On Track to save for Retirement????

[SB621]

While we seem to be on the topic of savings lately in the HO I thought I would post this chart I found.

Last night I was trying to figure out if DH and I were putting enough away into our 401k's for our age group and I found this chart. It *seems* to be what most financial websites agree with (vanguard, ING etc). We are doing pretty good for our age group but I have to say it/ the numbers looks daunting to me for some reason as everything goes up as we get older. Perhaps I should stop buying jeweler

 

[TravelingGal]

I'm passionate about this topic. Too bad, as this is one topic that if you are not somewhat on track, people generally don't want to listen (and I don't blame them).

Yes, we are on track, and then some. It is SO important to start early. And it's such a bummer that's true because hardly anyone thinks about saving at that age.

I certainly didn't think about retirement at 25. But what I always did enjoy, even back then, was a good "deal". In the 90's Dateline ran a story about retirement planning, and that's when I first heard the notion of compounding interest. They demonstrated (in a simple nutshell), that if you start saving at 25, and stop at 35, that you would have more money at 65 than someone who started saving the same amount at 35 and didn't stop until they were 65.

I didn't actually do the math to see if it was true, but it seemed like a bargain. I mean, really? I could just save for 10 years and then stop? Sounded good to me! So on my 25th birthday, I put 6% of my meager $26,000 salary into 401K. That year, I got a promotion and a "massive" raise to $35,000. I immediately upped my 401K percentage so the bulk of that $9000 raise would go in. I was single, and I'd never miss it. And every year when I got a raise, I upped that percentage until I maxed out.

I've never "missed" the money.

People will say, saving like this isn't practical for most Americans. And I'd say, yeah, they have a point - ESPECIALLY if they try to start saving LATER in life where they are already accustomed to their paycheck being a certain size. Most people can't all of the sudden put 17K annually away for retirement. Not with kids, mortgage, and all the other stuff they have to save for. Not to mention sh*t just happens which derails even the best laid plans.

TGuy was lucky...his first job in the US paid nothing. We survived just fine on his salary added with mine. He got laid off (right when I got preggers!) and then his next job paid 30K more. His first job was a small mom and pop shop with no retirement plan. The new job was at credit union. I made him max out his 401K from day one at his new job. In 5 years, he built up over 100K in his 401K.

Either start young, or rip off that band aid and just do it. Never too late to do something.

 

[rubybeth]

I am very concerned about this, and I am only nearing age 32. I got a later start in my career (finished grad school at age 28 and got promoted a few months later) and my DH is considering grad school for the next few years. Once our debt is fully paid off, I want to start aggressivly saving, half for a house and half for retirement. We also want to pay cash for DH's tuition, if that happens.

Right now, 6.25% of my salary goes into a defined benefit pension plan (employer puts in 7%) and I can take my part of that money if I leave, and DH gets the full match for his 401(k) so we did put away about 10% of our income, but we are more like age 25 on the chart. Perhaps I should not get an upgrade and put that money into my IRA instead. My grandparents will be 89 this year, and my other grandparents died in their late 80s, too, so I am thinking I could be retired almost as long as I spend working.

 

[TravelingGal]

Yes, rubybeth...that's another thing that's tough for younger people...careers are starting later, and they are usually in debt.

But if I can encourage you to throw as much as you can in to retirement, I will. Including that upgrade. Don't get me wrong...I've been reading this forum for 10 years now...since I was 30. I love bling! I spend a fair amount on it. But I was maxed out on my 401K and debt free before I was 30.

I do think people need to enjoy life, especially while young. I love, travel, etc. But first things first...do what you can for retirement before spending money on "luxuries" like bling.

To be quite frank, the chart that Sarahbear posted is actually too LOW for the standard that a lot of PSers will want in retirement. Fidelity last year came up with a chart that got quite a bit of press. Instead of a dollar figure, it gives you a guideline of where you need to be if you want to save 8x your current salary for retirement. Because that will be key...what kind of retirement will you want? Jetsetters will need more income that a couple who plan to retire in a low tax state in a trailer home.

You are 32. In your mind, you have 30+ years to work...practically a lifetime. Well I can promise you that age 40 will be upon you before you know it. And at age 40, all of the sudden you only have 20 years to work (because if you're like me, you're already sort of sick of working and want to retire early), and you think...whoa! That will pass in a blink of an eye!

I promise you, there is NO bling worth having that is better that hitting 40 and feeling you are in a good place financially for the rest of your life. It is the MOST luxurious thing to hit midlife and think, "I'm going to be OK...my kids can worry about themselves...my husband and I are on track to enjoy a good retirement and no one needs to take care of us. We'll be able to spoil grandchildren (fingers crossed) and enjoy travel or whatever."

All the people in my social circle have turned 40, and are in panic mode when they think about retirement (and believe me, they TRY not to think about it.) Some have said they hope their kids will take care of them. Others have told me their house will be their retirement. And still others say they will work their whole life (um...ok.)

I'll never understand the mentality of "Well, I could be dead at 60, so why worry?" Yes, I could be dead tomorrow. But if I'm lucky and healthy in my 60's and beyond, I'm saving for a life where I can bring back toys to my grandchildren from Italy. Or France. Or Zimbabwe.

 

[TravelingGal]

...and the fidelity chart. There are caveats listed...it isn't perfect, but you get the idea.



Fidelity’s retirement guideline is based on a worker using his workplace retirement plan starting at the age of 25.
The plan assumes that this same worker will work and save continuously until age 67.
This person will live to the age of 92.
The ending retirement pool would include workplace retirement plans, IRAs and all other savings.
The investor will make non-stop 6% of salary contributions each year to their workplace plan.
The contribution will increase 1% per year until he gets to 12% (this also assumes an ongoing 3% annual employer contribution).
Fidelity Investments’ models came up with a lifetime average annual portfolio return rate of 5.5%.
Social Security payments are used to figure out the replacement income ratio of 85%.
The investor’s salary increases by an average of 1.5% every year over general inflation.
It assumes no breaks in employment or savings


“The two factors that have the greatest impact on retirement savings over time are starting early and saving consistently… Having worked with millions of workplace retirement plan participants, we know that positive behaviors lead to positive outcomes. Having age-based targets provide benchmarks to help retirement savers stay on track toward their ultimate goal.”

 

[iLander]

I've never understood these figures. Why are they so low?

If you retire at 65 with $500,000 and you spend an average of $50,000 per year, doesn't that mean you're out of money in ten years?

Then what?

Do they think you'll be able to live on interest payments and maintain principle? At today's rates, that's about $7500 a year. I'm not sure my electric bill and water/sewer would be covered with that.

I don't understand these off-the-cuff figures these services give out.

I remember a few years ago, some financial company said the minimum was like $3 million dollars, but then everyone freaked out and they retracted.

My retirement plan is in lotto tickets.

 

[partgypsy]

I agree with Traveling Gal, and when my nephew was going off to college, I wrote him a letter with some wisdom, including not taking out large student loans, and putting yourself (retirement savings) first, spend less than you earn.

Not that I was saving in my 20s. I spent my 20's in grad school and then 3 years as a post doc, so I started late in the savings game. But, at least I am saving for retirement. As far as I know, no one else in my immediate family has saved for retirement, neither of my two siblings who are working, nor my parents (they never had any seperate retirement savings accounts from money for the business, and even took out money from the mortage to pay bills for the business).
So theoretically, I am on track, if I work for the next 20 years, which is not super exciting thought. But at least someday I will be able to retire, which is a different situation from my parents, who, at 70 and 80 something, cannot afford to retire, and most likely will go into debt at the point they can no longer work due to their health.

Sometimes I have fantasisies of getting a bigger house, in particular so at least one of my parents will have a rent-free place to live when they can no longer work. But I don't want to derail my own financial health, so I haven't done so yet.

 

[TravelingGal]

I've never understood these figures. Why are they so low?

If you retire at 65 with $500,000 and you spend an average of $50,000 per year, doesn't that mean you're out of money in ten years?

Then what?

Do they think you'll be able to live on interest payments and maintain principle? At today's rates, that's about $7500 a year. I'm not sure my electric bill and water/sewer would be covered with that.

I don't understand these off-the-cuff figures these services give out.

I remember a few years ago, some financial company said the minimum was like $3 million dollars, but then everyone freaked out and they retracted.

My retirement plan is in lotto tickets.

Yup iLander, too low for many of us. The figure needed to live on interest, I believe, is closer to 2 million dollars.

The chart with the dollar figures can possibly also mean per person.

 

[iLander]

...and the fidelity chart. There are caveats listed...it isn't perfect, but you get the idea.



Fidelity’s retirement guideline is based on a worker using his workplace retirement plan starting at the age of 25.
The plan assumes that this same worker will work and save continuously until age 67.
This person will live to the age of 92.
The ending retirement pool would include workplace retirement plans, IRAs and all other savings.
The investor will make non-stop 6% of salary contributions each year to their workplace plan.
The contribution will increase 1% per year until he gets to 12% (this also assumes an ongoing 3% annual employer contribution).
Fidelity Investments’ models came up with a lifetime average annual portfolio return rate of 5.5%.
Social Security payments are used to figure out the replacement income ratio of 85%.
The investor’s salary increases by an average of 1.5% every year over general inflation.
It assumes no breaks in employment or savings


“The two factors that have the greatest impact on retirement savings over time are starting early and saving consistently… Having worked with millions of workplace retirement plan participants, we know that positive behaviors lead to positive outcomes. Having age-based targets provide benchmarks to help retirement savers stay on track toward their ultimate goal.”

TGal, can you do an example of this? You made my head spin . . .

 

[TravelingGal]

...and the fidelity chart. There are caveats listed...it isn't perfect, but you get the idea.



Fidelity’s retirement guideline is based on a worker using his workplace retirement plan starting at the age of 25.
The plan assumes that this same worker will work and save continuously until age 67.
This person will live to the age of 92.
The ending retirement pool would include workplace retirement plans, IRAs and all other savings.
The investor will make non-stop 6% of salary contributions each year to their workplace plan.
The contribution will increase 1% per year until he gets to 12% (this also assumes an ongoing 3% annual employer contribution).
Fidelity Investments’ models came up with a lifetime average annual portfolio return rate of 5.5%.
Social Security payments are used to figure out the replacement income ratio of 85%.
The investor’s salary increases by an average of 1.5% every year over general inflation.
It assumes no breaks in employment or savings


“The two factors that have the greatest impact on retirement savings over time are starting early and saving consistently… Having worked with millions of workplace retirement plan participants, we know that positive behaviors lead to positive outcomes. Having age-based targets provide benchmarks to help retirement savers stay on track toward their ultimate goal.”

TGal, can you do an example of this? You made my head spin . . .

Use your current income (you and DH) and look at your age. If you are making 200K a year, and you are 40 years old, you need to have 400K at that time in your retirement to maintain your existing life style at retirement.

 

[iLander]

Use your current income (you and DH) and look at your age. If you are making 200K a year, and you are 40 years old, you need to have 400K at that time in your retirement to maintain your existing life style at retirement.

OH! It sounds so simple when you say it like that. Thanks.

People should really look at how long they're going to live, too.

On TV the other day, a statistic was quoted that this year, 2013, a person was born who will likely live to 150 years old. Because of the medical advances out there, we are adding so many years to the end, but we are not adding ways to pay for those years.

I think it's just a matter of time before the Social Security administration starts passing out cigarettes.

 

[TravelingGal]

Use your current income (you and DH) and look at your age. If you are making 200K a year, and you are 40 years old, you need to have 400K at that time in your retirement to maintain your existing life style at retirement.

OH! It sounds so simple when you say it like that. Thanks.

People should really look at how long they're going to live, too.

On TV the other day, a statistic was quoted that this year, 2013, a person was born who will likely live to 150 years old. Because of the medical advances out there, we are adding so many years to the end, but we are not adding ways to pay for those years.

I think it's just a matter of time before the Social Security administration starts passing out cigarettes.

 

[SB621]

I've never understood these figures. Why are they so low?

If you retire at 65 with $500,000 and you spend an average of $50,000 per year, doesn't that mean you're out of money in ten years?

Then what?

Do they think you'll be able to live on interest payments and maintain principle? At today's rates, that's about $7500 a year. I'm not sure my electric bill and water/sewer would be covered with that.

I don't understand these off-the-cuff figures these services give out.

I remember a few years ago, some financial company said the minimum was like $3 million dollars, but then everyone freaked out and they retracted.

My retirement plan is in lotto tickets.

Yes the chart is per person! Also I took it from the chart that I posted that the $ amount did not include the interest you would also be making in your 401k, just the dollar amount you contributed.

For what it is worth I have had my 401k since I was 21 years old and always contributed at least 10%, though I don't believe I have ever maxed it out. I have a Roth that I do max out though. DH started a little later then me at 23 years old. We would like to retire early so we have really started to put more money agressively into retirement. My parents have nothing in retirement so they can't even think about doing so...I don't want to be in that same situation.

 

[TravelingGal]

I've never understood these figures. Why are they so low?

If you retire at 65 with $500,000 and you spend an average of $50,000 per year, doesn't that mean you're out of money in ten years?

Then what?

Do they think you'll be able to live on interest payments and maintain principle? At today's rates, that's about $7500 a year. I'm not sure my electric bill and water/sewer would be covered with that.

I don't understand these off-the-cuff figures these services give out.

I remember a few years ago, some financial company said the minimum was like $3 million dollars, but then everyone freaked out and they retracted.

My retirement plan is in lotto tickets.

Yes the chart is per person! Also I took it from the chart that I posted that the $ amount did not include the interest you would also be making in your 401k, just the dollar amount you contributed.

For what it is worth I have had my 401k since I was 21 years old and always contributed at least 10%, though I don't believe I have ever maxed it out. I have a Roth that I do max out though. DH started a little later then me at 23 years old. We would like to retire early so we have really started to put more money agressively into retirement. My parents have nothing in retirement so they can't even think about doing so...I don't want to be in that same situation.

You know, not only do I feel it's my duty to my daughter to take care of this, but to my parents. My mother feels very much at peace that both her kids will be financially OK at retirement. Me because of my 401K, and my brother as he is a police officer and has a pension plan (he can retire at age 53, the brat!)

 

[Jennifer W]

I think it works differently in the UK, at least in terms of formal occupational pensions. I won't likely be filthy rich, but I should have my needs met and my wants catered for (as long as I don't discover I need and want a private island, I suppose...).

I have an occupational pension scheme that my employer and I both pay into. It's a final salary scheme, so the more I earn during my working life, the better my pension will be. I'm not eligible for a second private pension, and mine is about as good as they get here nowadays, so I'm fine with it. I also have a few years of a military pension scheme I paid into, which I'll leave where it is and draw when I retire.

DH has the same things, only he's older than me, so his terms and conditions are more favourable than mine by quite a long way. Plus he has a private sector pension from his days working in private practice, so we're good. I discovered last month that his private pension will pay out to me if he predeceases me... Hmmm.

 

[Dancing Fire]

depend if you have pension money coming in after retirement.my wife will retire in about 1.5 yr (55) and will receive 70% of her salary + SS by the time we hit 62.we paid off our mortgage in 2004,so right now it cost us about $800 to live in our home.

 

[rubybeth]

I have an occupational pension scheme that my employer and I both pay into. It's a final salary scheme, so the more I earn during my working life, the better my pension will be.

This is how my pension works, too, but of course that could change if laws are changed, though people are usually grandfathered under the old rules.

Thanks for the advice and encouragement, TGal.

I have used various calculators for retirement, and we will likely need about $3 million to retire comfortably and be able to cover medical costs. By my calculations, it's definitely do-able by age 65 but will be easier if DH gets an advanced degree and can earn more. If he does get into this career, we will both have jobs that we can do even if we become physically disabled. That's a big thing with me, because the chances of becoming disabled before retirement age are quite high: http://www.disabilitycanhappen.org/chances_disability/disability_stats.asp

One thing going for us is that we don't plan on having children, so a house and retirement are our only large financial goals. Maybe I will plan on an upgrade for our 20th anniversary... in 15 years. First world problems.

 

[packrat]

JD and I both now have IPERS, which is wonderful..tho, we're both 38 and just now got it last year w/our jobs. I had two small (smaaalllll less than 1000) mutual funds that I put together into one State Farm one just last month, and am now contributing 100/month into it. That's all we've got. Life insurance we could cash in, if that counts. My parents are sitting good..but, they've had lots of help from my grandparents. Most of the people my parents age that are sitting well are the children of farmers, or ones that worked for years and years at the packing house when they were making awesome money and things were way less expensive. We'll never be able to retire. We've never between the two of us made more than 65K a year, and that was when JD was working 7 days a week. Now he took almost a 50% pay cut and even tho I'm now working, my wages don't make up for the cut. Work until we die is our future.

 

[iheartscience]

I was putting 5% in my 403b and 5% in a Roth 403b, but I just upped my Roth 403b contribution to 10%. My employer matches my 403b contribution and also contributes 3% to a pension fund, so it ends up being 23% of my salary. I got started late since my first full time job was at a locally owned place with no retirement, so I'm trying to play catch up now.

I'm going to have my husband increase his contribution to his 401k, too. He's able to contribute more than I am and his employer matches more, too.

Although after the .com bubble burst and the most recent economic collapse, sometimes I think putting more $ into a regular old savings account or CD is a better idea. I should probably get a financial planner, but haven't gotten around to it yet. Not sure I would trust someone more than I trust myself anyway.

 

[april4]

This thread just caused me to double my retirement withholding. Thank you.

 

[TravelingGal]

This thread just caused me to double my retirement withholding. Thank you.

 

[iheartscience]

This thread just caused me to double my retirement withholding. Thank you.

Ha yeah I just upped my husband's too! Always good to get a kick in the pants.

 

[TravelingGal]

This thread just caused me to double my retirement withholding. Thank you.

Ha yeah I just upped my husband's too! Always good to get a kick in the pants.

 

[yennyfire]

I think we are on track. Like TGal, I've been saving since I graduated from college. I'd always maxed out 401Ks and sent any bonus checks to my financial planner. I had no debt (other than a mortgage) and a decent nest egg. Then I met DH, who was the complete opposite. He was in his 30s and, while he had always maxed out his 401K, had saved nothing else.

I told him that we needed to meet with my planner immediately, because financial security was critical to me. I didn't want money to be a source of stress between us. We met with my planner, put ourselves on a strict budget, and for the next few years, completely banked my salary (which was pretty decent, as I was a Program Manager at Earthlink). We set up college funds for the kids we didn't even have yet.

Then the kids came and I become a SAHM. Need I say more???

We had to re-evaluate our budget and savings goals completely. We still max out DHs 401K and his company matches up to 17% (something like that??).

We were told that to retire at 70 (DH doesn't think he'll want to stop working at least part time until then, though I want to be living overseas long before then!), we would need $4 million to get us to the age of 95 with our current standard of living (of course, we may not live that long, but that's what our planner suggested). That number is pretty daunting. We basically need to put $26K of after tax dollars per year into our investments/savings to meet this goal. DH is in sales (COBRA/HIPAA benefit admin. systems), so while he makes a really nice base, most of our savings comes from his commission checks.

As if that's not bad enough, if we want to pay for private college for both kids, we would need $26K per child, per year for the next 10 years to have the $400K we'd need to pay for 4 years of college (private) for each of them (and we already have quite a bit saved). Our planner told us to pay ourselves first, which we are doing, but it's tough to do. We'd really like our kids to have no debt when they get out of college...that would be our gift to them. I started life debt free and it's why I could buy a house at 26. I do hope that they won't choose private colleges, which would be less expensive, but I don't want $$ to be the reason they chose/reject a school.

It's a great topic TGal and I agree that people very often prefer to avoid the subject.

 

[TravelingGal]

Yenny, that's awesome!

The scary thing for me is that I could have done better. My motto at 25, when I couldn't even comprehend retirement, was to just throw money at it and sort out the details later. I need to get a financial planner now, and at age 40, I've finally taken a hard look at where I have my money and what it's doing for me.

Now with bonuses, we're throwing them at college funds, general savings funds, and yes...a little for bling fund (because I *am* working my butt off and deserve a little something.) I know we don't maximize our potential by having our money really work for us.

And we decided only to have one child because we weren't sure we could do it fiscally...it's daunting thinking of what we'll need for college for her, much less two children.

We don't currently own a home (we rent very cheaply in a nice area, and decided this is what works for us now). We are saving to maybe buy something small once space isn't as needed.

Anyway I'm thrilled to hear this thread made a difference to some people (thanks for starting it Sarahbear). I sometimes wonder where I'd be if I didn't stumble upon that dateline story in the 90's. Hopefully someone's life will be changed tomorrow, because of some thinking they did today.

 

[Octavia]

Although after the .com bubble burst and the most recent economic collapse, sometimes I think putting more $ into a regular old savings account or CD is a better idea. I should probably get a financial planner, but haven't gotten around to it yet. Not sure I would trust someone more than I trust myself anyway.

This is my DH's view, and I haven't been able to convince him otherwise. I do understand his fear, but at the same time, there's no real alternative to the market if we want to even just hedge against inflation. He does have a pension, not a great one, but at least it's something. He's fortunate to have had a job that allowed him to save a lot starting pretty young, and even though a lot went to our down payment, he still has a good amount of assets for a person his age. I, on the other hand, worked for a nonprofit after college and didn't make much. I did put a bit into a 403(b) (no employer match) but it was pretty paltry. Rolled it into an IRA when I went to law school, and the value when I finished school was almost exactly the same as when I started, thanks to the recession. When I started working again, I contributed 7% plus a 5% match, and have increased my percentage since then. I also have some going into the Roth fund and some to the regular fund, since I want to balance out taxed and tax-free distributions. I may (fingers crossed) get a bump up in pay soon, and if I do, I might actually be able to come close to maxing out my contributions, which would be awesome. Plus, I will (maybe?) have some kind of pension, Congress willing, but I refuse to factor that or SS into my planning. And we definitely don't plan to keep our current home in retirement, so with a bit of luck we'll be able to sell it and buy a less expensive place outright at that time. I just hate that it feels like even when you try to do things the "right" way, it's still a total crapshoot as to whether it will work out the way you hope or not.

 

[TravelingGal]

Although after the .com bubble burst and the most recent economic collapse, sometimes I think putting more $ into a regular old savings account or CD is a better idea. I should probably get a financial planner, but haven't gotten around to it yet. Not sure I would trust someone more than I trust myself anyway.

This is my DH's view, and I haven't been able to convince him otherwise. I do understand his fear, but at the same time, there's no real alternative to the market if we want to even just hedge against inflation. He does have a pension, not a great one, but at least it's something. He's fortunate to have had a job that allowed him to save a lot starting pretty young, and even though a lot went to our down payment, he still has a good amount of assets for a person his age. I, on the other hand, worked for a nonprofit after college and didn't make much. I did put a bit into a 403(b) (no employer match) but it was pretty paltry. Rolled it into an IRA when I went to law school, and the value when I finished school was almost exactly the same as when I started, thanks to the recession. When I started working again, I contributed 7% plus a 5% match, and have increased my percentage since then. I also have some going into the Roth fund and some to the regular fund, since I want to balance out taxed and tax-free distributions. I may (fingers crossed) get a bump up in pay soon, and if I do, I might actually be able to come close to maxing out my contributions, which would be awesome. Plus, I will (maybe?) have some kind of pension, Congress willing, but I refuse to factor that or SS into my planning. And we definitely don't plan to keep our current home in retirement, so with a bit of luck we'll be able to sell it and buy a less expensive place outright at that time. I just hate that it feels like even when you try to do things the "right" way, it's still a total crapshoot as to whether it will work out the way you hope or not.

Ha, true. I told TGuy that when we retire, it will be because we've made sacrifices along the way...and that SS will be in such a bad state then, that if it's still viable, we won't be eligible. And that's fine by me. Admittedly part of my republican heart bristles that some people who made bad choices will get assistance later when we probably won't, I would rather have that money go to people who need it in general. I don't count on SS for us. If all people collect is SS, it's barely enough to get by in many cases, and that's not what I want for us. We are planning for retirement as if we'll never see a SS check ever.

 

[qtiekiki]

Are the figures in the charts how much you should've saved by the time you are that age???

I've been thinking about retirement on and off the past couple of years. My retirement contribution isn't maxed out yet, but we decided not to up it when the allowance was upped due to furloughs. When DD starts kindergarten this fall, I will max it out since we don't have to pay for preschool anymore.

 

[Dancing Fire]

[quote="TravelingGal|1361833796|

Ha, true. I told TGuy that when we retire, it will be because we've made sacrifices along the way...and that SS will be in such a bad state then, that if it's still viable, we won't be eligible. And that's fine by me. Admittedly part of my republican heart bristles that some people who made bad choices will get assistance later when we probably won't, I would rather have that money go to people who need it in general. I don't count on SS for us. If all people collect is SS, it's barely enough to get by in many cases, and that's not what I want for us. We are planning for retirement as if we'll never see a SS check ever.[/quote]


yep, don't ever count on SS as part of your retirement.

 

[Dee*Jay]

I'm 42 and have 2.3 X my annual salary (not including bonus) in my IRAs/SEPs/401(k) right now. I wasn't good about contributing until I was about 27, so I regret now those first few years that I could have put money away and didn't, but there's nothing I can do about it.

My two saving graces are that even though I max out my 401(k), I can additionally contribute to a SEP since I have a separate stream of income with my real estate business, and the company I am about to go to work for (assuming all is good with the offer letter that is on its way to me Fed Ex right now!) has a pension plan where they put in 12% of your salary in addition to the 401(k) with a 6% match.

Sooooo, hopefully putting all those things together I will somehow be able to retire before I'm 100...

I have to confess though, I am always daunted by those retirement calculators. I think, if I'm doing all this and still don't feel like I can ever get to that number, how do other people do it?!?