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@lefeymw: I am embarrased to admit that DH and I just recently started talking about this and saving, at 25 and 26. :-( I think we are on the right track now, just wished we would have started sooner!
Its hard to look at isnt it?
If you have 30 years to save, and you save 15% of your income, you will only replace 50% of your current income
http://www.usatoday.com/money/perfi/retirement/2005-02-10-mym_x.htm
Earlier the better! But the more I read, the more depressed I get.
Chris starts saving today and saves for 10 years. But Leslie waits 10 years before starting to save. Both will have put away a total of $33,000. After 20 years, Leslie, the procrastinator, will have accumulated $49,534, whereas Chris, the early starter, will have accumulated $106,941. That’s more than twice as much available for retirement with the same initial investment.
@lefeymw:We went over this earlier this year and it's absolutely insane and so depressing!!! Especially if you plan to travel/do things that require more money than just surviving…which we definitely want to do!
I only put 3% away. And I took some of it out for a down payment on our house. I don't stress too much about it because I am living now. I may get sick and not even see that money. I know that I am being as responsible as I can be. Some people do not even have a retirement account. Do what you can. And don't stress about it. But that's just my opinion.
@Carolyn72: I would like to have that approach, but what if you need help and don't have the money? Are you relying on kids? who may or may not have the money to help you? Medical, food, housing or otherwise? Are you relying on the government to make sure you have the necessities?
Do you want something special for your retirement? Do you want to be able to travel the world? or to see distant family?
EDIT: One of my volunteer activities is handing out groceries to sick HIV patients, some of whom are older. Its sad because its the only food they get and the only thing they get to "do" for lack of money. I really dont want to be one of those people.
Ugh, yes. I'm lucky enough to have started young-ish at 20. FI however hadn't put any away until we started dating when he was 31. I'm also lucky enough to get an employer match, but this quarter was so bad with my portfolio that I literally lost all of the match for the quarter, no gains. That was depressing.
I plan on slowly ratcheting up my contribution after we're done with wedding savings, a percent or so a year. This year I think I'm at 6% with a 4% employer match (maxed out), so 10% total. Eventually I want it to be closer to 20% with the match as gravy.
I don't work and my FI saves nothing... currently we can't. Maybe when were in our 30's we can start saving but he plans to work until he's too ill. He doesn't want to retire.
I would say if by chance he ever decides to retire and we had the money we would travel but my grandmother rarely goes anywhere now that she's 70 and my grandfather is about to retire. I just want to live it up and travel now while I still can.
I contribute 6% (the amount my company matches up to) to my 401k and so does my fiance and we both get pensions through our jobs (very blessed for this). I've been contributing to my 401k since I was 18 years old and I'm 23. We plan on buying a home in the next 1-2 years and paying it off before we retire. So we don't have to pay a mortgage from our retirement accounts. We will also up our percentage amount as we receive pay raises.
@MrsWilson2012: Very well organized... so you dont plan on moving from your current location? That helps a ton in future expenses!
I saw recently on the Today Show that its more common for retired people to have mortgages than in the past, which may explain why the money issues many people have later in life that others did not.
I have been saving for my retirement since I was 18 contributing the max every year into my 401k. Luckily for us we will be able to retire early and still have 70% of our income now each month, which should allow for us to live very comfortably assuming we have paid our mortgage, which is obviously the plan by retirement.
Mr.ND just landed his first post-grad job less than a year ago, and I'm still in school *last year, woohoo!* I am very much a saver and long-term planner, though, so once we're married, you can bet we'll be contributing hard-core to our retirement.
I really liked listening to the Total Money Makeover, it'll be nice to actually be making money and being able to put the plan into action.
At this point, I have some money in an IRA and a few CDs, but we are currently living below the poverty line and there's not a ton of money left after each check to put toward retirement. I'm not worrying about it right now because there are more pressing issues (like eating, having a roof over our heads, and paying back student loans).
Has anyone figured out the year (about) they want to retire? Or the dollar amt they need? Or decided on what they think they will realistically be able to do?
would like to retire at 63 and ideally still be able to do part time consulting type work. i love my job. and i am shooting for 100% of my current income. Fingers crossed.
@lefeymw: We're hoping to be done having kids in time to have them all graduated and out of the house by the time we reach 50. So if we work another 10-15 years after that, I'd be good with that, and then enjoy the rest of our years in retirement.
These are of course lovely plans, but who knows what life will throw us. We'll just keep saving, adjusting our plans, and making things work.
DH started putting 15% (maybe?) yearly at 23. His dad also has a matching agreement which really helps us and I think his work matches a little bit. It's in some sort of plan- I let DH take care of this sort of thing because accounting stuff and I are NOT friends, and right now he's the only one making substantial amounts. We should at least hit even this year despite the downturn in stocks.
We're hoping for a small hobby farm with a couple horses, dogs, maybe some sheep or goats. NO CHICKENS. DH wants to travel a bit but I don't travel that well. He wants to retire at 65, but I get more joy out of my field so I expect to stay in a few years later.
@lefeymw: Exactly! We plan to purchase a home, raise our future kids in it and stay until its paid off. We won't retire until its paid off. We are aiming to retire at 65 at the latest.
I agree that your retirement money can get eaten away really fast when having to pay a mortgage every month. Just think of all the extra cash you could have each month without paying rent/mortgages even now.
I will pay off my mortgage this year. Both of our cars are paid for. No student debt. Anything we put on a credit card is for convenience, points or airmiles and is paid off every month.
I am very happy with where we are financially. I will keep working part-time as long as I enjoy my work. SO can't see himself not working at least part-time. He really loves the social aspect of his job.
I'm 20 and have had my RRSP going for two months, paying in $150 a month. My pay-out in 40 years if I never decided to put in more money (obviously at some point I will up my contribution) is $850,000.00.
I know it's not a whole heck of a lot of money since the CPP will be long since dried up in 40 years, but it's better than nothing!
According to my financial planner, if my husband and I want to retire at age 60 (in 2044) and replace 100% of our income, we will need $6.5 million in our retirement accounts. This will allow us to pull our yearly income out of soley the interest earned on the account.
We talked with a financial planner and have an idea of how much we need to have saved. It's depressing, but at the same time, it's over the course of 30-40 years.
We've been saving a little bit through work. DH has a retirement fund similar to a 401k, but specifically to the military which he contributes to. Right now it's 3%, but eventually we'll amp it up once we get a little more secure with our cash savings. Plus, if he stays in, he'll get a pension separate from that. I have a retirement account also and contribute 8%.
Our plan is for us to always live exclusively on DH's income. My income will always go to paying off debt and savings. Once our student loans are paid off in about 3-4 years, my income for the rest of my life will go exclusively to our savings/retirement/future mortgage. This should enable us to save much more!! It means we live frugally now without many frills, but we'll be comfortable and will be secure throughout our retirements.
My work only contributes a max of $400 a year to my 403B, our retirement benefits suck! But, what we lack in retirement is made up with free health insurance for me and my partner and any kids we have in the future. I contribute 6% right now. Every year my contribution goes up 1% automatically. I hope someday I'll be at a job with better retirement benefits. I plan to retire at 68-70 depending on my health. However, because I have a chronic health condition that has caused me to have to take long leaves of abscence from work I don't know if I will be able to make it working that long. But, I'll do the best I can.
@lefeymw:You really shouldn't buy if you're planning to move within 3 years. The transaction fees are killer. It's really likely that you'll save money by renting for now.
Since we're so young it seems a little futile to get too focused on exact numbers since with a 40+ year time horizon there are so many assumptions. However, we both max out all of the tax sheltered vehicles available to us and put extra aside as well (we both make good incomes but we live a modest lifestyle so we save/invest about 40% of our total income).
When we decide to retire is really going to depend on things like if we decide to have kids or not. Ideally, we'd love to be able to get to a point in our careers where we are in demand enough that we can work part-time. Of course that's difficul to achieve, it's a bit of a dream.
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Have you figured out how much you need to retire comfortably?
I am not asking you to reveal #'s if you are not comfortable, but at what age to you want/expect to retire.
What do you expec to DO in your retirement? Travel? How often? Where? Buy presents for kids, grand kids?
Have you figured out how much you need either to live on interest the principal pays off or to live off the principal?
What do you expect to pay for your retirement? 401Ks? Your own savings and investments? IRAs? Do you rely on social security? unions? etc?
We were just going over our finances and we do well, but its amazing how much we need to save each year to meet our own retirement requirements.
I know we live a lot longer and still want to retire relatively early, but its amazing how much above our 401K we need to save (assuming no social security), but its depressing. We have to decide between retirement the way we want, or buy a house (because if we buy now we will be moving within 3 ish years can we save enough for another down payment) etc