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Old 06-08-2014, 12:41 PM
 
Location: Great State of Texas
86,093 posts, read 72,612,888 times
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Quote:
Originally Posted by mathjak107 View Post
with all do respect to your mom historically that off the beaten path thinking that all will be gone either from the big market collapse or the gov't has spawned a grave yard full of failed retirements and financial failures in life..

that thinking has prevented far to many folks from helping themselves do better financially and left them quite behind.
Just remember the government has seized private wealth in the past for the good of the country.
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Old 06-08-2014, 12:44 PM
 
Location: Sacramento
13,784 posts, read 23,829,969 times
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Quote:
Originally Posted by catlovr8 View Post
Yes, I would love to max out those numbers ASAP.

My mom has this weird fear though that our 401k's are all going to be taken from us by the government. She gets more into conspiracy theories as she gets older (she's 68).
She actually might be somewhat correct, via stuff like means testing benefits and skewing the tax/benefits program(s).
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Old 06-08-2014, 04:24 PM
 
158 posts, read 215,300 times
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Quote:
Originally Posted by NewToCA View Post
She actually might be somewhat correct, via stuff like means testing benefits and skewing the tax/benefits program(s).
yes, all of these things are things my mother talks about all the time. You all would get along . I know it's been talked about and it is something that I think could happen if things got bad enough; however, I also think it would be remiss to not contribute to a 401k because of these possibilities simply because of all the tax benefits.

Maybe though it's a good idea to have money in a non-retirement based account as well for just-in-case type purposes.
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Old 06-08-2014, 04:55 PM
 
29,829 posts, read 34,918,975 times
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Quote:
Originally Posted by catlovr8 View Post
yes, all of these things are things my mother talks about all the time. You all would get along . I know it's been talked about and it is something that I think could happen if things got bad enough; however, I also think it would be remiss to not contribute to a 401k because of these possibilities simply because of all the tax benefits.

Maybe though it's a good idea to have money in a non-retirement based account as well for just-in-case type purposes.
The
Your mom us not that far off. Seizing accounts no, changing how they operate good chance. Problem is as being noted in another thread many retirement plans are not being used as retirement plans but as tax free savings and investment vehicles. Because so many with pensions are the ones with tax sheltered plans also often the only drawdown is the MRD. Gov't is starving for money to address needy seniors while others hoard money away. Will MyIra work so people begin to save for their retirement? Better hope so, if not the new program for those without their own savings will be a program called YourIRA.
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Old 06-08-2014, 04:57 PM
 
Location: Great State of Texas
86,093 posts, read 72,612,888 times
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Quote:
Originally Posted by catlovr8 View Post
yes, all of these things are things my mother talks about all the time. You all would get along . I know it's been talked about and it is something that I think could happen if things got bad enough; however, I also think it would be remiss to not contribute to a 401k because of these possibilities simply because of all the tax benefits.

Maybe though it's a good idea to have money in a non-retirement based account as well for just-in-case type purposes.
The key is to pay attention about what is going on in DC regarding retirement accounts.
That's near $20 trillion dollars of investments sitting there that the USG cannot touch or tax.

And you should have a mix of retirement and non retirement accounts.
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Old 06-08-2014, 05:29 PM
 
Location: Maryland
282 posts, read 306,621 times
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Quote:
Originally Posted by TuborgP View Post
Gov't is starving for money to address needy seniors while others hoard money away.
I hope you don't mean that the way it sounds. The govt shouldn't be taking people's money and giving it to others, that is punishing success and rewarding failure. A bad idea also know as "moral hazard". It leads to no incentive to work hard and reduces the total economic output. This "sharing of the pie" results in a smaller pie instead of a growing pie that everybody has the oppurtunity to benefit from. A $10/hr job is better than a $10/hr govt hand out. But it causes people to not work for $10/hr when they can get the same money for doing nothing. Less productivity, smaller pie, death sprial of the economy.
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Old 06-08-2014, 06:18 PM
 
87 posts, read 98,187 times
Reputation: 160
The short answer: it depends. Plug your numbers into Compound Interest Calculator and see if you like the results.

At 5% return per year, and assuming you started saving this year, you'll end up with roughly $500K in retirement savings after 31 years, when your husband is 65. A rule of thumb is that in retirement, you can draw on about 4% of your portfolio per year, or $20K in this particular scenario. That's probably not enough to live on, even if you supplement it with SS. Then again, you might get 10% return, in which case you'd have nearly $1.5M.

When I was 26 and earning $75K, I made it a priority to max out my 401k and Roth IRA. You're better off sacrificing now than during retirement.

Caveat: pay off any high interest loans first, especially credit card debt. And stay out of debt (though, a mortgage might make sense).
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Old 06-08-2014, 06:49 PM
 
8,221 posts, read 11,939,052 times
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Quote:
Originally Posted by catlovr8 View Post
We would never borrow from a 401k. the penalty + taxes are ridiculous.
Loans from a 401(k) incur neither penalties nor taxes.

(As long as you repay the loan, of course.)
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Old 06-08-2014, 07:08 PM
 
29,829 posts, read 34,918,975 times
Reputation: 11752
Quote:
Originally Posted by CSRSJim View Post
I hope you don't mean that the way it sounds. The govt shouldn't be taking people's money and giving it to others, that is punishing success and rewarding failure. A bad idea also know as "moral hazard". It leads to no incentive to work hard and reduces the total economic output. This "sharing of the pie" results in a smaller pie instead of a growing pie that everybody has the oppurtunity to benefit from. A $10/hr job is better than a $10/hr govt hand out. But it causes people to not work for $10/hr when they can get the same money for doing nothing. Less productivity, smaller pie, death sprial of the economy.
Hmmmmm, ummmmmm, geeeeeeeee you caught me.
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Old 06-08-2014, 07:16 PM
 
Location: Florida
4,379 posts, read 3,720,561 times
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Quote:
Originally Posted by catlovr8 View Post
So I know historical returns vs. expected returns are something different, but I hear all kinds of things: use 8%, 9%, some even say 12% (which seems ridiculously high). My husband and I make just over 100k, and we both put 6% of our salary into the 401k. He gets a match, I don't. I also have an IRA which I make contributions to here and there, but not consistently.

I've talked to several financial planners but they all say the same thing : "it depends on market conditions, etc.". I just want to know if what I'm doing is enough.

I'm 27, my husband is 34.
I think I would use 8% or 9%. Not 12.
The real answer has to consider inflation.
I would save 15% of pay and not worry about the market.
You should invest in equities.
Go to on line brokers and read their retirement sections.
Search for the safe withdrawal rate. For planning at your age 4% is ok but learn the shortfalls.

Sequence of changes in the market are very important. More than the %.
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