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People at or approaching retirement age aren't saving as much as they/we should for retirement ... and that's not pie in the sky theory, it's a fact. There's nothing legitimate out there to dispute it. 401ks came into being because companies ended their defined pension plans. Those of us who worked had little or no option, but to fend for ourselves ... often with some help from our employers who deposited profit sharing/pension allowances yearly.
The employer match to 401k contributions is free money. It is rather incredible that some people apparently do not choose to contribute at least to the level of the employer match.
We started saving for retirement in the early 80s. The year my husband turned 40 (I was still in my 30s) he became very serious about retirement and started studying everything he could find because we had our own business and would never get a pension.
Back then there was a thing called Keogh plans, and you could put as much as you want into your tax-free retirement plan--it wasn't limited. One year we had a huge income, and my husband convinced me to put it all in the Keough. He was right---being tax-free it has accumulated tons of interest-free earnings, and really became our retirement anchor that we aggressively added to over the years.
We've also fortunately made some good investments, and have also always lived within our means and been pretty frugal but still had plenty of quality fun and lifestyle. By starting early, ( and with some luck) we were able to retire early. I give the credit to my husband for having the early "vision thing". I was clueless about planning for retirement.
The employer match to 401k contributions is free money. It is rather incredible that some people apparently do not choose to contribute at least to the level of the employer match.
There is no employer match, where I work. I wish there were. Instead of providing a company pension plan my employer contributes an amount plus profit sharing amount into each of our 401k's annually. If I contribute 8% or more of my salary to my 401k the company contributes an additional 2% as a reward. Although I contribute more than the 8% many of my co-workers find they cannot due that.
Have always has pension working after college and started 403B around then also. Not sure when exactly but I was invested in the Magellan fund during the Peter Lynch run. Have always known that a pension( if you were fortunate) was only one of the three retirement legs and you needed to factor in the other two for a solid foundation. Many collegues felt their pension was suppose to do it all and even complained that it wasn't enough but felt it was suppose to be.
The employer match to 401k contributions is free money. It is rather incredible that some people apparently do not choose to contribute at least to the level of the employer match.
Ya think????? It always blew me away how so many people "participate" in their 401K's by contributing $10 a week and then don't think twice about tapping it for cash to buy a car, remodel their home, etc.
I started contributing to a 401K in 1985 when i started my longest tenured job (22 years with that company). Their match was 100% up to 6% of your income. How in the world could I turn down that free money. Over the years, I built that up into well over $1M.
My wife's last employer started a 401K a number of years ago. We agreed that she would use it to save aggressively (we're both in our 50's so continued retirement saving was important to us), so she contributed $400 with every paycheck. After several years, she had built up $75,000. her employer match added at least $3,000 every year. Of course, many of the women she worked with who had contributed $10 per paycheck were busting through the $1,000 mark by this time. They didn't do more than that because their husband took care of retirement. Wow....
I didn't have a 401k available to me in my early years, but I did do what's now called a Traditional IRA. It was the early 90's, and the limit was $2000 (or was it $1500...?). I was in my mid 20's. The Roth IRA didn't come until years later.
When I finally did get a job with a 401k I maxed that AND maxed my Roth. I also added every month into a regular taxable acct.
I wish the market would hurry up and tank again, so I can accumulate more shares on the cheap and "feather the nest".
I don't think I ever had a job with a pension. I started with a 401k in the late '70's. I started saving before then. As a kid I made some money mowing the neighbors' lawns, etc. I even have some stock left from my earliest earnings and investments.
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