Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Do you think it's okay that 100% of my 401k is vested in a single target date fund? I used to have a Roth IRA but closed it because I thought it was a bad idea. By having all of my retirement money in tax deferred accounts (i.e. 401k), it creates a significantly larger foundation of which growth can occur over the long term. It also allows for more short term cash now, while I'm in my younger years. I mean, life can't be ALL about waiting until retirement. Here is a summary of my year to date 401k performance and contributions, etc. Is it doing okay? God, I hope I'm not screwed.
Yes, Target Date funds, by definition, are meant to be all-in-one funds. You're doing fine. Your main problem isn't the Target Date fund, it's that you're impatient.
It's up to you whether or not it's all about retirement. I don't think $879 a month is all that much to save, and I live in a high cost area and make less than you. You might be able to retire before age 67 on that amount, around 60, if you continue to increase what you save in line with the inflation rate...but a lot can go wrong in 30 years to throw you off track (unemployment, etc.). So it's a good amount to save for someone who wants to retire at the traditional retirement age or maybe a little sooner if things go well.
I also think it was a mistake to close the Roth IRA. It's good to have some money that will be tax free at retirement. I don't make out my workplace plan, but I do have a small amount in a Roth (~9% of my retirement funds).
Here is a chart that shows the relationship between savings rate and years to retirement:
Does anyone know if Social Security payments have Social Security or Medicare taxes withheld from them?
All retirement income is excluded from SS and Medicare taxes since you already paid those taxes on income while you were working. In a sense it would be 'double-taxing'. Only retirement income that is taxed (federal) is a traditional IRA.
Does anyone know if Social Security payments have Social Security or Medicare taxes withheld from them?
They don't although some states tax SS benefits. Federal gov't taxes SS benefits, up to 85% if your income exceeds certain thresholds.
If you spend 39K now - 21K = 18K per year or 1500 per month
I would just shoot for saving enough money to purchase a house and cover the basic expenses
Figure roughly 225K for a house and 500$ in upkeep + taxes for a total of 24K per year.
If it were me and this was my budget I would figure you need about 150K to cover the expenses in excess the money you receive from your part time job (~1200-1400 per month). This is roughly 400K total
If your parents are millionaires then frankly you don't need to even worry about retirement. You should be focused on funding your near term expenses and getting close enough to quit your day job.
Does anyone know if Social Security payments have Social Security or Medicare taxes withheld from them?
If you receive SS benefits and continue to work and end up earning more than a certain amount p.a. your SS benefits are included as taxable income. If you have no other income or it falls below the mandated level your benefits are not taxable and in fact you are not required to file income tax returns. Medicare premium is deducted from your SS benefits before you see them - $100+/month depending on the plan.
All retirement income is excluded from SS and Medicare taxes since you already paid those taxes on income while you were working. In a sense it would be 'double-taxing'. Only retirement income that is taxed (federal) is a traditional IRA.
All retirement income is excluded from SS and Medicare taxes since you already paid those taxes on income while you were working. In a sense it would be 'double-taxing'. Only retirement income that is taxed (federal) is a traditional IRA.
That is incorrect. I receive a pension from my former employer and I can assure you that it is taxed.
I'm a little surprised that someone your age thought a Roth to be a bad idea - but then I never expect to get out of the tax bracket I've always been in, so tax deferred accounts make no sense for my circumstances.
I've even considered quitting my job and re-applying so I could get the money out of their retirement plan and into the Roth!
That is incorrect. I receive a pension from my former employer and I can assure you that it is taxed.
No, you probably pay federal and/or state INCOME TAXES on your pension (depending upon your un-earned income level and especially if your pension contributions were pre-tax, as most are). I can guarantee if you look at your 1099R you will not have witholdings for SS and medicare, as I originally stated.
No, you probably pay federal and/or state INCOME TAXES on your pension (depending upon your un-earned income level and especially if your pension contributions were pre-tax, as most are). I can guarantee if you look at your 1099R you will not have witholdings for SS and medicare, as I originally stated.
Yes, you are correct. I misread your original post.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
