I will have a pension for life, but I am tied to living in this state. If I move (while I am still working), it'll hurt my retirement. Also, it's impossible to know right now whether I will "win" the pension game or not. I will complete my 30 years at age 57. If I live to be 100 and collect my pension all those years, I will clearly "win" -- that is, I will collect more than I paid in. On the other hand, if I die at 60, the state will keep a good bit of the money I paid in. In contrast, if that money were in a 401k, my children would get to keep the portion I had not used.

 

[Feralpeg]

I retired at age 52. I had a 401k, but I also put a lot of money into stock. If I had not, I would not have been able to retire at such a young age.

If you intend to retire young, I strongly suggest you do not put all of your savings into government regulated retirement plans. I had to pay tax on the sale of my stock, but had my money been in a retirement vehicle, I would not have been able to touch it at age 52 without paying a penalty as well.

 

[aprilgail2]

I have a 457 (like a 401 but you collect younger) that I put money into but I don't have an IRA.I do have a company paid pension which I will be collecting once I retire at 50 ( or in 884 days!). I don't pay into social security so I won't be collecting that but I will be collecting railroad retirement which is like social security but more.

 

[msjprincess]

It's a good idea to diversify your retirement investments. That is, it's good to have your money divided into numerous small places rather than one big pot -- if something happens to one of eight accounts, you might have to tighten your belt, but you won't find yourself unable to retire. If you have it all in one place, and something goes badly . . . Well, you're in big trouble.

Having said that, we each have 401ks, I have a good pension, we each have an IRA, and we have stocks. In addition, we have a paid for house, which we will sell when we retire, and we have land for the house we plan to build.

The pension is a double-edged sword. Yes, it's great to know that I will have a pension for life, but I am tied to living in this state. If I move (while I am still working), it'll hurt my retirement. Also, it's impossible to know right now whether I will "win" the pension game or not. I will complete my 30 years at age 57. If I live to be 100 and collect my pension all those years, I will clearly "win" -- that is, I will collect more than I paid in. On the other hand, if I die at 60, the state will keep a good bit of the money I paid in. In contrast, if that money were in a 401k, my children would get to keep the portion I had not used.

I know what you mean, my mother retired at 54 and died at 55. That's one nice thing about DH's and my pension. We have the option of taking it in a lump sum. So you can figure out how many years you would have to live to break even. We also have the option of taking a slightly lower monthly payment so that our spouse can still collect if we die.

 

[tvguy]

Started with IRA's in 1979 which I still have.
Added a 401k when my employer offered that in the 1980's.
Rolled that 401k money into an IRA when I left jobs.
Currently contribute to a 401k.
Will have social security
Never in 35 years have I worked for a company that offered a pension.

Had the Financial Advisor and CPA I use evaluate rolling over IRA money into a Roth, both concluded it made absolutely no economic sense. The tax bite at my age (over 50) was far greater than just paying taxes as I withdraw the money when I retire when my tax bracket will be much lower.

I hope to have the "problem" my 87 year old mom has. Her social security more than covers all her expenses, but after age 70 1/2 you are forced to make withdrawals from IRA's and 401k's. So she is forced to withdraw money she doesn't need, and pay taxes on it.
I hope to avoid the problem we had with my MIL's IRA...she died before touching it, and 50% of it went to the IRS and State in taxes.

 

[purplegirl247]

I contribute as much to my 401k as my company matches (6%). I also have a Roth IRA that I throw a couple hundred bucks into a month, in hopes of not only diversifying but also for tax purposes (401k is pre-tax and the IRA is post-tax). And I have a teeny tiny index fund at Schwab, mostly just so I can learn how to invest outside of a retirement account, along with several savings accounts that are mostly for emergency "now" purposes (alas, they're only earning like 1.25% now!).

Hope that helps!

 

[arminnie]

We put everything into the 401(k)s. I haven't found any advantage for us in adding an IRA to the mix.

I think there is a definite advantage to doing both if you can afford it. But I would pick 401K over IRA if not.

 

[beaucoup]

We have an assortment from various jobs.

An annuity - was previously a pension which the company converted.
Roth IRA - was previoulsy a Traditional IRA from after tax contributions.
401K
TSP account.


Also have mutual funds from after tax money.