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currently have 28k in my 401k and 20k in my roth ira at age 22 (will be 23 soon).
After doing some calculations even if I max out my 401k and roth ira like I've been doing, I'm not going to have enough for retirement (accounting for inflation it will only be around 1 million...I put this money in index funds and company determined mixed funds which will likely only give me a 6% return).
The company I work for offers a pension if I work there for 5 years (going on my second year), but it caps at 3k/month. Honestly, I'm not even looking at it right now. I don't believe social security will be around when I retire.
anyway, besides that, what other tax saving or profitable ways could I save for retirement? should I just suck it up and put the money is high risk funds?
Last edited by stellastar2345; 07-05-2016 at 07:37 PM..
There's no law against saving for retirement in taxable accounts. Yes, the growth will be slower compared to tax-advantaged retirement accounts, but they will still grow. If you have the disposition to be a landlord, buying real estate for rentals could also be an alternative.
You have 48k in retirement funds at age 22 and are currently maxing both.
If you are not going to have enough for retirement, then virtually no one is.
But sure, if you wish to save more, there are a myriad of other things to invest in outside of retirement accounts. You are young so you can afford to be aggressive with investments, just don't be stupid with them.
Most people your age don't have a decent job. You are probably ahead of 99% of people your age. Just do what your doing and enjoy your life.
You say 3k a month. Do you realize how much you need to have to get 3k a month for the rest of your life? Even if you work there 6 years and get $188 a month at 60 it is something that many don't have today.
currently have 28k in my 401k and 20k in my roth ira at age 22 (will be 23 soon).
After doing some calculations even if I max out my 401k and roth ira like I've been doing, I'm not going to have enough for retirement (accounting for inflation it will only be around 1 million...I put this money in index funds and company determined mixed funds which will likely only give me a 6% return).
The company I work for offers a pension if I work there for 5 years (going on my second year), but it caps at 3k/month. Honestly, I'm not even looking at it right now. I don't believe social security will be around when I retire.
anyway, besides that, what other tax saving or profitable ways could I save for retirement? should I just suck it up and put the money is high risk funds?
The max is 18k/5.5k 401k/ira or Roth are you sure you've been maxing both?
Vanguard or another discount brokerage if you want to play in the market some more. I imagine in a few years you'll be able to get pretty creative and diversify beyond what 99% could do. Stuff I'm not even cognizant of. Mr. Money Mustache and other financially independent types have blogged about them. At your rate you're looking to join their ranks so I'd recommend following up there.
There's no law against saving for retirement in taxable accounts. Yes, the growth will be slower compared to tax-advantaged retirement accounts, but they will still grow. If you have the disposition to be a landlord, buying real estate for rentals could also be an alternative.
I've been thinking about getting another condo back in my college town and renting it out. I currently rent out a room in the condo I currently own.
currently have 28k in my 401k and 20k in my roth ira at age 22 (will be 23 soon).
After doing some calculations even if I max out my 401k and roth ira like I've been doing, I'm not going to have enough for retirement (accounting for inflation it will only be around 1 million...I put this money in index funds and company determined mixed funds which will likely only give me a 6% return).
The company I work for offers a pension if I work there for 5 years (going on my second year), but it caps at 3k/month. Honestly, I'm not even looking at it right now. I don't believe social security will be around when I retire.
anyway, besides that, what other tax saving or profitable ways could I save for retirement? should I just suck it up and put the money is high risk funds?
Your calculations are not accurate. You are 23 (soon). That gives you 42 years to invest if you assume retiring at 65.
From a base of 48000, if ALL you do is max out your IRA you will be significantly higher than 1 million at 6 percent (the overall market returns a bit more over time, but with much higher volatility, if you chase your investment mix). If you also do 401k in any significant amount you will be much, much higher.
This is finance 101-I thought you had an economics background? I suspect it could also be a 'humble brag.'
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