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My wife has been working contract and has no 401k/IRA at the moment. I have a 401k with company match. Company matches 100% of first 4% and 50% of next 4%. With an additional add, forgot what they do bit not much(based on your age). So we will ignore.
Obviously first 8%, I currently do 10% (usually). With the match is this a good household amount? Or do I need to consider cutting that number in half?
We will get the wife back on track, just been enjoying the extra cash, since the ride of life has been bumpy the last 2 years.
Much, much more info is needed! There are some great calculators online that can help you figure out how much you need to save monthly to be prepared to retire.
I just ran a typical- but scary- example using one calculator.
Took a 40-y/o worker with a $75k HH income who expects to need $50k per year to retire at 65 and live until age 90. Assumed he had $25k saved already but is saving $500/mo (8%). Also assumed 5% annual return (conservative) and 4% inflation (realistic, but aggressive). Also assumed the amount of money needed in retirement would decrease by 10% every 5 years due to becoming less active as yOU age. Included a $1,000 social security draw starting at age 65, but no pension.
Here's the scary shocker-> in order to catch up and retire on time in the expected lifestyle (66% of current income), this family needs to start saving an additional $4,739/mo ($5,239 total) to have enough saved for retirement!! Yes, you read that correctly. They'd need to save 75% of their gross income to catch up. Yikes!!!
Hopefully you are younger and have a bigger nest egg. Whatever you plan to save is still probably not enough. I'd recommend playing with this calculator to determine your expected retirement needs and the amount you need to crank up savings by.
My wife has been working contract and has no 401k/IRA at the moment. I have a 401k with company match. Company matches 100% of first 4% and 50% of next 4%. With an additional add, forgot what they do bit not much(based on your age). So we will ignore.
Obviously first 8%, I currently do 10% (usually). With the match is this a good household amount? Or do I need to consider cutting that number in half?
We will get the wife back on track, just been enjoying the extra cash, since the ride of life has been bumpy the last 2 years.
Sent from my autocorrect butchering device.
I'd say 10% is on the low end of what's needed, despite the generous match, especially since your wife isn't contributing anything to an IRA.
However, we really do need more info such as:
--How old are you?
--At what age do you want to reach financial independence?
--How much do you have saved for retirement already?
--What assumptions are you making about your rate of return? (I wouldn't go above 8% on the rate of return assumption).
--What percent of your gross income to you expect to replace when you hit financial independence?
I am a huge fan of contributing to the maximum employer 401k match and then opening a seperate account with much less fees and usually a much higher rate of return (USAA, Fidelity,ect) IRA (or Roth if you qualify).
I think you should contribute 100% of the matching and if you don't have 6 months of emergency funds, then build that up till you do. I only say that since you said the last 2 years have been bumpy. If you have a healthy emergency fund, then try to figure out how much you'll need in your retirement years and work towards that goal. I personally am planning on SS not being around so I'm contributing more to my personal retirement accounts. If SS is still around, I'll consider it beer and/or bait money.
I am 29, I have about $13k already
Wife is 30 has about $7k.
Also about $3k in savings bonds and about $1500 in precious metals.
As for bumpy, in the last 14k months.... Car issue( got rid of it got another), first baby, relocated states(rent/bills on 2 houses for 2 months), both of us have new jobs, and I started with about $600 a month in student loan payments.
And to top it off we are buying our first house right now. May expect a month of dual bills and obviously the move costs.
We aren't hurting, but have been frugal for now, two many instabilities, for my taste, and she gets no match anyways, been prepping for our house and well a little laziness to not start here a IRA or 401k.
Sent from my autocorrect butchering device.
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