When did you start saving for retirement?

[icebrat001]

Reading all the post over on the budget board about finances has really got me worried.


I will be 23 soon and I don't have a retirement account set up (no IRA or 401k), I have a small savings, less than $10k more than $5k but that's it, well not really, their is money for the house we are buying but that doesn't count.

Should I set up an IRA? I'm debt free, same for SO, should I set up one for her too, or should I have just 1 for us?

So when did you start worrying about retirement?

 

[mtblujeans]

YES you should set up an IRA. You won't be able to access it without penalty but there are tax advantages. We are about to set one up for our children and we are hoping it will be a hefty sum by the time they are retirement age!

 

[clh2]

You can never start saving too early for retirement. My DH and I both started in our mid-20's, before we even met each other.

I will also say that when DH and I started, we put in minimal amounts of money, probably in the 5% range. Now, that we are in our mid-40's, that amount is much higher.

The compounding, even with a small % is huge throughout the years.


If your employer or SO's employer has some sort of a 401K or a 403B with a match - you certainly should set aside at least the amount of money to get the max that the employer would match.


Your SO and you would have to have separate accounts if you are going the IRA, 401K/403B's or Roth IRA's. The IRS doesn't allow for co-mingling of retirement accounts.

 

[kdibattista]

DH is 36 and has a good chunk in his retirement account. I'm 29 and just starting mine... I will be opening a Roth IRA.

 

[Jennifer S]

I started with my first job right out of college so did DH. It's gotten quite big already. Start now - even if it's only a little bit.

 

[nordkin]

I was preached to all my life by my father to start saving for my retirement the day I start working. Who says parents don't know anything? Dear dad was right. That money sure adds up quickly when you start at a young age.

 

[Kitty 34]

We started when DH and I got married...in our early 30s.

 

[Feralpeg]

I always tell people this, but most people don't listen. Oh well, here goes.

I strongly agree with the idea of setting up a 401k or an IRA, however I also suggest that you start a separate fund that is not a government directed vehicle. Now, this all depends on how young you want to retire.

If you plan on working until you are able to withdraw from your 401k or IRA without penalty, then this isn't necessary. If, however, you want to retire earlier (remember, the age for withdrawal from a 401k and an IRA will increase depending on when you were born), then you will want to have money that you can live on without penalty until you are old enough to withdraw from the retirement vehicles.

I retired at age 52. Fortunately, I had stock that I was able to sell and that I am currently living on. I do not want to withdraw from my 401k until I am 59 1/2. I know many people who do not have any other retirement funds and they are afraid to retire because they will lose so much of their retirement funds as penalty for early withdrawal.

Whatever you decide to do, the sooner you do it the better!

 

[MagicKingdom05]

I'm 32 now and only in the last 2 years or so have I really gotten serious about my retirement. I have a nice chunked in both my money pension plan and my 401K. I also plan to do a ROTH IRA and just got some info from Fidility on it today.

 

[Toby'sFriend]

there is no greater gift you can give to yourself in old age than starting your retirement fund in your early twenties. Even if you can only put in $50 to $100 a month, you are talking a huge difference in the value of the account at age 65 to 67.

We started in our mid-twenties.

 

[pearlieq]

Run, run, RUN and set up a Roth IRA! Every dollar you save today is worth hundreds in 40 years. These are your best saving years. Even if you can only spare $25-50 dollars a month, it will be the most productive money you ever save.

You really should have separate accounts for you and your SO. I hate to say this, and of course no one wants to think about it, but a lot can happen over 40+ years. If you two were to split up (God forbid!) it will be much easier if you both can go your own ways with your own account. Having to divvy up the retirement account would just add more painful wrangling to an already awful situation. Also, if the unthinkable happens (again, God forbid!) you'll at least have access to your account. I'm not sure what rights of surviorship are like in your area or what your family situation is, but without the same legal protections as a married couple, you might be in for an ugly fight trying to get your share of any joint account.

Good luck and happy investing!

 

[icebrat001]

Thanks for the advice. Okay, roth IRA or IRA? I read about it through my bank (Navy Federal) but i'm still confused as all get-up.

What are the pro's and cons?

 

[JimB.]

I opened an IRA at age 23. Unfortunately, it was pretty neglected during my mid 20's - 30's.

My DD is 17 & we just opened up an IRA for her.

Roth IRA - MOney is taxed up front & tax free upon withdrawal at retirement age.

"Traditional" IRA - Tax deferred up front & taxed upon withdrawal.

There are bunches of income & other restrictions though. Can't have a Traditional IRA if you have a retirement plan at work. Roth's have income limits. Both have contribution limits. The folks at the NFCU should be able to help you out.

 

[Papa Deuce]

Well, I started at age 20, but became seious about it at around age 30. I wish I had taken it more seriously when I was younger, though.

 

[icebrat001]

The APR on an IRA isn't high at all, isn't it better to let the money sit in an ING account? Why is an IRA better?

 

[aprilgail2]

I opened up a 457 when I was 21 and that s the same age I started paying into my railroad pension fund. I cut down by 50 a week what I was putting in my 457 when my daughter was born so I could put the 50 a week into her 527 plan.

 

[Toby'sFriend]

The APR on an IRA isn't high at all, isn't it better to let the money sit in an ING account? Why is an IRA better?

Because the money accumulates interest tax free.

Whether you choose a Roth or a Traditional IRA is dependent upon many factors and different people will recommend different things. In years where our income is low enough to meet the Roth limits, I prefer to invest in that. DH invests in a 401k through work, and we both have money in Traditional IRAs that we have rolled over from past jobs.

If you had consulted with a solid Financial Planner over the house purchase, they very well might have recommended that you save for the house in your IRA, since you are allowed to withdraw money from you IRA for a house purchase penalty free.

The Interest on an IRA depends on what you invest it in. Most of mine are in stock Mutual Funds, which earned around 12 to 16% last year....

 

[scduckman]

Started in with my first real job out of college and had a company match. I put in as much as possible as does DH. We also have a separate retirement account that a certain amt is auto draft every month-- its like we don't even have the money. We each have accumulated a nice chunk of change that will only grow.

The earier you start the better. And as others said putting something aside each month no matter how little is better than doing nothing.

SC Minnie

 

[BuckNaked]

We started as soon as we got married. We started out with traditional IRAs, then rolled them to Roth IRAs when they were created. Now we max out our annual contributions to our Roths, and DH puts the max that his company will match into his 401K.

I read a great comment the other day about saving for retirement...the author said that of the three big expenses people save for - house, college and retirement, retirement is the ONLY one that you can't "pay as you go", that you have to save for.

 

[C.Ann]

It's never too early to start saving.. And when you get a raise? Pretend you didn't and sock that away too.. You're very smart to be thinking about this at your age..