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Old 12-10-2016, 07:06 PM
 
Location: Central Massachusetts
4,800 posts, read 4,843,254 times
Reputation: 6377

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Quote:
Originally Posted by Perryinva View Post
Odd that I saw no one figure in the normal way (but I may have missed it, there was a LOT of quoting going on) that is often recommended and the one I followed, where one saves in a 401k a percentage, not an amount. That percent will start low, usually just enough to get the company match or a bit more, and then increase slowly each year, typically a third of whatever your raise is. Well, to be fair, other posters did say to save what you can, tonget the company match and go from there, but didn't take it much farther.

At now 58, I save over $1700 a month in just my 401k, and over $35k annually in just retirement savings. And I miss not one cent of it, because I started at a much lower number as ampercent of my income, and lived on the remainder. I have always lived below my income by essentially living as if make 20% less than I do. In over 30 years of 401k I have averaged better than 17%/yr which has included the 3% company match, and should be at about $1M when I retire at 62,mwith a paid off home worth over $450k. That savings will be used as income (in addition to my pension) to replace the equivalent SS estimated amount I would get at 69 (inflation adjusted) while I delay filing until then, and as Roth conversions to hopefully take advantage of my lower tax status. Without a house payment or rent. My income needs drop an i stant &1600/mo. When SS kicks in at 69-70, I stop withdrawing that amount, and realize the same income with no need for savings. Then my (now lowered) RMDs kick in, at 70.5, which shouldn't be too much, maybe $20-25k/yr, if I successfully rolled most in to my Roth, which would be invested in low tax dividend paying equities..That's the plan, anyway.
Great post and can be a great example to OP. In my work I kept the same percentage. If I got a pay raise (not often and not much usually) that percent stayed the same but that meant that my input to the 401k went up by the same percentage as my pay increases. I had friends who put a fixed amount in the form to withdraw for deposit instead of using a percentage. When I explained that they should do it because of the increase to their funds they and changed.
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Old 12-10-2016, 11:52 PM
 
Location: Wildside of Oahu
1,412 posts, read 2,782,163 times
Reputation: 2433
I think its important to note that many people don't make 50k-65k per year. The Op could make 32K a year and have 3 kids and a mortgage. He said he doesn't have 560 a month to save.

There's been plenty of research into why people dont take adavntage of the 401K plus match and many conclude that younger folks get overwhelmed with the huge numbers that the mutual funds throw out. You need xxxxx or else! Or else what? You'll be poor in retirement just like you're poor today.

Maybe a better move would to try saving 3% to get the match if offered. If that doesnt hurt to badly, go to 4% ect. It took me into my 50's before I could sock away 15%.

My feeling that many of the posters are doing the humble/brag thing.
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Old 12-11-2016, 03:44 AM
 
Location: Mount Airy, Maryland
10,459 posts, read 5,920,270 times
Reputation: 16151
Quote:
Originally Posted by Joliefille View Post
I think its important to note that many people don't make 50k-65k per year. The Op could make 32K a year and have 3 kids and a mortgage. He said he doesn't have 560 a month to save.

There's been plenty of research into why people dont take adavntage of the 401K plus match and many conclude that younger folks get overwhelmed with the huge numbers that the mutual funds throw out. You need xxxxx or else! Or else what? You'll be poor in retirement just like you're poor today.

Maybe a better move would to try saving 3% to get the match if offered. If that doesnt hurt to badly, go to 4% ect. It took me into my 50's before I could sock away 15%.

My feeling that many of the posters are doing the humble/brag thing.
Totally agree. Save what you can and pay off your mortgage. It's all you can do, pay no attention to those saving $1,700 a month plus 35 grand.
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Old 12-11-2016, 06:14 AM
 
Location: RVA
2,164 posts, read 1,264,598 times
Reputation: 4451
It wasn't humble brag at all (which lately seems to be the catch phrase du jour), it was plain old factual bragging. I am very proud of my financial accomplishments, which occured despite 2 costly divorces. I worked for my money, in all kinds of weather and dangerous conditions and have put in many thousands of hours of overtime. I did what it took to make it happen. The point of my post was that perseverance and time, with living below your means, sets the stage for a retirement that can allow an effortless or early retirement. No one really knows what their future income will be.

I started as an engineer making $21k/yr in 1980. Good money back then. In my naïveté, I remember figuring that once I made $50k, I could retire a few years after that. Back then a 5-7% raise was normal. So I figured I would be rich in my 40's. If the OP is talking generating $1000/mo, 22 years from now, then he is young and clueless. $1000/mo in 22 years will not be jack. But he is way ahead of where I was when I was in my 20's, because at least he/she is thinking about income generation in retirement. I was in my 40s before that concept occured to me. I contributed a whopping $100/month to my 401k during that first job, and never missed the $70 or so, that was missing.

I never had a goal, but even way before the internet, I knew that time and compounding were powerful tools, and my best friends father, also an engineer, was much wiser than my parents. He was my "retirement C-D" back then, though we only spoke in vague terms of the future. The 401k was new back then and I recall thinking that the company match was some kind of gimmick, too good to be true. He told me how really easy and valuable tax defered savings was. You had to work for 2 years to get it, and I left before that, so I only rolled my contributions and earnings in to my next job, which had no match at first. After a few years, I rolled that to the next company, which had a pension and a 3% match on 6%.

I gave half of everything I had, away, twice, in divorces, but I still kept at it. I never dreamed I would be making what I am today, which is well above my inflation adjusted starting salary in 1980, despite doing essentially the same thing, only as a subject matter expert in demand now. A lucky choice of a career in retrospect, compared to many I could have made. But I also know many more of of my college friends are multi-millionaires, many already retired. None stayed engineers to make that kind of success happen. And predictably, some were less successful financially than me. Each finds their place in life, and if they are smart and lucky they can find a career that they enjoy, AND makes good, ethically positive income, so that getting out of work ASAP is not the overriding objective in their life. FWIW, I am still great friends with that same best friend. He was also an engineer, though a year younger. Never divorced, he retired early this year, somewhat wealthier than I am, though his wife still works at the job she loves for a few more years. He had a dream job (IMHO) but rose in to management for more money. The job turned in to a nightmare, from a dream, over time, and he couldn't wait to leave. Different path, but similar results.

Most people do what they do because of momentum and circumstance. If I didn't like my job, I found another and moved practically cross country twice to find one that sounded better. And eventually it did happen. And with essentially zero effort, I find myself saving way more per year than I made for at least the first 7-8 years gross, in my career. It matters not what the amounts are, what matters is the effortless ability to accumulate by truly embracing living at a level below your means so that when you get to a point later in life, you are used to a lower income standard of living. If your final years income is $50k today, yet you did the same thing as I, (and maybe skip the divorces, highly recommended) you would be used to living on $40k gross, not as easy of course. But retirement income would have taken care of itself.

My parents never considered income in retirement at all. Their "plan" was pay off the house, collect SS at 62, plus withdraw what they needed from savings to make ends meet and hope they didn't run out, because when you're old, how much money can you need? My parents divorced in their mid 60s, mostly because of money (my mother became a gambling addict), and she was dead at 69. Had she lived, in 3 or so years, she would have been dead broke, with only $700/mo SS check.

Last edited by Perryinva; 12-11-2016 at 06:41 AM..
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Old 12-11-2016, 06:38 AM
 
Location: Central Massachusetts
4,800 posts, read 4,843,254 times
Reputation: 6377
Perry nice story. Thanks for sharing. It was sad and yet happy and inspirational. I am sure that a lot of us had similar thoughts when you were young. I know I did. I didn't make the same income you did but I feel I essentially found that path as well.
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Old 12-11-2016, 06:42 AM
 
Location: Mount Airy, Maryland
10,459 posts, read 5,920,270 times
Reputation: 16151
Yes we are happy for you Perry. But I guess the thought is in a thread started by a poster who is unable to save $560/month I'm not sure what the purpose of posting that you are saving over $35,000/year other than to make yourself feel good, possibly at the OP's expense.
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Old 12-11-2016, 07:06 AM
 
Location: RVA
2,164 posts, read 1,264,598 times
Reputation: 4451
Really? This has been beaten to death. Everyone makes different incomes. Don't persecute the successful and praise the less successful because it is the PC thing to do. Millions of people are WAY more successful than I, and plenty on C-D. I wasn't able to save as much as I do now, even 5 years ago. It just happens. Does a young person want to be depressed by "Good luck kid, you work your whole life, then you die. Get used to it" or a real honest possibility and example of what can happen with a little effort and planning. The whole point is that he doesn't need to save $560/mo to start. If he starts at $100, he will end up at much much more by simply fractionally increasing it each time he gets a raise. All the theoretical calculations in the world mean little if no one has ever actually done just that.

And I was not a zeolot about the increases, either, just consistent about saving. Sometimes life throws a curve and you take a setback. Like Commander Jason Nesmith said, "Never give up, never surrender!" (I just like quoting him more than Winston Churchill).
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Old 12-11-2016, 08:46 AM
Status: "Gaining Stability." (set 8 days ago)
 
5,684 posts, read 5,929,554 times
Reputation: 4432
I am essentially starting from scratch. I made some decisions that wiped me out financially. My primary goals are to save and pay off debt over the next two years. I do live significantly below my means. If I did not, I would not be able to save and pay off debt. Once that is done, I can purchase a condo and start putting money in a 401k.


My current rent is low but my payments will double when I buy a condo. It cannot be helped. That is the market and there is nothing I can do about it. I will be lucky if I can get a condo for that price.

Currently, I am responsible for paying all of my benefits. It sucks but what can I do. It is not easy to find a job today. I still feel somewhat lucky because I know people who are still unemployed and some who had to take a $20,000 pay cut. I have to make it work.

I made a projected budget for 2019 and I can only contribute $300 per month towards my 401k. The problem is health insurance. If my employer does not pay for it, I have to. I project it will cost about $500 per month. If my employer pays for it, I will most likely be able to contribute about $600 per month. I am hopeful but who knows. The jobs market really sucks for me.

I am hopeful about retirement. I went on the social security website to register. The dollar amount quoted is not too bad. My salary has been really low for the past three years. I anticipate it will go up dramatically because I am back to making what I did before my big mistake.

I also contacted my old employer about my pension. I feel so fortunate to have worked at such a good company that offered amazing benefits. It is the old fashion pension. I will get the money until I die which is so awesome. Employers don't offer that anymore. They stopped in 2007. I have my paperwork for that. Not bad.

I have decided to keep working once I reach retirement age. I really do not like being home. A part time job or a long term temp job will do just fine. Someone mentioned working in a library. That would be perfect.

The big variable is the 401k. I was hoping for $1000 per month but what can do?

I do not believe a million dollars is necessary for a comfortable retirement. My best friend is a senior. She is married and they doing okay. I do not believe they have a 401k. Many people are getting by with social security and working.

I did a projected budget and I think I will be okay. Paying off that mortgage will help immensely.

There are so many unknowns. All I can do is my best. This is my plan. Hopefully, I will catch a break. Life has been tough these past years but I am hopeful. Hence the optimism.
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Old 12-11-2016, 10:43 AM
 
Location: Wisconsin
26 posts, read 19,199 times
Reputation: 154
Goodlife36: "There are so many unknowns. All I can do is my best . . .

The next 22 years will be filled with many financial "game changers." Some will be personal; some will be a complete change of the financial & political arena as it is today.

Come what may, life below your means, save what you can, and find a happy balance between today & the future. Your posts indicate you will be successful in whatever choices you make. If a choice does go bad, pick yourself, dust off, & chalk it up to "not gona' make that mistake again." Good luck to you!
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Old 12-11-2016, 11:23 AM
 
Location: RVA
2,164 posts, read 1,264,598 times
Reputation: 4451
+1. Nice response regardless of age. No one needs a million to retire. If they did, only the top 5-10% and a lucky investors would ever be able to retire. Was never my point, and never my goal. Dual incomes the last 20+ years, some good investing luck, and good employment luck will make it possible, if it happens. If it doesn't, I don't really care. I will work until I want to and it is worth my time and energy to do so..I still think retiring at 62 is early, and it is strictly financial incentives and that I like my job that I continue to work. It is not a necessity at all. Sounds like the OP is not a young person, as I assumed from the 22year statement, but older and extrapolating to age 70 maybe? Some bad decisions and bad luck, and his current job availability have set him back. Nothing wrong at all with working if you enjoy your job. Still the same advice...which he has already decided to do..start with what you can, live below your means (and no unsecured debt, I forgot that major caveat too) and it will happen. No guarantees of course, but the odds increase greatly each year. Especially compared to the person that says "Whats the use? No one else I know is doing without today, for a better tomorrow, why should I?". Good luck!
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