My International fund is up over 23% YTD (almost triple the s&p 500). At this pace I'll be the lead gift on Jack Trice Stadiums new Press Box in no time!
Retirement thread
- Thread starter CloneGuy8
- Start date
That's us in a nutshell. We're both still working, but within 2-3 years of 65. We just went through a heckuva health scare, that, while ongoing, is MUCH less drastic than it could have been (the C word). We may have to adjust our travel somewhat due to what our bodies can handle, but it's still do-able. Just maybe not as much as we had originally hoped.
Net result is that quality health insurance is a much bigger issue for us now - and there's no telling what Medicare will be like in three years. It will be different than what you encountered, and will doubtless change many times before the current crop of 20-somethings start retiring.
i was mistaken. a few years back when i started working that wasn't an option. i see it has come on very recently.
the nice thing about it, from my limited understanding, is the roth 401k has higher contribution limits than the roth ira.
Higher contribution along with no income limitations like a roth IRA
that's exactly what we are doing as well - if it's good enough for Buffet, it's probably good for me. I'm only contributing enough to get all of my company match as I have pretty high-fee options. Used to do a few % more before I read much about investing. Once I did, I realized that pretty much all our funds are well over a 0.50% expense ratio, with many over 1.00% Tried to get them to add some low cost ones a few years ago, using Vanguard as an example (which my husband's company offers extensively) and pretty much got told I didn't know what I was talking about and actively managed is better. I suppose if my pay depended on people putting more into the fund that I managed, I'd say that too. So I cut down what I was putting in and diverted it to a Roth IRA with Vanguard instead. As a quick comparison, my husband's company's Target date funds through Vanguard are at 0.16%-0.18% expense ratios. My target date fund options start at 0.82% and go up over 1%.
Started putting money in at 22 and just turned 29. Would like to have husband and my combined salaries in retirement funds by 30. I did my part, hitting my salary earlier this year. Husband's income has gone up faster the past few years so even though he's increased his contribution, he has a bit to go yet. According to my spreadsheet which I think is a bit outdated now, we are at 14% contribution when including company matches. Have a nice template I got off of r/personalfinance if anyone wants it. Very helpful for figuring out how to best allocate our contributions among our company plans and IRAs.
tl:dr - don't just dump money into your 401k plan and assume that's good enough.
Taking your advice. Just set up bi weekly auto payments to ensure I max my contribution on my Roth. Thanks. Gotta love CF, I like this better than arguing politics
we are also at 14 but not including employer match because I'm not sure how to quantify employer pension contributions.
My target retirement fund as a .16% expense ratio. VFIFX 2050 fund.
My goal is to use farm rental income for living in retirement and letting my IRAs/401Ks continue to grow and compound. The extra 30 years of compound interest from age 65-95 when I pass (obvious assumption) would be incredible and I would be able to give an insane amount from the IRAs/401Ks to churches/charities while passing the farmland down to the next generations.
I have a ways to go but that's the goal.
I have a ways to go but that's the goal.
I believe you can transfer money out of a 401k to a personal IRA account whenever you want (i.e. yearly) if the options are really that bad. It doesn't count against any contribution limits
I use the low cost index funds as well. I'm not sure what my percentage is compared to the other funds, but I try to minimize the fees incurred. Yeah, the other funds may appear to gain more, but in the end after fees, is one really ahead??
According to this we are WAY behind even though we save quite a bit. There is so much conflicting information out there.
https://retirementplans.vanguard.com/VGApp/pe/pubeducation/calculators/RetirementIncomeCalc.jsf
https://retirementplans.vanguard.com/VGApp/pe/pubeducation/calculators/RetirementIncomeCalc.jsf
I think this is one of the most important keys to successful wealth building. You can only save and invest that part of your income that you don't spend, and maximizing the savings rate is more important than the rate of investment return.
A few ways from experience : don't buy as much house as you can afford. I remember sharing a house with 3 other guys when I was in my 20s living in Dallas. My portion of the rent was $125 / month. I saved a lot during this time. Not long afterward, I got married and my wife and I bought I house that was not much more than our combined annual income. Also, buying a little less expensive house can enable you to get a 15 year (or less) mortgage and build equity much faster.
Buy cars with cash. I did finance my first car purchase (Honda Accord) when graduating from ISU, and I believe one more later, but have not had a car loan in at least 25 years. This certainly helps the savings rate. Of course, this might mean not buying the expensive car that you would like to have - but the payoff comes in the wealth you build. I had a boss recently with whom I had a discussion about my potential retirement. I alluded to the scale of the wealth my wife and I had managed to build. He was quite surprised and said, "I don't think I'll ever get there". He drives a Ferrari (financed @ something like $5,000 / month) - and he probably will never get there!
I was fortunate to sell almost all of my tech company stock options in 2000, which I spent on real estate. That certainly helped my financial situation.
Max out your company contribution to your 401K - this is free money that you should almost never pass up.
Generally, live below your means, save aggressively (both into retirement accounts and into other investments), and over time, the magic of compounding will multiply your money.
Good luck!
Use 7% as a baseline for returns...you have to also consider there will be market corrections and crashes. The biggest financial advice I can give anyone is don't get divorced. If you do and your spouse decided to stay home with the kids get ready to say goodbye to half your retirement. Here was my situation...in 2007 I had 120k in my 401k...market crashed...lost 50k...down to 70k...built it back up to 120k over next 6 years then got divorced and half gone...back to 60k..
Now I make good money and I've been able to build it back up to over 170k and I'm 45. But those two events devasteed me financially. You can pretty much assume every 10 years or so you are gong to lose a ton of money in market. Unless.....You do what I did and stick most of your money in a target retirement account earning about 4-5% a year.
I got tired of seeing nice gains and every decade a crash. Not to say my funds can those money it's just that they won't lose more than 6-7% probably at most.
You need to have $500k by age 50 to be in a good spot come 65. I should have about $400k at 50. But Im also single and done with Alimony.
Now I make good money and I've been able to build it back up to over 170k and I'm 45. But those two events devasteed me financially. You can pretty much assume every 10 years or so you are gong to lose a ton of money in market. Unless.....You do what I did and stick most of your money in a target retirement account earning about 4-5% a year.
I got tired of seeing nice gains and every decade a crash. Not to say my funds can those money it's just that they won't lose more than 6-7% probably at most.
You need to have $500k by age 50 to be in a good spot come 65. I should have about $400k at 50. But Im also single and done with Alimony.
Actually, gathering information from people who have absolutely nothing to gain by giving said information is a really good thing to do. I'd be much more diligent when choosing an advisor -- and then look for a fee-based advisor/service. Or just do your own risk assessement and invest in index ETFs or mutual funds. See what Jack Bogle has to say on the subject.
That sounds like my parents. They didn't really deny themselves but never really traveled or did anything. My mother was poor in the depression and was obsessed with a fear of running out of money. They never did ran out of money. I was a little shocked when late in life my dad told my sister and i how much he had saved. Apparent my old man was way more of a savvy investor then I had ever imagined.
right now I'm only in two of the company fund options, both in the .5-0.6% range, I believe. But that is good to know and something I may have to look into as far as what fees/limits may be imposed if I do that.
If you are just starting out take 8% out from day one and you'll never miss it. Then add a % every time you get a raise and you'll be good to go. Later on in life you can worry about other investment vehicles. Put 100% in the s&p 500 and don't touch it for 15 years. Then when you have some tell money in that account you can worry about diversification.
It's very unusual for a company to allow you to transfer money out of your 401k into an IRA, while still employed, without consequences.