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The funny thing about retirement planning is unknown life events. You could get divorced, remarried, have more kids, lose your job, get hit by a bus, get cancer, so forth.
And if you play your cards right and retire in your 50's then what are you going to do? Twiddle your thumbs watching Judge shows, watch grand kids? volunteer at a soup kitchen? travel the world for 30 years?
Every time I go to the ATM I see advertisements of youngish baby boomers on the beach enjoying their retirement. Because that is what people do every day if they don't work I suppose. Meanwhile, all the retired people I know spend their days at doctor appointments, watching grandkids, and watching judge shows. Remember, retirement is a big business and banks want your business which is why millennials are being bombarded with retirement advertising.
My advice: save some, spend some, live your life. Don't obsess over unknowns.
The funny thing about retirement planning is unknown life events. You could get divorced, remarried, have more kids, lose your job, get hit by a bus, get cancer, so forth.
Oh yes I'm aware some things will change. Divorce or remarried is not a pleasant thought but possible. If I have more kids I can name you a doctor who will be facing a lawsuit. Losing a job is possible, as is cancer! ugh. Lost my mom to cancer in her early 50's, so I'm well aware of that grim possibility.
And if you play your cards right and retire in your 50's then what are you going to do? Twiddle your thumbs watching Judge shows, watch grand kids? volunteer at a soup kitchen? travel the world for 30 years?
I'm pretty sure I can figure out how to fill my time with hobbies that I would love to pursue, I'm not too worried about that one.
Every time I go to the ATM I see advertisements of youngish baby boomers on the beach enjoying their retirement. Because that is what people do every day if they don't work I suppose. Meanwhile, all the retired people I know spend their days at doctor appointments, watching grandkids, and watching judge shows. Remember, retirement is a big business and banks want your business which is why millennials are being bombarded with retirement advertising.
Most of the retired people I know have filled their time with activities they enjoy, it doesn't look so grim to me.
My advice: save some, spend some, live your life. Don't obsess over unknowns.
I try not to obsess over unknowns, but I'd like to have a plan for the future if I'm lucky enough to make it there relatively unscathed.
The funny thing about retirement planning is unknown life events. You could get divorced, remarried, have more kids, lose your job, get hit by a bus, get cancer, so forth.
And if you play your cards right and retire in your 50's then what are you going to do? Twiddle your thumbs watching Judge shows, watch grand kids? volunteer at a soup kitchen? travel the world for 30 years
Having money gives a person options... keep on working, retire, work part time, volunteer, etc.
The flip side is not so attractive... planing to work until 70 but then get hit with job loss or health problems ten or twenty years before that age.
I think 15% savings is a pretty good target for most people that don't have a pension coming. It leaves a little breathing room for hiccups and poor markets, and leaves open the possibility to knock off a few years early if a person so desires.
You need to do max Roth contributions in addition to 401K.
In addition, also open a spousal Roth for your wife. She then needs to develop habit of maximizing her 401k and Roth once she starts working again.
You're in a good spot having 1 year of income currently saved in retirement accounts at 34. That said, with a 10% savings rate (even up to 15%) is probably going to get you retired around 65. Retiring in your 50s will likely require savings rates in excess of 20% unless you can drop your expenses in retirement and live off less income.
Most of the debt on the card is at a promotional 0% rate from being transferred from a another card when I decided to get serious about getting rid of this obligation. The other portion has a fairly reasonable rate as far as credit cards go.
Most of my "side money" is generated through credit card churning and using/selling miles and points. Once interest rates increase manipulating 0% offers might become profitable again, but most of that disappeared with ZIRP.
You're in a good spot having 1 year of income currently saved in retirement accounts at 34. That said, with a 10% savings rate (even up to 15%) is probably going to get you retired around 65. Retiring in your 50s will likely require savings rates in excess of 20% unless you can drop your expenses in retirement and live off less income.
How soon do you think I need to ratchet up to 20% to make my 50s realistic? As my pay increases I should be able to get there by age 40. My wife going back to work in a few years will also help. And yes, my expenses should be lower in retirement than they are now
I will no longer have a mortgage, and my wife's student loans will be gone.
I'm looking for opinions as to if I'm on track to retire when I would like to. I'm 34 years old and currently have about 1 year's worth of my current salary in my retirement accounts. I'm by no means rich but I earn what I consider to be a good salary. Right now I contribute 10% of my salary (between me and employer) to my 401(k). If I continued earning my current salary my Social Security benefits at full retirement age would be about $2,400/month in today's dollars. I obviously assume my earnings will increase over time so that amount will probably rise. I also plan on raising my 401(k) contribution by 1% each year when I get my annual pay increase.
My goal is to retire in my late 50's when I can begin drawing from a company sponsored 401(k) without penalty (assuming laws don't change). I would wait on drawing from Social Security until reaching full retirement age. In your opinion is this feasible with where I am at today? I look at some calculators and think I'm in okay shape and others tell me I'm not.
I could afford to contribute more to my 401(k) today, but there would be some sacrifices, as I don't live in a vacuum. I don't live extravagantly by any means, and I am the sole earner in my house until our youngest of two children starts school. We do enjoy a couple of simple family vacations per year. I would hate to cut one of these out as looking back on my own childhood I treasure memories of our family camping trips. It's always a balancing act between the present and future isn't it?
I fully realize a lot can and will change for better and worse between point A and B. I just know that my grandparents retired in their 50s, and more than two decades later they are still going strong and have enjoyed a very fulfilling life of travel, family, friends, and hobbies since leaving work. I would really appreciate any thoughts you may have.
EDITED to add: Our house currently has 19 years left on the mortgage, so I'll have that paid off by age 53 at the latest.
No. You are headed in the wrong direction. You don't need savings, you need income.
Stop talking about how many millions you will need and start talking about creating an income you cannot outlive.
I could afford to contribute more to my 401(k) today, but there would be some sacrifices, as I don't live in a vacuum. I don't live extravagantly by any means, and I am the sole earner in my house until our youngest of two children starts school. We do enjoy a couple of simple family vacations per year. I would hate to cut one of these out as looking back on my own childhood I treasure memories of our family camping trips. It's always a balancing act between the present and future isn't it?
How we looked at it.....we didn't put all our "bets", ie our money, into saving for retirement while working to starve ourselves for "today". And "starve" is relative of course. For us, we made sure we had enough to live for "today" to enjoy the things we wanted/that were important to us while working as tomorrow is never guaranteed. But at the same time, we pushed hard to put a way a bunch to retire early to increase the odds we'd be able to enjoy the money in good health at a young age as the later one retires, the odds increase of health issues that might crimp being able to use and enjoy all the money you put away for retirement. So I think one has to always keep that factor in mind too.
So that was our thought process/it worked very well for us. We found a balance that was right for us and that meant putting 50% of our income away in deferred plans/IRA's/private accounts to get out of the game very early but that's us. No one else can define that except you of course. In the end, your point of "there would be some sacrifices" in the now to retire earlier is certainly the reality of it all. The old unlimited wants/limited resources. Are those sacrifices worth it to you, deprive yourself of some things in the now for later/increase the chance of retiring earlier? And you mention you have young kids. Many people have found a way to retire very early with kids making modest incomes but as you say, I would guess there has to be sacrifices there too and you may not be able to do things like pay for their college if that's what you intended(if they even end up going), take some more expensive trips with them if that's what you planned/envisioned, etc.
You'll find your balance on what works for you and it might take some sitting down and mapping out some similiar things I mentioned here in your life what you want to give up now/what you don't want to give up now for later. Hopefully a few things I've mentioned might be able to help you think of things in a new light. Best of luck to you!
Sweet Jeebus. If this guy isn't on a good track then I don't want to know what track most of America is on.
OP, I think you're doing pretty well. I would try and increase your savings by 1.5% every year going forward for the next 10-12 years or so. When the wife goes back to work this will become easier. I try to bank the vast majority of my wife's paycheck while also saving at least 10% of mine.
I don't know if your 50s is possible at this point, but maybe. I'd say more like 62. However, if you increase your savings/contributions steadily over the next decade, you may get closer to hitting your late 50s target.
Are you never planning on moving up from your current house?
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