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We have autodeductions taken from paychecks into one account that goes to retirement fund. We don't even get to see it. This goes into the more "riskier" investment accounts.
The I manually take an automatic 10% out of each remaining check amount and deposit it. This goes into "safer" accounts, mostly longer term and laddered CDs. It feels "good" to manually do it, like I'm actually doing something.
A small percentage gets added to the emergency account.
If I can I save another 5%. it can go in either risky or safe account depending on the whims of the day
By that I mean we usually pick a stock we like and plan to hold for long time and reinvest dividends. But, it can also be thrown into a CD if we want.
Our plan may not be the best, but it sure beats NOT doing something. Being that we are "UPC" {Upper Poor Class} or LMC {Lower Middle Income CLass}.
Right now, in an effort to have the new house paid for in just 2.5 years, our plan is a little curtailed {actually almost all curtailed}, But I don't think we will miss much. And our retirement account is not what I'd call "massive" for our ages, but we have come a long from me being medically broke and homeless, and MOH coming out of bankruptcy. Neither of us had anything to start in our relationship {17 years ago}. LOL now we have assets!
For the last 7 years I've saved approximately 40% of my gross income. I have automatic payroll deductions into a 401k. On the side I max a Roth IRA and invest additionally in a taxable account. I feel I've already saved enough to make myself a multi millionaire in my mid 50's so beginning next year I'm hoping to buy a home and throw all of my monthly investment money besides the Roth into the home so it can be paid off in 12 years. By that time I'll be 40. In addition to this I'll have a public pension at age 55 paying about 60k a year.
We max 2 401ks, 2 Roth IRAs, add to emergency savings throughout the year and add to taxable investments monthly. I may start to donafter tax non Roth contributions to my 401k plan as the plan just recently started to allow inservice withdrawals of this money once per year. The vast majority of it is automated and it makes it easier imo
We are currently saving/investing as much as we spend every year. This includes maxing out 2 401ks + match, maxing out 2 Roth IRAs, contributing to my employee stock purchase plan to get the 15% match, investing my wife's profit sharing bonus each year and we are just to the point where we will be able to start investing some more in taxable investments. So at 32 & 33 I'd say we are doing a decent job of preparing.
Given our current expenses and what we already have saved we are probably about 12 years away from having the option to call it quits and maintain our current lifestyle.
I am all set. I have 5 kids. They love their parents. One of them is going to marry into a wealthy family someday. Then they will support me when I retire.
Last edited by Coldjensens; 04-07-2017 at 02:30 PM..
We have autodeductions taken from paychecks into one account that goes to retirement fund. We don't even get to see it. This goes into the more "riskier" investment accounts.
The I manually take an automatic 10% out of each remaining check amount and deposit it. This goes into "safer" accounts, mostly longer term and laddered CDs. It feels "good" to manually do it, like I'm actually doing something.
A small percentage gets added to the emergency account.
If I can I save another 5%. it can go in either risky or safe account depending on the whims of the day
By that I mean we usually pick a stock we like and plan to hold for long time and reinvest dividends. But, it can also be thrown into a CD if we want.
Our plan may not be the best, but it sure beats NOT doing something. Being that we are "UPC" {Upper Poor Class} or LMC {Lower Middle Income CLass}.
Right now, in an effort to have the new house paid for in just 2.5 years, our plan is a little curtailed {actually almost all curtailed}, But I don't think we will miss much. And our retirement account is not what I'd call "massive" for our ages, but we have come a long from me being medically broke and homeless, and MOH coming out of bankruptcy. Neither of us had anything to start in our relationship {17 years ago}. LOL now we have assets!
So how are you planning for retirement?
Thanks for sharing.
how many years away ? that determines what steps need to be taken .
You don't sound much like lower middle class OP... not with all that saving you're doing....
I guess you can call this Year 1 of a journey towards financial independence. I don't really want to label it as "retirement" because 1) We like to work 2) We have a pretty darn good shot of becoming financially independent 10-15 years before retirement age.
I don't even really want to guess how long it will take us because I could be totally off. We had about $110k in assets in 2011 ($35k in retirement, $60k in cash after selling a house we had just fixed up, $18k new car) and I could have never imagined that through various means (gifted home downpayment, MAJOR home appreciation, career opportunities, discovering personal finance blogs!) that we might see seven digits in assets in late 2018-mid 2019.
Our family has been through a lot of upheavals, but fortunately they were mostly positive. It was nearly all due to my husband and his frequent changes in positions or companies and his insistence to pay off the mortgage as quickly as possible. I can't believe that we actually did that. I remember when we first bought our condo I thought the price was so overwhelming (and we bought literally a month after the housing market had bottomed out!) and then on top of it he was like, "oh we just HAVE to get rid of the mortgage!".
It was sorta crazy.. I mean, we let it gobble up our emergency funds and our (admittedly crappy and expensive) taxable investments.. it took a good 6-9 months to recover from it...
But that's all done and, I have to say, I am LOVING our mortgage-free lifestyle. I remember when I first started reading MMM blog and I was enchanted by his post on how to become FI in 10 years "simply" by saving 2/3 of your income. At that time I read it, I thought "oh yeah, right", but now we're doing it.
I think MMM's idea is to put it all into a taxable investment, but in that we will differ and won't likely meet the 10 year FI status. We will save a considerable amount in a taxable (while still maxing whatever retirement accounts we have access to), but we will likely also buy a rental property in the next five years as well.
1) 401K first, savings and after-tax investing second. I would have to remain working for an employer. Basically, your standard way of employment-to-retirement.
2) 401K, savings, and after-tax investing, whereby the after-tax part exceeds the other two. I will work for no one if it works out.
What I should do for option #2 is buy a cheap house, paid in full, so that the rent/mortgage amount goes 24/7 toward investing. I'm all self-taught, so the downside to that is it took me too long to focus on this part, but it needs to become main part.
After-tax investing is, of course, much more sink or swim -- much, much more -- so if it doesn't pay off, nothing much will change and I'll stay on the average course of option #1. I say I'll know more in about five years which option will reveal itself more.
I am all set. I have 5 kids. They love their parents. One of them is going to marry into a wealthy family someday. Then they will support me when I retire.
Hey now. I was about to congratulate everyone for being so financially prepared for retirement!
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