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To cut a long story short, I was in a horrible marriage for 13 years which ended in early 2008. Having to start over with 3 kids and no child support, I financed my way through school while also working 2 jobs, graduating in 2011. While a single mom, there was little money left for debt repayment or savings. I married my current husband (who is wonderful) 2 years ago. We have not combined our finances, because I am determined to not bring him down with my debt. I finally paid off my student loan this past Friday...yay! Now my only debt is < $500 credit cards, which will be paid off this month, and approx $13,600 auto loan. I have about $1500 in Savings, which will help me to not turn to credit cards if something should come up unexpectedly.
I'm feeling somewhat anxious because I turned 45 about 3 weeks ago, and right now I have little savings for retirement...altogether around $45K. This is in two 401Ks and one 403B. (One 401K is from a job not worked since 2008, and the other 401K and 403B are from current jobs.) I've been seriously considering contributing $5500 per year up to age 49 into a Roth IRA, then $6500 per year after that. If I budget carefully, I can contribute the first $5500 by the end of this year (been paying extra on auto loan and next payment is due October 2019.) Then I can contribute around $460 per month to equal $5500 per year. I hope to keep making extra payments to my auto loan and pay it off next year as well. (My ex absolutely loved racking up massive quantities of debt on worthless crap, and my kids and I suffered for it. Now I feel like I'm smothering by having any debt at all.) Then I hope to max my contributions to my 401K and 403B. Then I hope to somehow invest whatever else I am able toward retirement savings, perhaps around $500/month in addition to the 401K/403B and Roth IRA. At this rate, over the next 20 years or so will it be likely for me to have a fairly comfortable nest egg for retirement? My husband has a decent amount saved in his 401K for his age so far, but I want to feel like a good contributor at that time.
BTW, since my part-time job is variable with how many hours are available, I plan my budget around my full-time job. My goal with the part-time job for now is to increase my Savings to at least 6 months expenses. Then I'll probably use that income for some projects I'd like to do around the house sometime, or something of that nature.
If you work until 65, then you have plenty of time to save. If you can, a job with a solid 401k will help you save way more than the $5500 in an IRA, but if you can't do that, well $5500X 20 = $110k just by yourself, your husband matching is $220k.
Retirement is always a tricky thing to get random help with. Will you live below, at, or above the lifestyle of the person offering help (everything they know is geared towards their own life/expectations). What we've done is to find our "bare minimum" yearly budget ($30k for us, that's to maintain the life we have, where we are now, no travel/extras). Once we had that number, it was pretty easy to use different online calculators to understand our potential retirement income and the savings needed to get there. We also have a financial advisor through a managed retirement program with our bank, which is nice to use as a sounding board.
I do want to echo that if you have retirement accounts through work, those will allow you a greater potential to put money into "retirement". If you're doing Nothing else, make sure you contribute enough to get the maximum employer contributions (if any).
Sounds to me like you're basically on the right path for the position you're in right now.
Thanks for your replies and reassurance, Overdog and Brian! I'll check with Human Resources about increasing my 401K/403B contributions for the maximum available company match. Sounds like the next step is to discuss with my husband what our retirement income needs will be for the lifestyle we plan to have, and work with a good financial advisor to help us meet those goals.
In my 20s I did well at saving money for retirement. Then I started having medical issues, serious enough tgat in one rolling 12 month period, I spent a total of 8 mos in the hospital all together. Hard to hold a job, let alone have insurance at that rate.
I went through ALL my retirement and savings, and literally ended up living under a bridge next to RR tracks.
I had to start over again at 30, and again same thing.
Finally, at age 40 I was approved for SSDI. I also got together with my OH ( now my spouse), who had just come out of bankruptcy. So we were a pair! Neither had money, but my OH DID own an old trailer home, and we each owned junker cars. That,was the extent of our assets.
We have together ( me managing the money ) built up savings, retirement and bought a new house home, have two paid for cars, one paid in cash, the other a 5 year loan paid off in 2 years, 3 months, and are doing ok.
I have gone back to work as my SSDI doesn't go very far anymore. I can work part time and not loose it. I can have retirement, burial money and savings up to $20k in my name alone and not affect me. My OH has two jobs and we can have as,much as we can through my OH.
Point of my story IS: don't despair. You are starting 5 years aftere I my last starting over.
As noted, if you work to 65, or to your FRA, you have 20+/- to amass some retirement SAVINGS.
We won't have a lavish retirement, but will do alright.
You won't have lavish either, but should do ok.
( mayvbe look into LTCinsurance, or an annuity for the future to help pay for LTC should you need it. Annuities aren't the best, but money you put in now can pay you a nice stipend later to help cover LTC costs. Wish we had done earlier for that).
Good luck, save well and be "broke" ( saving all extra money) now, and your future will be brighter. Having your retirement come out before your allowed to spend it, makes it easier to be "broke" but filled with savings for the future.
Thank you galaxyhi for your positive and encouraging reply! I've certainly had times of near despair when thinking of where I could be now if things had gone differently in my life and wondering how to catch up. Glad to hear that one can start over and be okay! I just have to assess where I am now, and where I want to be, then do what I need to do to get there.
Just remember, it’s not a sprint but rather, a marathon and you win by knocking off one step at a time. Just keep at it, slow and steady, to win the race.
And damn your ex for not taking care of his obligations. My wife and I separated and it never took a court order for me to pay child support.
To cut a long story short, I was in a horrible marriage for 13 years which ended in early 2008. Having to start over with 3 kids and no child support, I financed my way through school while also working 2 jobs, graduating in 2011. While a single mom, there was little money left for debt repayment or savings. I married my current husband (who is wonderful) 2 years ago. We have not combined our finances, because I am determined to not bring him down with my debt. I finally paid off my student loan this past Friday...yay! Now my only debt is < $500 credit cards, which will be paid off this month, and approx $13,600 auto loan. I have about $1500 in Savings, which will help me to not turn to credit cards if something should come up unexpectedly.
I'm feeling somewhat anxious because I turned 45 about 3 weeks ago, and right now I have little savings for retirement...altogether around $45K. This is in two 401Ks and one 403B. (One 401K is from a job not worked since 2008, and the other 401K and 403B are from current jobs.) I've been seriously considering contributing $5500 per year up to age 49 into a Roth IRA, then $6500 per year after that. If I budget carefully, I can contribute the first $5500 by the end of this year (been paying extra on auto loan and next payment is due October 2019.) Then I can contribute around $460 per month to equal $5500 per year. I hope to keep making extra payments to my auto loan and pay it off next year as well. (My ex absolutely loved racking up massive quantities of debt on worthless crap, and my kids and I suffered for it. Now I feel like I'm smothering by having any debt at all.) Then I hope to max my contributions to my 401K and 403B. Then I hope to somehow invest whatever else I am able toward retirement savings, perhaps around $500/month in addition to the 401K/403B and Roth IRA. At this rate, over the next 20 years or so will it be likely for me to have a fairly comfortable nest egg for retirement? My husband has a decent amount saved in his 401K for his age so far, but I want to feel like a good contributor at that time.
BTW, since my part-time job is variable with how many hours are available, I plan my budget around my full-time job. My goal with the part-time job for now is to increase my Savings to at least 6 months expenses. Then I'll probably use that income for some projects I'd like to do around the house sometime, or something of that nature.
I think you'll be fine, barring something that's truly beyond your control. You've got a propensity to plan. And you have that "fire" in you about doing something. It comes through in your writing. I think "fire" is really the crucial ingredient that separates the people who want to be in a financially good position in life and those who don't. If you've got the fire of desire, the math will take care of itself.
By the way, the math behind retirement is actually pretty simple. It's all about how much you save as a percentage of after tax income. See this article:
OP your plan sounds solid. Follow it and trust it's the best you can do.
I listen to Stacking Benjamins (you should too)... they say all the time (today, in fact!) that the worst you can do is to delay starting.
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