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Old 06-08-2014, 09:06 AM
 
158 posts, read 214,335 times
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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.
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Old 06-08-2014, 09:35 AM
 
Location: Great State of Texas
86,093 posts, read 72,479,637 times
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When you are young you can take more risk with your investments.
The closer you get to retirement then you think "preservation of capital".

One thing I would recommend though is being consistent with your retirement savings.
Always contribute to your IRA and 401K. Increase the allocations as you get raises until you max out each year.
Never touch the retirement accounts..not even to "borrow".

That's what I did my working career and I got to retire early.

Returns on investments are going to vary each and every year.
The more riskier the investment the greater the return (or loss).
You have to know your tolerance level so you won't panic in a downturn and sell at a loss.
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Old 06-08-2014, 09:45 AM
 
158 posts, read 214,335 times
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Quote:
Originally Posted by HappyTexan View Post
When you are young you can take more risk with your investments.
The closer you get to retirement then you think "preservation of capital".

One thing I would recommend though is being consistent with your retirement savings.
Always contribute to your IRA and 401K. Increase the allocations as you get raises until you max out each year.
Never touch the retirement accounts..not even to "borrow".

That's what I did my working career and I got to retire early.

Returns on investments are going to vary each and every year.
The more riskier the investment the greater the return (or loss).
You have to know your tolerance level so you won't panic in a downturn and sell at a loss.
Thank you. My 401k has date based funds, like "retirement 2050" is my fund, and I think 60% is going in there. And then I have some small cap, large cap, and some bonds.

When you say "retire early" do you mean 55? That is my plan of when I want to retire.

I have my 401k set to "automatically" increase 1% up to 10% as I get raises, so that is good. At least hubby gets a match so his is technically more like 9% of his salary going in there, so he's probably safer than me.

We would never borrow from a 401k. the penalty + taxes are ridiculous.

Thanks.
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Old 06-08-2014, 09:55 AM
 
Location: Great State of Texas
86,093 posts, read 72,479,637 times
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Quote:
Originally Posted by catlovr8 View Post
Thank you. My 401k has date based funds, like "retirement 2050" is my fund, and I think 60% is going in there. And then I have some small cap, large cap, and some bonds.

When you say "retire early" do you mean 55? That is my plan of when I want to retire.

I have my 401k set to "automatically" increase 1% up to 10% as I get raises, so that is good. At least hubby gets a match so his is technically more like 9% of his salary going in there, so he's probably safer than me.

We would never borrow from a 401k. the penalty + taxes are ridiculous.

Thanks.
Yes but you also need to have the mindset that as you get closer to the date it may need changing.
Early retirement also means a reduced pension (if you have one) so that needs to be in the back of your mind as well.
So, while a goal, it should be a movable goal as you get closer to it.

But you are young enough not to have to worry about those items yet..just the long term big picture goal.
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Old 06-08-2014, 10:25 AM
 
Location: Maryland
282 posts, read 305,751 times
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I don't have exact numbers for you, but based on the ages you posted you are close.
The important thing, IMO, is to raise your total retirement savings to 10% over the next several years. Then later (45-50 years old?) get your total to equal the IRS maximums. 2013 was $17,500 for 401k type accounts and $5,500 for IRA.
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Old 06-08-2014, 11:08 AM
 
158 posts, read 214,335 times
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Quote:
Originally Posted by CSRSJim View Post
I don't have exact numbers for you, but based on the ages you posted you are close.
The important thing, IMO, is to raise your total retirement savings to 10% over the next several years. Then later (45-50 years old?) get your total to equal the IRS maximums. 2013 was $17,500 for 401k type accounts and $5,500 for IRA.
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).
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Old 06-08-2014, 11:23 AM
 
5,392 posts, read 6,530,997 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).
well she has a point that any law can be changed in any way and even whether grandfathering is allowed. And at her age, there are many who have fears for one reason or another. and less time left on the clock to repair the damage.

But at your age, my recommendation do the best you can with what you know now and that means putting 10% into retirement instruments every year and grow it as you can. Don't forget emergency savings for x amount of time in the event something happens. and of course pay off your debt. That is your world now.

You are just coming from different places in the life cycle. IMO
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Old 06-08-2014, 11:40 AM
 
71,492 posts, read 71,674,131 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).
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.
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Old 06-08-2014, 12:12 PM
 
158 posts, read 214,335 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.
I agree. I think it's best to do the best you can with the information you have at hand. so I am continuing with the 401k plan in hopes the American people will never let the government take money privately held for retirement.
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Old 06-08-2014, 12:35 PM
 
Location: Great State of Texas
86,093 posts, read 72,479,637 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).
They are not quite the conspiracy theories you think.

Congress has had retirement experts come and talk to them about the USG "managing" 401K accounts.
The DOL had a 3 day seminar on people vs the government managing their retirement accounts.
The new Consumer Protection Agency is studying the government "managing" people's retirement accounts.

Were you aware of these happenings going on in DC over the past 5 years ?

So far it's just "talk" and hasn't gone beyond that. There is also the common theme among them that any USG management will be optional, not mandatory.
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