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Monthly outflows are around $2,600 out of which $1,600 are my fixed expenses and $1,000 are discretionary/entertainment expenses. Additionally I have a $6,000/yr travel/vacation budget so that's amortized to $500/mo. which brings monthly outflows to $3,100. I am a travel buff.
My take home is around $7,000/mo. so I save about $3,900/mo. (savings rate is 55.7%).
I have zero debt and no liabilities (single, no kids)
My credit score is 820, I have never paid a single bill late in my life!
Car is paid off a long time ago but thinking of buying a new one in a yr.
Savings are $165,000 cash
401k is $27,000 (I don't have a 401k in my company so haven't been contributing for the last 5 years)
I do not own a home
My opinion is that I am WAY behind the curve for my age, I feel I spend way too much on eating out and entertainment (upto $500/mo. sometimes). Some of my friends think this is actually a very low amount for my income and the fact that I am single with no liabilities!
My objectives are to retire at 60, I figure I still have 20+ years for that so a while to go but want to try to set the correct course now. I ran some calculators online and it said I would need $2 million to retire comfortably which I find a STAGGERING and unachievable amount!
The part that scares me is inflation eating away my savings and not having enough for retirement despite my best efforts since the job market has becoming so shaky and the market so unstable.
First off is the question, how am I doing financially for my age group compared to the rest of the nation?
Severely slacking in retirement savings. Did you only recently start saving for retirement? I'm early 20's and have almost that much in my 401(k). You'd probably need more than $2M to maintain your current lifestyle.
Severely slacking in retirement savings. Did you only recently start saving for retirement?
I was making only $59k until 2005 working for a tiny company that could not afford to pay me market wages but I stuck on for various reasons, during this time I was not able to save much since I spent a lot of money on cars and other hobbies (the typical financial errors of youth!!)
after that my income started increasing with a series of quick job switches - to 80K at first in 2006, 100k in 2007 and $125k only since 2009. So that accounts to why I have so little saved up.
Ideally you would have started investing in the stock market years ago... its not too late. You can start by putting at least half your savings in the market and leaving it there. In addition to the expected annual return from stocks increasing in value, you also get the benefit of dividends. There are many solid stocks that pay 5% dividends which you can reinvest.
Ideally you would have started investing in the stock market years ago... its not too late. You can start by putting at least half your savings in the market and leaving it there. In addition to the expected annual return from stocks increasing in value, you also get the benefit of dividends. There are many solid stocks that pay 5% dividends which you can reinvest.
Well, I know nothing of the stock market which is what scares me... I know several people who's ENTIRE savings have been wiped clean investing in stocks! And these were supposedly people who knew what they were doing - at least according to them!
Based on your $7,000/month take home versus your low expenses, I would have assumed your savings/investments to be $500,000-$600,000. I am in the same age group (37) and have substantially more in savings/investments (plus home equity), but I have a wife who is also a high earner. On the flip side we have two kids. What are your plans, buying a house?
Check back in 2 years and I bet you can more than double that number.
Well, I know nothing of the stock market which is what scares me... I know several people who's ENTIRE savings have been wiped clean investing in stocks! And these were supposedly people who knew what they were doing - at least according to them!
Get some advice on making a well-diversified portfolio. Diversify, not just among stocks but also asset classes. Your portfolio needs a variety of asset classes, not just stocks, commodities, bonds, real estate, etc. by themselves.
Monthly outflows are around $2,600 out of which $1,600 are my fixed expenses and $1,000 are discretionary/entertainment expenses. Additionally I have a $6,000/yr travel/vacation budget so that's amortized to $500/mo. which brings monthly outflows to $3,100. I am a travel buff.
My take home is around $7,000/mo. so I save about $3,900/mo. (savings rate is 55.7%).
I have zero debt and no liabilities (single, no kids)
My credit score is 820, I have never paid a single bill late in my life!
Car is paid off a long time ago but thinking of buying a new one in a yr.
Savings are $165,000 cash
401k is $27,000 (I don't have a 401k in my company so haven't been contributing for the last 5 years)
I do not own a home
My opinion is that I am WAY behind the curve for my age, I feel I spend way too much on eating out and entertainment (upto $500/mo. sometimes). Some of my friends think this is actually a very low amount for my income and the fact that I am single with no liabilities!
My objectives are to retire at 60, I figure I still have 20+ years for that so a while to go but want to try to set the correct course now. I ran some calculators online and it said I would need $2 million to retire comfortably which I find a STAGGERING and unachievable amount!
The part that scares me is inflation eating away my savings and not having enough for retirement despite my best efforts since the job market has becoming so shaky and the market so unstable.
First off is the question, how am I doing financially for my age group compared to the rest of the nation?
You're doing better than most of the rest of the country, but that's not saying much.
I share your concerns about inflation. The best thing you can do is continue to save as much as possible.
I personally think you're doing reasonably well. You're approaching your peak earning years and have a decent pile of cash. You might consider buying a residence, since you will eventually be done paying it off, and it can be a good hedge against inflation.
What you should really do is talk to a retirement planner. Your spending is pretty modest, and if you project that out to your retirement years and add in some inflation scenarios, you can get a decent idea of how much you need to be saving every year to make it happen.
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