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I am not sure why everyone keeps telling you to buy a house.
I do agree you should get rid of your student loan.
If a lump sum makes you uncomfortable, just pay more per month towards it...and pay it off by the end of a year or something.
Max out retirement. These are the years that can make a huge difference in the long run.
Everyone seems to suggest that I payoff the student loan ASAP. Well, I do plan to pay it off next month. The payments on this loan are only $77 a month, however.
Everyone seems to suggest that I payoff the student loan ASAP. Well, I do plan to pay it off next month. The payments on this loan are only $77 a month, however.
it's because of the interest rate you're paying, nothing to do with how much it costs you in payments per month.
Also, people are suggesting that my pre-tax contribution rate to my 401K of 8% is too high. But, I did it for the following reasons: (1) build a strong foundation while young, so that the money has more time for growth, (2) by the time I retire in the year 2051, Social Security will only payout 76% of the full benefit, (3) I can easily afford this contribution amount from each paycheck, and (4) I only recently started a 401K account and didn't have one for a few years. Effectively, 13.5% of my gross income is being contributed to my 401K because of full employer matching of 3% plus 2.5% of employer contributions (K-Vantage).
I think you are doing great! You will be surprised how quickly your savings really grow. Back almost exactly two years ago I posted about my wife and I (both 27 at the time, now 29). We both (combined) make less on average than you do, if I were to guess now our average income since graduating college is a combined $60k or so annually, maybe a little less. Back two years ago we had $50k in retirement, $23k in savings, and $38k in student loan debt.
At this point, just 2 years later, we are at $124k in retirement, $80k in savings, and $28k in student loan debt. A $140,000 increase in net worth in just two years, half of which is equated to investment gains, half to savings.
Personally, I like to hold on to the cash and pay the interest on the student loan debt right now. For us half is at around 2% and the other half is around 5%. Fairly low %'s. Inflation is eating away at it at this point.
At this point, just 2 years later, we are at $124k in retirement, $80k in savings, and $28k in student loan debt. A $140,000 increase in net worth in just two years, half of which is equated to investment gains, half to savings.
Also, people are suggesting that my pre-tax contribution rate to my 401K of 8% is too high. But, I did it for the following reasons: (1) build a strong foundation while young, so that the money has more time for growth, (2) by the time I retire in the year 2051, Social Security will only payout 76% of the full benefit, (3) I can easily afford this contribution amount from each paycheck, and (4) I only recently started a 401K account and didn't have one for a few years. Effectively, 13.5% of my gross income is being contributed to my 401K because of full employer matching of 3% plus 2.5% of employer contributions (K-Vantage).
the school of thought is...contribute enough to get your company match, and put the rest in an IRA or ROTH IRA because you'll have more investment options.
there's no such thing in my mind really as "saving too much for retirement". your 8% is good, but not great, for your age. i'm 29, and at 12% for both me and my wife. i'm happy with the choices within my plan, but i am considering changing to only contribute the minimum, and put the rest in IRAs for the increased flexibility.
I think you are doing great! You will be surprised how quickly your savings really grow. Back almost exactly two years ago I posted about my wife and I (both 27 at the time, now 29). We both (combined) make less on average than you do, if I were to guess now our average income since graduating college is a combined $60k or so annually, maybe a little less. Back two years ago we had $50k in retirement, $23k in savings, and $38k in student loan debt.
At this point, just 2 years later, we are at $124k in retirement, $80k in savings, and $28k in student loan debt. A $140,000 increase in net worth in just two years, half of which is equated to investment gains, half to savings.
Personally, I like to hold on to the cash and pay the interest on the student loan debt right now. For us half is at around 2% and the other half is around 5%. Fairly low %'s. Inflation is eating away at it at this point.
awesome stats there! i'd probably pay off the 5% loan faster myself. i'm making accelerated payments on my 3.5% student loan.
though, it's not crazy to hold off and keep the money.
i wish my retirement savings had the same increase as yours these past two years! how the heck did you gain $74,000 in 2 years?
awesome stats there! i'd probably pay off the 5% loan faster myself. i'm making accelerated payments on my 3.5% student loan.
though, it's not crazy to hold off and keep the money.
i wish my retirement savings had the same increase as yours these past two years! how the heck did you gain $74,000 in 2 years?
I went and fired up the website. It wasn't all gains, about half of that was additional money being put in either my myself or my employer. I went back and looked at the graphs:
401k
-----
April 2011
$73k balance
$49k contributions
April 2009
$18k balance
$22k contributions (net loss)
Roth IRA
-----
April 2011
$52k balance
$32k contributions
April 2009
$17.5k balance
$17k contributions
From what it looks like just $47.5k in actual in gains. The rest ($42k) was additional contributions.
Also, people are suggesting that my pre-tax contribution rate to my 401K of 8% is too high. But, I did it for the following reasons: (1) build a strong foundation while young, so that the money has more time for growth, (2) by the time I retire in the year 2051, Social Security will only payout 76% of the full benefit, (3) I can easily afford this contribution amount from each paycheck, and (4) I only recently started a 401K account and didn't have one for a few years. Effectively, 13.5% of my gross income is being contributed to my 401K because of full employer matching of 3% plus 2.5% of employer contributions (K-Vantage).
8% is not high. Most of what I've read suggest at least 15% to retirement. I've also came across something about having at least 1x your income in retirement savings by age 30.
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