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Discussion Starter · #1 ·
My thread about IRAs/401Ks got me wondering about this. What % of your pay goes to retirement accounts other than Social Security? During the first 7 years of my career I contributed about 7%.

Now that I make a bit more money I'll increase that to around 10% but while that dollar amount doesn't seem real big to me in terms of investment capital, I really don't think I could swing much more.

And believe me, I don't live an extravagant lifestyle. Besides a recent stereo purchase, I live quite frugally (no credit card debt, no car payment, modest house, cheap vacations...).
 

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dir-t said:
My thread about IRAs/401Ks got me wondering about this. What % of your pay goes to retirement accounts other than Social Security? During the first 7 years of my career I contributed about 7%.

Now that I make a bit more money I'll increase that to around 10% but while that dollar amount doesn't seem real big to me in terms of investment capital, I really don't think I could swing much more.

And believe me, I don't live an extravagant lifestyle. Besides a recent stereo purchase, I live quite frugally (no credit card debt, no car payment, modest house, cheap vacations...).
100% of mine goes to raising kids. Hopefully they will take care of me when i'm old.
 

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p != b
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6%, which is the maximum amount that my employer matches into my 401k. (they only match 50%, but it's still free money.)

I plan to eventually start saving more, but kiddo #1 is due next year. so 'eventually' means in 20 years or so.
 

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How old are you? When you're younger, you can put aside a smaller percentage and still retire comfortably. If you're starting later in life, then you should put a much larger percentage into it.
My best advice is to put into it all you can, but make sure to also be putting aside money for emergencies (about 6 months of your gross pay or more) so you don't have to use credit cards or other loans for emergencies.
 

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I was at 15% for some time, but 401k policy doesn't allow you to max your contributions if others in your company aren't doing the same

I've found the most I can get left in there is 7-8% (or else I'm just locking up my money for no reason only to get it refunded to me in february)

it's a big tax advantage to maximize your 401k contributions since it's pre-tax money
 

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Gronk SMASH!
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The obvious answer is as much as you can.

Also check with your tax guy about how much you are eligible to sock away pre-tax. Last I checked, it was about $15,000 pre-tax retirement savings allowed per year. I don't remember if that was combined for my wife and I or $15,000 each. Anyway, pre-tax saving works about the same as a tax write-off, so it's a good thing. Past that $15000/yr. mark, you can be a lot more selective in where you put it.

I say this only as a reason to contribute past the minimum your employer will match - up to a point.

Accountants, please set me straight where necessary, of course.
 

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innergel said:
You should be working towards 15% of your pre-tax income going into retirement.
Better yet, you should be working towards the 401k contribution limit. $16,500 for 2010.
 

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We grew up poor. Mom took good care of us but since my father wasn't around, money was always tight and we weren't always sure about our future. I hated being so poor and not having financial security.
so now I'm quite frugal. I put away 40-50% of my income.
I could live a much more extravagant lifestyle but knowing that I am doing something toward my financial future is more important than driving a nice car or live in a bigger house.
nice bikes, on the other hand.....
 

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"El Bwana"
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We're saving for retirement, college, and helping out my mom. Right now its 20% of gross. We've got two kids going to college in 2 and 5 years respectively. My wife works PT and her full paycheck amount goes into savings.
 

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I wish I could figure that out. I am a public employee with a defined benefit pension plan and it would be nice to figure out how much that is worth to me (i.e. how much more i'd need to make and invest if i didn't have it). But each time I start the calculations there are too many variables and my head starts to spin. I do know that the combination of my contribution and my employers is currently about 22% of my salary, but rises when the fund's investment performance decreases so it's due to rise a lot over the next few years.
 

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I shove 30% of my money into a semi- longterm account. It's stuff that I can't touch except for big purchases.

30% of my money goes into a short-term account - 3-6 months out. I use this for things like orders from sponsors.

40% of my money goes for daily living expenses (food, power, etc).

Being still dependent upon my parents, the numbers are artificially high. If I was to include the money they give me, the numbers would be much lower. But I squirrel away every penny I can - I want to be RICH when I retire!
 

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Just Plain Bitter
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All of my money goes to child support, Medical insurance, keeping a roof over my head and feeding and clothing the family I have at home with me now. Retirement is not something I can think about now. I have a minimum of 3 college educations and 3 weddings to look forward to first.
 

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Ti me up
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None. Zip. Zero.

Retirement savings is a huge marketing scam brought to you by financial advisers and the government. Why on earth would you lock your money away where you can't get to it for 40 years without paying a stiff penalty? What if you get laid off from corporate drone-ness and want to use your savings to start a business? Can't do it with retirement savings. What if you have humongous medical bills? Can't get to that money without a penalty.

And who wants to retire anyway? If you're looking forward to retiring because you hate your job, why not change your life now?

We put away plenty in savings...we just don't lock it up in retirement funds. And so I've had plenty of cash on hand when exceptional investment opportunities came my way.
 

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Discussion Starter · #17 ·
CoLiKe20 said:
I could live a much more extravagant lifestyle but knowing that I am doing something toward my financial future is more important than driving a nice car or live in a bigger house.
.
This is what's bugging me. My wife and I have a 1,600 sqft house, no car payments (I drive a 94 Nissan Pathfinder she has a 2001 Jetta), etc. Not extravagant by any means. But MT pays such crap that not much is left for retirement. I'm a 35 yr old with a Masters degree and 8 yrs experience in in environmental consulting. She has an associates and 20 yrs experience in real estate finance and title. We live comfortably but get nervous when we look towards retirement.

If I put 40% of my pretax I'd be on the street.

I know for certain that my salary would go up at least 50% if we moved to someplace like Ft Colins or Reno but we really like it here. I'm sure you can imagine all the pros and cons we weigh.

I'm just trying to get a feel for whether I'm in or near the ballpark of what I need to do to retire someday (without paying for a financial advisor just yet).
 

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Discussion Starter · #18 ·
633 said:
None. Zip. Zero.

And who wants to retire anyway? If you're looking forward to retiring because you hate your job, why not change your life now?

Interesting and valid perspective on where to put $.

But to answer your question - it's because skiing, hiking, biking, and my feeble ukulele and woodworking skills are enjoyable to me but will never pay my bills. And working gets in the way of doing them all.
 

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Yo no fui.
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My ol' lady and I have 18% of our monthly pre-tax income diverted into our retirement funds. We're each 30 years old. We understand this is higher than it "needs" to be, but I'd rather have the option to retire sooner than later. We plan on increasing this amount as our salaries (hopefully) go up.
 

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633 said:
None. Zip. Zero.

Retirement savings is a huge marketing scam brought to you by financial advisers and the government. Why on earth would you lock your money away where you can't get to it for 40 years without paying a stiff penalty? What if you get laid off from corporate drone-ness and want to use your savings to start a business? Can't do it with retirement savings. What if you have humongous medical bills? Can't get to that money without a penalty.

And who wants to retire anyway? If you're looking forward to retiring because you hate your job, why not change your life now?

We put away plenty in savings...we just don't lock it up in retirement funds. And so I've had plenty of cash on hand when exceptional investment opportunities came my way.
an interesting theory

there are tax benefits that you're missing out on, but you're in a situation where you've got more flexibility to work with. If your income is of a level where you're able to contribute to a roth IRA, you'd be a fool to not be maxing out that every year (and the max is so small it's not going to reduce your regular savings by much) the drawback is that if you're above a certain income level, you are not allowed to contribute to a roth IRA

we've all got different theories, but you are paying a financial cost for the flexibility you enjoy (just as the I for example do not have the same flexibilitiy as you would have)
 
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