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Old 10-08-2018, 06:35 PM
 
Location: Censorshipville...
2,674 posts, read 6,238,435 times
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The way I've done it is to try to max it when I can because I'm not sure I'll always be able to do it. I say this because 5 years ago I was single, today I'm married and have 2 kids lol. You never know what life will throw at you, but getting a big balance early on will let compounding work on a larger amount longer. You may be able to taper off later and still be comfortable, but trying to catch-up after is harder to do.

Another way to look at it is to try to get a list of your expenses for the year. I know it's hard to predict what your expenses will be in the future, just go with what you have today and you can reevaluate as time goes on. Multiply that by 25 and that is the balance you'll need to be able to comfortable withdraw 4% a year. Then try to figure out if you're on track to hit that.
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Old 10-08-2018, 07:03 PM
 
11,813 posts, read 21,381,718 times
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Quote:
Originally Posted by reneeh63 View Post
The only issue then becomes WHERE to save? If you save every penny in retirement accounts that you can't access in an emergency or for a downpayment for a house then you have limited yourself. OP - keep your options open by contributing to your 401k, Roth, and outside of those into emergency and long term savings.
You can pull any and all contributions out of a Roth IRA at any time without penalty. When we first started out that is why we kept some of our emergency funds in it, you are limited to what you can put in so it made sense to stuff it as full as possible early on.
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Old 10-08-2018, 07:10 PM
 
Location: North West Arkansas (zone 6b)
2,661 posts, read 1,986,784 times
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they key here is if you calculate your retirement based off the pension and then leave/get fired/laid off or decide to retire early, you'll have to readjust your calculations to exclude the pension.
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Old 10-09-2018, 12:28 AM
 
5,609 posts, read 8,520,066 times
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Quote:
Originally Posted by Southern man View Post
I've always felt that you should save as much as you possibly can. If you discover later in life that you didn't save enough, then its too late. You are probably assuming your employer's pension plan and SS will be there and we don't have an 08 recession the day you retire. All of the above can happen.
I did (saved greatly) while still living life.

I was very glad when I was medically retired from the Military and then a few years later when worsening injuries completely knocked me out the workforce.
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Old 10-09-2018, 12:35 AM
 
25,960 posts, read 28,359,899 times
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Quote:
Originally Posted by oneasterisk View Post
The way I've done it is to try to max it when I can because I'm not sure I'll always be able to do it. I say this because 5 years ago I was single, today I'm married and have 2 kids lol. You never know what life will throw at you, but getting a big balance early on will let compounding work on a larger amount longer. You may be able to taper off later and still be comfortable, but trying to catch-up after is harder to do.
Yes, this X 1000. I put a lot of money toward debt payoff and savings/investments for most of the last 22 years. Now I don't have to save so hard and I've sort of taken a 'year off' from saving, which will probably morph into 2 years. For me, that means 'only' saving around 10-15% of gross income. It's nice to be able to throttle back on the savings without worrying about it too much. I've seen people with the "I can save later" type of mentality. And few of them ever do it. If they have a hard time saving 10% now, they're going to have a much harder time saving 20% in a decade.

Even if you just save really hard for 5 years, it can make a huge difference down the line.
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Old 10-09-2018, 02:20 AM
 
Location: Central IL
15,038 posts, read 8,396,222 times
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Quote:
Originally Posted by mysticaltyger View Post
Yes, this X 1000. I put a lot of money toward debt payoff and savings/investments for most of the last 22 years. Now I don't have to save so hard and I've sort of taken a 'year off' from saving, which will probably morph into 2 years. For me, that means 'only' saving around 10-15% of gross income. It's nice to be able to throttle back on the savings without worrying about it too much. I've seen people with the "I can save later" type of mentality. And few of them ever do it. If they have a hard time saving 10% now, they're going to have a much harder time saving 20% in a decade.

Even if you just save really hard for 5 years, it can make a huge difference down the line.
It's true that if you save a lot early on then in later years most of your gains are from the market and a lesser percentage from your annual contributions
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Old 10-09-2018, 03:29 AM
 
Location: Mishawaka, Indiana
6,510 posts, read 8,998,243 times
Reputation: 4994
The $60 I contribute to the ROTH IRA is roughly .5% of my gross monthly, I know it isn't much, but prior to my work 401k which I have had for 4 years now, the Roth was the only retirement account I had opened or had planned for.

Thanks for the advice so far everyone, greatly appreciated.
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Old 10-09-2018, 05:29 AM
Status: "Excited to move to Vegas!" (set 4 days ago)
 
Location: Beaverton, OR
5,388 posts, read 5,829,922 times
Reputation: 6006
That MMM link is hilarious in the way that it assumes because you cut costs to save means some permanent thing. Just because I cut cable for 5 years to save money didn’t by any means I wanted never to have it again or somehow just “adjusted” to the annoyance of not having the live sports events I wanted to see at my fingertips. I just sucked it up for 5 years. It’s easy to live a more meager and spartan lifestyle to increase savings and build for a better tomorrow but I think it’s stupidity to assume someone would want to live that way forever. No thanks!
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Old 10-09-2018, 05:36 AM
 
70,830 posts, read 71,210,489 times
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i have always found the MMM site a bit nutty with some real bizarre cast of characters as far as lifestyle choices .
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Old 10-09-2018, 11:31 AM
 
25,960 posts, read 28,359,899 times
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Quote:
Originally Posted by ColdAilment View Post
The $60 I contribute to the ROTH IRA is roughly .5% of my gross monthly, I know it isn't much, but prior to my work 401k which I have had for 4 years now, the Roth was the only retirement account I had opened or had planned for.

Thanks for the advice so far everyone, greatly appreciated.
It's great you opened a Roth at a young age. I didn't do that until my 30s. If I had opened one a decade sooner, I'd have a lot more in there. I really do think increasing the Roth should be a must. Even if you don't max it out, I'm sure could increase your contribution without it hurting too much.
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