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Old 03-26-2015, 04:54 PM
 
8,858 posts, read 5,136,100 times
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Quote:
Originally Posted by snowtired14 View Post
My wife and I were way underfunded by the time I was fifty, I was unemployed, we had gone through all our savings and retirement money to stay afloat, and she was just starting a new job. But we got back on our feet, kept hitting 401K's hard and getting match from employers, got the kids to adulthood, paid off the house and now at 63 we're almost ready. By the time I'm 65 we'll be well funded to live comfortably for the next 30 years if we make it. So, even if you start late, it can be done, and BTW, we are not millionaires nor did we make outrageous money. Just have to make a plan and go for it.

Congrats on a job well done.
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Old 03-26-2015, 06:12 PM
 
Location: it depends
6,074 posts, read 5,335,268 times
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I've watched many people go through this. People end up way behind at 45 or 50, spending everything on kids, mortgage, college, etc. Then one day those expenses are all pretty much gone, and the last 10 or 15 years they save like crazy--30-50% of incomes. And retire in decent shape at normal age. This is far more common than always saving 10% of everything you ever make, starting with your first job.
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Old 03-26-2015, 06:42 PM
 
Location: Idaho
1,454 posts, read 1,155,436 times
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Quote:
Originally Posted by Emigrations View Post
As a spin off to the current thread about seniors and income inequality, when do you think one really needs to be "on-track," so to speak, in order to retire in the normal range, say between 60-67? Obviously the more you have the earlier, the better, but is there a point where someone who has zero saved will probably never get on track? If that age exists, is it 30? 40? If you're in your 50s and only have $50k or so, are you pretty much out of luck?

Assuming no windfalls, when do you think people can get really screwed from being behind the curve?
Here is a guideline for retirement saving

How Much You Should Have Saved in Your Retirement Account, by Age

So roughly at your age (~30?), you should have saved roughly 1x your annual salary. If you are not there, you will just have to save at a higher rate to catch up.

It is likely the suggested saving amounts are based on the assumptions of needing 80% replacement income in retirement years, withdrawing 4% of the saving per year and the standard life expectancy.

If one is in his/her 50's and only have 50K but say has managed to live on an income at poverty level of ~12K, 50K is ~4.2x the income which is right at the 4x income suggested by this guideline.

So if one is 'behind the curve', one can try to earn more, save more or try to live on less.
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By what age do you need to be financially "on-track" for retirement?-1007048622697640849.jpg  
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Old 03-27-2015, 08:31 AM
mlb
 
Location: North Monterey County
3,181 posts, read 2,856,933 times
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I just remember being in a panic in my mid-40's that we hadn't done enough..... and read somewhere that 20 years of saving was all we needed. However, at the time my spouse was in sales and his employment was iffy. Along came the recession and I had to make the choice that if we were going to make it - I would have to save for him.

So I have been saving 30% of my salary as if we were both employed saving %15 each.

Thank Dog I did that. We will be ready.
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Old 03-27-2015, 08:56 AM
 
Location: Columbia SC
8,972 posts, read 7,745,489 times
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My wife and I lived up to our income (as in spent it) until our early 40's when we decided to save/invest. We made good money and had no children so it was relatively easy for us to do such. We also made a very good profit on a home sale when we both retired at age 62.
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Old 03-27-2015, 09:13 AM
 
2,079 posts, read 2,604,631 times
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Quote:
Originally Posted by Emigrations View Post
As a spin off to the current thread about seniors and income inequality, when do you think one really needs to be "on-track," so to speak, in order to retire in the normal range, say between 60-67? Obviously the more you have the earlier, the better, but is there a point where someone who has zero saved will probably never get on track? If that age exists, is it 30? 40? If you're in your 50s and only have $50k or so, are you pretty much out of luck?

Assuming no windfalls, when do you think people can get really screwed from being behind the curve?
it depends on your annual spending. if you live within your means & minimize expenses then its easy to be on track, even if you start at 40. but then again, if you start at 40 then chances are you weren't living below your means to begin with.

first "real" job outta college is the best answer, whatever that age may be. 22-25. I started at the beginning of last year at age 24. people say that you should make paying down loans a priority instead of saving for retirement. however, I just did both. while I was in the hole by 20K I just did enough to get the match while throwing a bunch at student loans. once I paid off my 6.8% loan I just had the 3.4%. I jacked up my 401k contribution to 25% and maxed out the IRA. fast forward to this year, I am about the same 20K amount in the black now.

set up a short term emergency fund. you don't wanna be dipping into retirement accounts, otherwise you will put yourself behind the curve and then some

if you start at 45-50, you're probably screwed, but no one situation is the same. you could still eek out a decent retirement if you embrace the minimalist lifestyle and move to a foreign country with a dirt cheap cost of living.
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Old 03-27-2015, 09:16 AM
 
Location: NYC
2,910 posts, read 1,589,162 times
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Quote:
Originally Posted by marcopolo View Post
I've watched many people go through this. People end up way behind at 45 or 50, spending everything on kids, mortgage, college, etc. Then one day those expenses are all pretty much gone, and the last 10 or 15 years they save like crazy--30-50% of incomes. And retire in decent shape at normal age.
This.

I had to start over from $0 in my early 40s & by living simply* & squirreling away 20-30% annually in investments/IRA/401K (I have no kids) I was able to retire in about 20 years. I had a decent, but not exceptional salary, probably middle management average. The amount I retired with was a bit less than ideal but they offered a package & I realized I had been working since the age of 13 & I was tired of it. If I had stuck it out 2-3 more years I would be financially ideal.

* Living simply is not buying a lot of unnecessary crapola to fill up a lot of unused rooms or shopping for entertainment ("Lets go to the mall!"). I was able to buy a condo in a now up & coming area & take international trips most years (using deep sale tickets when they happened & then using frequent flier points gotten by using & churning FF afilliated credit cards) by staying in extremely modest (cheap!) hotels.... yes cheap hotels in the likes of Paris, Rome, Bangkok, Bali, Hong Kong, Ireland most years.

I don't own a car - take public transport, own a condo not a house - chosen with an eye to available public transport & gentrification possibilities. Don't spend much on clothes - buy on sale only, usually the week after christmas when the sales hit I buy for the next year. Don't constantly "update" my home with new furniture, etc... just a small thing every few years works. I've paid off the 15 year mortgage 3 years early before quitting.

I know with kids it would be harder.
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Old 03-27-2015, 09:27 AM
 
Location: Tennessee
23,581 posts, read 17,574,904 times
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Quote:
Originally Posted by BellaDL View Post
Here is a guideline for retirement saving

How Much You Should Have Saved in Your Retirement Account, by Age

So roughly at your age (~30?), you should have saved roughly 1x your annual salary. If you are not there, you will just have to save at a higher rate to catch up.

It is likely the suggested saving amounts are based on the assumptions of needing 80% replacement income in retirement years, withdrawing 4% of the saving per year and the standard life expectancy.

If one is in his/her 50's and only have 50K but say has managed to live on an income at poverty level of ~12K, 50K is ~4.2x the income which is right at the 4x income suggested by this guideline.

So if one is 'behind the curve', one can try to earn more, save more or try to live on less.
I currently make $58k, but was making just $24k on 1/1/2014. Most of the jobs I held before this one were temporary with no benefits. These days it's taking longer for young people to get quality jobs, if they can at all.

Quote:
I don't own a car - take public transport, own a condo not a house - chosen with an eye to available public transport & gentrification possibilities. Don't spend much on clothes - buy on sale only, usually the week after christmas when the sales hit I buy for the next year. Don't constantly "update" my home with new furniture, etc... just a small thing every few years works. I've paid off the 15 year mortgage 3 years early before quitting.
Also, owning a car is a necessity in most of the country. You can't count on not having a car.
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Old 03-27-2015, 09:44 AM
 
8,858 posts, read 5,136,100 times
Reputation: 10129
Quote:
Originally Posted by BellaDL View Post
Here is a guideline for retirement saving

How Much You Should Have Saved in Your Retirement Account, by Age

So roughly at your age (~30?), you should have saved roughly 1x your annual salary. If you are not there, you will just have to save at a higher rate to catch up.

It is likely the suggested saving amounts are based on the assumptions of needing 80% replacement income in retirement years, withdrawing 4% of the saving per year and the standard life expectancy.

If one is in his/her 50's and only have 50K but say has managed to live on an income at poverty level of ~12K, 50K is ~4.2x the income which is right at the 4x income suggested by this guideline.

So if one is 'behind the curve', one can try to earn more, save more or try to live on less.
I have never understood this guideline. Eight times final salary saved is only 32% salary replacement, assuming a 4% withdrawal rate. If you want to replace 80%, you have 48% to go. Where is that coming from? SS benefits won't get you there.
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Old 03-27-2015, 09:45 AM
 
8,858 posts, read 5,136,100 times
Reputation: 10129
Quote:
Originally Posted by Emigrations View Post
I currently make $58k, but was making just $24k on 1/1/2014. Most of the jobs I held before this one were temporary with no benefits. These days it's taking longer for young people to get quality jobs, if they can at all.
Congrats on landing your current job. What a difference!
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