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When I read all these stories about retirement I get really scared that I won't be able to do it.
Husband just came here from England 6 years ago and has had problems finding jobs. He has a lower paying one for now and I just finally started working at a public school, but who knows how that will go. They like to take out a lot from my check, but don't know if that will be there when I'm older.
I came from a very poor family so they never saved anything for me and we've both been struggling. Now we are starting to think about buying a house and retirement. We haven't even had a child because it doesn't even seem possible at the moment.
I already opened a roth IRA and will put in as much as I can. I just feel like we'll never make it now because we're a bit older.
Does anyone have any words of wisdom for getting on the right path?
I see your location is listed as New Jersey, which is a pretty high cost of living area. I would suggest looking into relocating to a lower cost of living area, such as the midwest, where more of your income could be put toward savings and less into taxes, etc. Sometimes the salaries are also lower in those locations, but often the COL is low enough to allow you to still come out ahead.
When I read all these stories about retirement I get really scared that I won't be able to do it.
Husband just came here from England 6 years ago and has had problems finding jobs. He has a lower paying one for now and I just finally started working at a public school, but who knows how that will go. They like to take out a lot from my check, but don't know if that will be there when I'm older.
I came from a very poor family so they never saved anything for me and we've both been struggling. Now we are starting to think about buying a house and retirement. We haven't even had a child because it doesn't even seem possible at the moment.
I already opened a roth IRA and will put in as much as I can. I just feel like we'll never make it now because we're a bit older.
Does anyone have any words of wisdom for getting on the right path?
I say live below your means versus at it. Do not try and keep up with the Jonses in any way.
Do not fall into the oh poor me. Life is against me so I will get drunk/stoned to feel better. Stay away from those that do such even if family.
Realize not all were meant to, want to, need to have children. Devote your time and effort to making money even if it takes an extra job to help. Make money while you are young so you two can sit back later and enjoy life maybe even earlier then most. Even a few nippers at a fast food/pizza place can get very expensive. Forget advanced education for them.
Buy a less expensive home in a nice neighborhood versus the most expensive one. Learn to do all home maintainence yourself verus hire someone. Learn to appreciate an adult beverage and a good meal at home sitting on your own deck, looking at the great landscaping work you did that day. Ask the other if they ever had sex on newly mown grass....LOL
Buy less expensive new cars versus expensive new/used. Keep it well maintained plus keep it for say 8-10 years. I rather buy cheap new, then expensive used.
Develop and use less expensive ways of dining, entertainment, vacations, etc. versus the more costly methods. Like use the Y versus an up market athletic club. Try local, family restaurants versus more expensive ones. Take short, local drive vacations. Use less expensive hotels for them. Become a gourmet cook where your meals rival anyones and cost way less.
Develop social friends with the same goals/tastes.
Invest in solid, blue chip type offerings. IRA's with top line, no load mutual funds. Fortune 500 companies. Do not take flyers on never heard of, make a million dollar types of deals/stock.
First thing you need to do is make retirement savings a priority. Adjust your standard of living to what you have left. Lots of good suggestions in the previous post.
Since your income is low, use a tax-deferred Traditional IRA. You can't afford to be paying taxes now. If your income remains low, your retirement income won't be that great either and there will be little, if any, taxes due. There are ways to minimize the tax bite on retirement withdrawals, as well. Worry about that when the time comes. Many retirees don't pay income taxes. If you have that problem, you're doing well.
Right now, you should be doing everything in your power to educate yourself on tax-saving ideas to minimize any taxes you do pay during your working life - because you can't afford to pay taxes - and that means maxing out tax-deferred retirement accounts, not Roths - and putting those tax savings effectively to work in the retirement/emergency fund account.
Home ownership is definitely not for everyone. Remember any home you buy requires maintenance and upkeep expense which can be considerable, not to mention property taxes which can often be the amount of rent.
I agree with the idea of moving where the unemployment rate and COL are lower. NJ has a high rate of unemployment, more or less stuck at 9%. However, jobs don't grow on trees, either. You need money and a job waiting in order to move.
Make saving a priority, live way below your means, and you'll make it.
OP: Be of good cheer, time is on your side, if you use it.
My $0.002:
Concentrate on
1) Expense control. With the (maybe) wisdom of my years, many of life's greatest pleasures don't require money.
2) Religiously saving whatever you can - pennies add up and grow to dollars (simplistic but quite true). There are an almost infinite number of advice sources for money management - the best and simplest by far has already been mentioned - live below your means, whatever level that may be.
3) Develop a plan with specific goals - avoid and eliminate debt, pay down the mortgage, whatever - but know that to get from point A to point Z won't happen without a concrete financial plan.
4) Don't despair at your immediate situation - you have time on your side. Use it wisely and enjoy the life you have today.
JMHO
I'm almost twice as old as the op's avg age and I got serious saving at about age 35. I am now comfortable. My rule has always been, pay yourself first. Get rid of the cable tv, internet, smart phone, etc and invest that money. You don't have to have all of the toys.
I see your location is listed as New Jersey, which is a pretty high cost of living area. I would suggest looking into relocating to a lower cost of living area, such as the midwest, where more of your income could be put toward savings and less into taxes, etc. Sometimes the salaries are also lower in those locations, but often the COL is low enough to allow you to still come out ahead.
I've thought about Florida. Tampa and Orlando? I've been to the midwest and it didn't really suit me.
First thing you need to do is make retirement savings a priority. Adjust your standard of living to what you have left. Lots of good suggestions in the previous post.
Since your income is low, use a tax-deferred Traditional IRA. You can't afford to be paying taxes now. If your income remains low, your retirement income won't be that great either and there will be little, if any, taxes due. There are ways to minimize the tax bite on retirement withdrawals, as well. Worry about that when the time comes. Many retirees don't pay income taxes. If you have that problem, you're doing well.
Right now, you should be doing everything in your power to educate yourself on tax-saving ideas to minimize any taxes you do pay during your working life - because you can't afford to pay taxes - and that means maxing out tax-deferred retirement accounts, not Roths - and putting those tax savings effectively to work in the retirement/emergency fund account.
Home ownership is definitely not for everyone. Remember any home you buy requires maintenance and upkeep expense which can be considerable, not to mention property taxes which can often be the amount of rent.
I agree with the idea of moving where the unemployment rate and COL are lower. NJ has a high rate of unemployment, more or less stuck at 9%. However, jobs don't grow on trees, either. You need money and a job waiting in order to move.
Make saving a priority, live way below your means, and you'll make it.
actually I make 53k, but husband makes only about 15k with part time work. We're saving as much as we can but it's just that I have school debt, car loan, and small cc debt I'm getting rid of. I'm going to get a second job to help more while i can
I say live below your means versus at it. Do not try and keep up with the Jonses in any way.
Do not fall into the oh poor me. Life is against me so I will get drunk/stoned to feel better. Stay away from those that do such even if family.
Realize not all were meant to, want to, need to have children. Devote your time and effort to making money even if it takes an extra job to help. Make money while you are young so you two can sit back later and enjoy life maybe even earlier then most. Even a few nippers at a fast food/pizza place can get very expensive. Forget advanced education for them.
Buy a less expensive home in a nice neighborhood versus the most expensive one. Learn to do all home maintainence yourself verus hire someone. Learn to appreciate an adult beverage and a good meal at home sitting on your own deck, looking at the great landscaping work you did that day. Ask the other if they ever had sex on newly mown grass....LOL
Buy less expensive new cars versus expensive new/used. Keep it well maintained plus keep it for say 8-10 years. I rather buy cheap new, then expensive used.
Develop and use less expensive ways of dining, entertainment, vacations, etc. versus the more costly methods. Like use the Y versus an up market athletic club. Try local, family restaurants versus more expensive ones. Take short, local drive vacations. Use less expensive hotels for them. Become a gourmet cook where your meals rival anyones and cost way less.
Develop social friends with the same goals/tastes.
Invest in solid, blue chip type offerings. IRA's with top line, no load mutual funds. Fortune 500 companies. Do not take flyers on never heard of, make a million dollar types of deals/stock.
Hope this helps.
Thank you for the helpful advice. I just bought a new car last year so I do hope to keep it for a good 8 years. We have even altered our diets to eat a mostly plant based diet to save more.
I will say you totally lost me on the last part about blue chip offerings and flyers.
I've thought about Florida. Tampa and Orlando? I've been to the midwest and it didn't really suit me.
Why Florida? Wages are horrendously low and unemployment rate is very high 8.7%. Your utility bills will be through the roof - A/C needed most of the time. Had a poster state recently he doesn't miss his $400/mo electric bill. He is now living in Washington State, earning $70k/yr, and loves it. Previously unemployed in GA. Found the job online.
You'd be jumping from the frying pan into the fire moving to FL.
Social safety nets in FL very poor, as well. FL has the third or fourth lowest unemployment benefit compensation in the country and has reduced the number of weeks it will pay, as well.
Unless you are in an in-demand field, Florida is about the LAST place I'd be looking.
Here's is list of UE rate by state. Check out the states with low UE rates.
Sorry to say, some of us can't just expect the great American Dream anymore, without moving - possibly to where you don't want to be - to make your fortune.
Lots of stories on this board about people living and working where the jobs were and retiring to areas more suited to who they were when they retired.
Last edited by Ariadne22; 06-02-2012 at 12:52 PM..
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