(Closed) Has anyone NOT saved anything for retirement?

posted 8 years ago in Money
Post # 77
Member
1541 posts
Bumble bee
  • Wedding: June 2013

I’m 25 and I don’t either. I’m not entirely happy about it – but I’m working on paying off our debt so in a few years we can be contributing like 15% of our income. Right now I need every extra penny I can get to pay off my student loans. My DH has about 3k in a old 401k from his last job and he’s contributing like 3% right now but he promised me to put it down to 1% in January. Its only temporary tho.

Post # 78
Member
894 posts
Busy bee

Just the fact that you are thinking about this is fantastic! Everyone needs to plan for retirement. I would highly, highly encourage everyone to put away whatever they can for retirement.  If your employer offers any kind of a match, you are leaving free money on the table that you won’t get back.  Compounding interest is a very valuable tool over time.  I have contributed the maximum that my employer matched since I entered the work force. As I got more financially established I increased my contributions and lived way below my means.  I don’t touch my retirement fund even though at times it was very, very tempting.  When I look at my 401k now, it is downright impressive. Having financial freedom is amazing. I applaud and admire how savvy many of the Bees are regarding budgeting and managing expenses. I can’t believe how disciplined many Bees are in saving for their weddings, staying within their budget and finding creative, fantastic solutions and DIY projects.  If you put that much effort into your retirement funds, over time you will be amazed at what you are able to save.  Please, put away anything that you can and stick with it! My financial planner emphasized retirement savings so much that  he recommends retirement savings contributions over college savings plans for our kids.  Wow. Luckily, I have aggressively saved for both but that is how important it is.  It’s never too late to start! Best wishes.

Post # 79
Member
507 posts
Busy bee
  • Wedding: August 2013

Ditto the advice on opening a Roth.  I wish someone had told me that 20 years ago.  Now, I make too much money to qualify for a Roth or even the traditional IRA tax savings.

I did very little when I first got out of school.  I didn’t start contributing to a 401K until I was 26 and then I only did the minimum to get the company match.  I moved up the corporate ladder very quickly and when I got raises, I increased my percent that I was putting into the 401K until I hit the max amount in my early 30’s.

Whenever I found myself with extra money (for example, when my kids finished preschool and I no longer was paying $400/mo for that) the money immediately started being invested in something.  So in that case, I was already contributing the max to 401K so I opened up a 529 for the kids college.  When I got married again and my DH started paying 1/2 the bills, I increased the kids college contributions and opened up an IRA.

The thing that really helped me was to never see that extra money.

I’m now 41 and will be retired at 55.  Together, my DH and I save over $60k a year plus my company puts in a lot of money in matching and profit sharing.  We live very modestly though – never have a car payment, look for deals on vacations, we don’t have all the latest and greatest electronic gadgets, etc.  We live like we still make what we made earlier in our careers.

Post # 80
Member
6109 posts
Bee Keeper
  • Wedding: August 2012

My mom did not open an IRA until she was 58 (she’s almost 63 now).  That was the first time she started saving for herself.  My dad blew all of his retirement before he died at age 58 and left her with $6.13.  Whatever their plan was going to be, it was a major FAIL.  I think my dad thought she could sell the 13 acres they lived on and get cash quickly.

I make it my goal to never ever EVER be any one else’s responsibility, or rely on other people as my back up plan.  I will set up my own long term health care, I’ll find my own nursing home.  Please don’t rely on your future children to figure it out for you.  Pay yourselves first.  I am really upset over the situation my mom is in and upset she wasn’t more proactive.  Probably why I am so vocal about it on here!

Post # 81
Member
136 posts
Blushing bee
  • Wedding: May 2015

Your financial priorities (in order) should be:

1. Insurance (health, home, car, life, disability, etc)

2. Be under 36% debt to income

3. 3-6 months gross salary either in savings or available on a line of credit (credit cards, home equity line of credit, etc.)

4. Retirement savings

5. Buy a home

6. Save for children’s college

 

This is a basic model to get you in a good place financially.  Be sure to remember that compounding on your retirement is very important.  A small amount now can add thousands of dollars by the time you retire.  If you do a Roth or other retirement investment, be sure to pay any annual brokerage fees out of pocket rather than out of the retirement account.  Again, with compounding, this could affect your balance later by a great amount.  Find a calculator online or work with a financial advisor to find out how much you will need at retirement and how much you need to contribute.  Take advantage of any employer matches as that’s basically free money.

 

One thing I would like to point out is that statistically, a lot of people are planning on working past 65, but realistically this is not going to be possible for most of these people.  Do what you can to get what you need in retirement and its always better to overestimate than underestimate.

 

And DO NOT touch that money before retirement.  This is why you need to have your emergency fund first.  I know that it’s tempting to take a loan out on it, but without even seeing the numbers I can pretty much guarantee that will cost you more in compounding than the interest rate on your credit card.  It’s really in your best interest to remove that option in your mind, just pretend that you can’t even do that.

Post # 82
Member
134 posts
Blushing bee
  • Wedding: April 2014

Not even thinking about it.  Last thing on my mind.  Too busy paying student loans.  I expect that I will work forever lol

Post # 83
Member
136 posts
Blushing bee
  • Wedding: May 2015

Also, I just read through some of these posts and want to add that the majority of retired population is living off of Social Security only.  The average SS check is a little over $1000 a month.  Think about that.  Could you reasonably live off of that?  Assuming your house is paid off, think about medical bills, food, medication, any in home care or nursing homes.

We live in an instant gratification world.  Our grandparents didn’t have FHA, they had to wait until they had saved a 20% down payment on a home.  Our current thought is to spend on mortgages and cars first and things we want but don’t need and we let that dictate our budget.  You need to think about retirement as paying yourself first.  Then what you have left after that and savings and necessities is what you can afford to spend on a car or a house payment, etc.

My point of view on this comes from someone who works in finance, has these discussions every day and sees the numbers every day.  It is something you need to make a priority now, no matter how old you are.

If anyone has questions about why I said anything I said, feel free to PM me.

ETA: For example, when I did some calculations for Mr. S about his 401k, the difference between starting then or waiting a year was a $75k difference in how much he would have at retirement.  Huge.

Post # 84
Member
3051 posts
Sugar bee
  • Wedding: February 2015

@LadyBlackheart:  I’m 24 and just started contributing and it’s literally 6% of my part time salary. So yea, not much. But it’s matched. My SO makes 2.5x what I do hourly & works fulltime but she isn’t contributing to a retirement account yet at all. She’s 25.

We do have a good size savings and we’re working on paying off our debt but I’ve definitely worried about the retirement stuff too. You’re not alone!

Post # 85
Member
10627 posts
Sugar Beekeeper
  • Wedding: January 2011

I don’t have anything in an account specifically for retirement.  I have savings though, I don’t feel comfortable without a decent amount available to me if I need it.  Some of that might go towards retirement.  DH has an RRSP.

Post # 86
Member
331 posts
Helper bee
  • Wedding: May 2014

I just recently forced myself to cut back on my expenses and stick to a budget so I could start saving…its never too late!  I’m 27 and I’m now contributing 6% to my 401k since thats what my companies matches and I also have a HSA that I contribute a little to each pay check that I plan to take into retirement with me as well.

 

Even just cutting back on a few dollars here and there will make a big difference in the long run if you start saving it now!  Goodluck!!

Post # 87
Member
1268 posts
Bumble bee
  • Wedding: January 1994

Times are tough!

Post # 88
Member
4025 posts
Honey bee

I started contributing to my retirement at 22. I will continue contributing. Now that I have health insurance and an emergency savings account established, my retirement savings is a top priority. I save 9% of my annual income. We are also saving for a home and a car. But those are secondary priorities.

Post # 89
Member
3075 posts
Sugar bee
  • Wedding: April 2013 - A court...

Me and Dh though were 20 and 21. Were not living paycheck to paycheck, but were trying to furnish our home before we start saving for retirement which is hopefully soin!

Post # 90
Member
5866 posts
Bee Keeper
  • Wedding: April 2013

@LadyBlackheart:  There’s no time like the present to start!  😀

Post # 91
Member
395 posts
Helper bee
  • Wedding: January 2015

I have nothing saved and im 23. im finishing adult school and getting in with the city. so I will be paying into a pension so im not worried at all!! whats the deal with 401k? is it a states thing? lol

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