PBS Frontline : The Retirement Gamble, sorta Must See (1 Viewer)

[NutterButter]

Hopefully by retiring earlier and living on less per year, I'll qualify when they start means testing it.

 

[Dentist]

Social security more vital than ever

http://finance.yahoo.com/news/why-social-security-more-crucial-110011625.html?soc_src=mediacontentsharebuttons&soc_trk=ma

we shouldn't be expecting it for us anyway.

This is probably the biggest fallacy going right now except for Patriots fans believing Tom Brady is not guilty. If social security goes away, the country collapses. It will be there for as long as I live, 100% sure.

Exactly.. nothing more than doomsdayers.

They may change the rules some, lower COLA adjustments, make the retirement age later by a year or 3, but it's not going to vanish.. there's just no way.

Without social security there would be so many retirement age people that were literally bankrupt, out of a home, begging for food in the streets because forced savings were the only thing they had in life.

A social security only retirement is by no means glamorous, and probably qualifies as a craptirement... but it keeps people off the streets.

When I'm trying to factor what income I'm on in retirement, I make a conservative estimate of what SS will be and definitely factor it in.. I see no reason not to.

If you're trying to play a mental trick on yourself to save more by assuming it's going to vanish, that's fine if it helps you to save more, which is a great choice... but it's nothing more than that... a mental trick on yourself.

 

[James Daulton]

Social security more vital than ever

http://finance.yahoo.com/news/why-social-security-more-crucial-110011625.html?soc_src=mediacontentsharebuttons&soc_trk=ma

we shouldn't be expecting it for us anyway.

This is probably the biggest fallacy going right now except for Patriots fans believing Tom Brady is not guilty. If social security goes away, the country collapses. It will be there for as long as I live, 100% sure.

Maybe, but you're really old.

 

[FUBAR]

Social security more vital than ever

http://finance.yahoo.com/news/why-social-security-more-crucial-110011625.html?soc_src=mediacontentsharebuttons&soc_trk=ma

we shouldn't be expecting it for us anyway.

This is probably the biggest fallacy going right now except for Patriots fans believing Tom Brady is not guilty. If social security goes away, the country collapses. It will be there for as long as I live, 100% sure.

Exactly.. nothing more than doomsdayers.

They may change the rules some, lower COLA adjustments, make the retirement age later by a year or 3, but it's not going to vanish.. there's just no way.

Without social security there would be so many retirement age people that were literally bankrupt, out of a home, begging for food in the streets because forced savings were the only thing they had in life.

A social security only retirement is by no means glamorous, and probably qualifies as a craptirement... but it keeps people off the streets.

When I'm trying to factor what income I'm on in retirement, I make a conservative estimate of what SS will be and definitely factor it in.. I see no reason not to.

If you're trying to play a mental trick on yourself to save more by assuming it's going to vanish, that's fine if it helps you to save more, which is a great choice... but it's nothing more than that... a mental trick on yourself.

You can call it a mental trick, I'll call it not counting on something I have zero control over (unless you count voting as "control").You could argue we have no control over investment returns either, which is true. But I'd rather use 6% expected rate and no ss, when I'm forecasting. It doesn't make us save more but it gives a conservative estimate.

Besides, if I fully retire at 52, ss isn't in the picture for over a decade.

 

[Sand]

Hopefully by retiring earlier and living on less per year, I'll qualify when they start means testing it.

It'll be a wealth means test and you won't qualify. Savers always get screwed.

 

[Juxtatarot]

Hopefully by retiring earlier and living on less per year, I'll qualify when they start means testing it.

It'll be a wealth means test and you won't qualify. Savers always get screwed.

I'm skeptical they will ever means test. As you mention, it penalizes the saving behaviors we should be encouraging. There are so many other ways to fix the system.

 

[FUBAR]

Hopefully by retiring earlier and living on less per year, I'll qualify when they start means testing it.

It'll be a wealth means test and you won't qualify. Savers always get screwed.

I'm skeptical they will ever means test. As you mention, it penalizes the saving behaviors we should be encouraging. There are so many other ways to fix the system.

sure there are, and Trump's are fantastic.

but will they ever get enough support to actually pass?

 

[Juxtatarot]

Hopefully by retiring earlier and living on less per year, I'll qualify when they start means testing it.

It'll be a wealth means test and you won't qualify. Savers always get screwed.

I'm skeptical they will ever means test. As you mention, it penalizes the saving behaviors we should be encouraging. There are so many other ways to fix the system.

sure there are, and Trump's are fantastic.

but will they ever get enough support to actually pass?

Who knows? My guess is benefit payments will be supplemented by the general fund first.

 

[FUBAR]

Hopefully by retiring earlier and living on less per year, I'll qualify when they start means testing it.

It'll be a wealth means test and you won't qualify. Savers always get screwed.

I'm skeptical they will ever means test. As you mention, it penalizes the saving behaviors we should be encouraging. There are so many other ways to fix the system.

sure there are, and Trump's are fantastic.

but will they ever get enough support to actually pass?

Who knows? My guess is benefit payments will be supplemented by the general fund first.

probably. Let's go deeper in debt to pay old people who don't really need it!

 

[Meatwad Reloaded]

The government only takes SS out up to around 115K. I just read something that said if they simply agreed to tax all income for SS no matter how high, it will erase 60% of the problem.

I don't see a problem with doing this, especially considering most rich people are getting rich off the backs of everybody else anyways.

 

[Dentist]

Social security more vital than ever

http://finance.yahoo.com/news/why-social-security-more-crucial-110011625.html?soc_src=mediacontentsharebuttons&soc_trk=ma

we shouldn't be expecting it for us anyway.

This is probably the biggest fallacy going right now except for Patriots fans believing Tom Brady is not guilty. If social security goes away, the country collapses. It will be there for as long as I live, 100% sure.

Exactly.. nothing more than doomsdayers.

They may change the rules some, lower COLA adjustments, make the retirement age later by a year or 3, but it's not going to vanish.. there's just no way.

Without social security there would be so many retirement age people that were literally bankrupt, out of a home, begging for food in the streets because forced savings were the only thing they had in life.

A social security only retirement is by no means glamorous, and probably qualifies as a craptirement... but it keeps people off the streets.

When I'm trying to factor what income I'm on in retirement, I make a conservative estimate of what SS will be and definitely factor it in.. I see no reason not to.

If you're trying to play a mental trick on yourself to save more by assuming it's going to vanish, that's fine if it helps you to save more, which is a great choice... but it's nothing more than that... a mental trick on yourself.

You can call it a mental trick, I'll call it not counting on something I have zero control over (unless you count voting as "control").You could argue we have no control over investment returns either, which is true. But I'd rather use 6% expected rate and no ss, when I'm forecasting. It doesn't make us save more but it gives a conservative estimate.

Besides, if I fully retire at 52, ss isn't in the picture for over a decade.

that's fair.. i also want to retire before 62.5 so I'll have to be ready before then.

Damn, 52.. that's an aggressive goal that is awesome.. how are you going to do that?

That's 15 years away for me and I don't see how i'm going to make it unless the dow is like at 35K

 

[FUBAR]

Social security more vital than ever

http://finance.yahoo.com/news/why-social-security-more-crucial-110011625.html?soc_src=mediacontentsharebuttons&soc_trk=ma

we shouldn't be expecting it for us anyway.

This is probably the biggest fallacy going right now except for Patriots fans believing Tom Brady is not guilty. If social security goes away, the country collapses. It will be there for as long as I live, 100% sure.

Exactly.. nothing more than doomsdayers.

They may change the rules some, lower COLA adjustments, make the retirement age later by a year or 3, but it's not going to vanish.. there's just no way.

Without social security there would be so many retirement age people that were literally bankrupt, out of a home, begging for food in the streets because forced savings were the only thing they had in life.

A social security only retirement is by no means glamorous, and probably qualifies as a craptirement... but it keeps people off the streets.

When I'm trying to factor what income I'm on in retirement, I make a conservative estimate of what SS will be and definitely factor it in.. I see no reason not to.

If you're trying to play a mental trick on yourself to save more by assuming it's going to vanish, that's fine if it helps you to save more, which is a great choice... but it's nothing more than that... a mental trick on yourself.

You can call it a mental trick, I'll call it not counting on something I have zero control over (unless you count voting as "control").You could argue we have no control over investment returns either, which is true. But I'd rather use 6% expected rate and no ss, when I'm forecasting. It doesn't make us save more but it gives a conservative estimate.

Besides, if I fully retire at 52, ss isn't in the picture for over a decade.

that's fair.. i also want to retire before 62.5 so I'll have to be ready before then.

Damn, 52.. that's an aggressive goal that is awesome.. how are you going to do that?

That's 15 years away for me and I don't see how i'm going to make it unless the dow is like at 35K

I think we've discussed it briefly before, but I'll be eligble for "first retirement" at 42, which will give me a pension squarely in the middle class. I could work here until 52 (and do quite well), but that's unlikely. More likely I'll work full time for another decade in a different role before deciding the next step. I won't neccessarily completely retire at 52 but we should be in a position to make that choice. FWIW, at 52, our current youngest child should be headed to college - which gives us more flexibility.

 

[kutta]

The government only takes SS out up to around 115K. I just read something that said if they simply agreed to tax all income for SS no matter how high, it will erase 60% of the problem.

I don't see a problem with doing this, especially considering most rich people are getting rich off the backs of everybody else anyways.

I agree with your first paragraph that that's the road to solvation . I hope your second paragraph is shtick.

 

[NutterButter]

Hopefully by retiring earlier and living on less per year, I'll qualify when they start means testing it.

It'll be a wealth means test and you won't qualify. Savers always get screwed.

Still, if I'm planning to live on 50k/yr instead of 100k/yr at the time of collecting social security, I'll have a lot less wealth.

 

[wilked]

Having issues saving much these days... Been bothering me for a bit. New house + two daycares = cement blocks around our ankles for a bit.

The only thing I hang onto is that once those daycares are gone we can take that $30K annual and boost the savings quickly

 

[FUBAR]

Having issues saving much these days... Been bothering me for a bit. New house + two daycares = cement blocks around our ankles for a bit.

The only thing I hang onto is that once those daycares are gone we can take that $30K annual and boost the savings quickly

$15k annual for day care? Boston is expensive!

 

[Sand]

Hopefully by retiring earlier and living on less per year, I'll qualify when they start means testing it.

It'll be a wealth means test and you won't qualify. Savers always get screwed.

I'm skeptical they will ever means test. As you mention, it penalizes the saving behaviors we should be encouraging. There are so many other ways to fix the system.

Perhaps a simple 21% across the board cut?

 

[Dentist]

Having issues saving much these days... Been bothering me for a bit. New house + two daycares = cement blocks around our ankles for a bit.

The only thing I hang onto is that once those daycares are gone we can take that $30K annual and boost the savings quickly

That sucks.

People told me having children would be expensive.

My wife not working anymore was certainly a fairly large expense, as is insuring two new children.

But the offset of having two small children under 18 months has made me unable to do almost any of my hobbies, we certainly don't go out to eat, and haven't taken any vacation in nearly 2 years.

Frankly, I'm saving MORE money since having those children because I spent a crapload on travel and leisure pursuits.

The downside is that there are several moments during the week that I contemplate offing myself because all I do is work, come home, and then participate in child care, goto bed, rinse wash repeat... fortunately a child smiles or laughs or does something cute and I continue living.

 

[Tiger Fan]

Having issues saving much these days... Been bothering me for a bit. New house + two daycares = cement blocks around our ankles for a bit.

The only thing I hang onto is that once those daycares are gone we can take that $30K annual and boost the savings quickly

That sucks.

People told me having children would be expensive.

My wife not working anymore was certainly a fairly large expense, as is insuring two new children.

But the offset of having two small children under 18 months has made me unable to do almost any of my hobbies, we certainly don't go out to eat, and haven't taken any vacation in nearly 2 years.

Frankly, I'm saving MORE money since having those children because I spent a crapload on travel and leisure pursuits.

The downside is that there are several moments during the week that I contemplate offing myself because all I do is work, come home, and then participate in child care, goto bed, rinse wash repeat... fortunately a child smiles or laughs or does something cute and I continue living.

this is why gambling is my #1 hobby. Can do it from the comfort of my house, have a game on, etc.

 

[KCitons]

They can take social security away, as long as they take away welfare at the same time. No way will I give up something I paid into whole life, while someone else continues to get a check every month for doing nothing. Ever.

 

[pecorino]

Social security more vital than ever

http://finance.yahoo.com/news/why-social-security-more-crucial-110011625.html?soc_src=mediacontentsharebuttons&soc_trk=ma

we shouldn't be expecting it for us anyway.

This is probably the biggest fallacy going right now except for Patriots fans believing Tom Brady is not guilty. If social security goes away, the country collapses. It will be there for as long as I live, 100% sure.

Exactly.. nothing more than doomsdayers.

They may change the rules some, lower COLA adjustments, make the retirement age later by a year or 3, but it's not going to vanish.. there's just no way.

Without social security there would be so many retirement age people that were literally bankrupt, out of a home, begging for food in the streets because forced savings were the only thing they had in life.

A social security only retirement is by no means glamorous, and probably qualifies as a craptirement... but it keeps people off the streets.

When I'm trying to factor what income I'm on in retirement, I make a conservative estimate of what SS will be and definitely factor it in.. I see no reason not to.

If you're trying to play a mental trick on yourself to save more by assuming it's going to vanish, that's fine if it helps you to save more, which is a great choice... but it's nothing more than that... a mental trick on yourself.

You can call it a mental trick, I'll call it not counting on something I have zero control over (unless you count voting as "control").You could argue we have no control over investment returns either, which is true. But I'd rather use 6% expected rate and no ss, when I'm forecasting. It doesn't make us save more but it gives a conservative estimate.

Besides, if I fully retire at 52, ss isn't in the picture for over a decade.

that's fair.. i also want to retire before 62.5 so I'll have to be ready before then.

Damn, 52.. that's an aggressive goal that is awesome.. how are you going to do that?

That's 15 years away for me and I don't see how i'm going to make it unless the dow is like at 35K

The Dow will almost certainly double to 35K in 15 years. That would only be about 5% average annual growth which is actually below historic averages.

 

[Grace Under Pressure]

Firecalc assumes no social security.

One thing I'm not wild about Firecalc. It gives a 78.9% chance for $600K to last 15 years spending 40K per year. I understand it's because a mix of 75/25 would go down enough in 21% of cases to erode the portfolio so it couldn't make it the 15 years, but still. 600K/15 years is $40K per year. So I'd feel a little more confident than 79% on that scenario.

 

[NutterButter]

Firecalc assumes no social security.

One thing I'm not wild about Firecalc. It gives a 78.9% chance for $600K to last 15 years spending 40K per year. I understand it's because a mix of 75/25 would go down enough in 21% of cases to erode the portfolio so it couldn't make it the 15 years, but still. 600K/15 years is $40K per year. So I'd feel a little more confident than 79% on that scenario.

You can configure it to take SS into account.

 

[xulf]

Having issues saving much these days... Been bothering me for a bit. New house + two daycares = cement blocks around our ankles for a bit.

The only thing I hang onto is that once those daycares are gone we can take that $30K annual and boost the savings quickly

That sucks.

People told me having children would be expensive.

My wife not working anymore was certainly a fairly large expense, as is insuring two new children.

But the offset of having two small children under 18 months has made me unable to do almost any of my hobbies, we certainly don't go out to eat, and haven't taken any vacation in nearly 2 years.

Frankly, I'm saving MORE money since having those children because I spent a crapload on travel and leisure pursuits.

The downside is that there are several moments during the week that I contemplate offing myself because all I do is work, come home, and then participate in child care, goto bed, rinse wash repeat... fortunately a child smiles or laughs or does something cute and I continue living.

I have a 3 yr old and a 20 month old. Expenses increase for sure as they get older. The wife will pick up new toys and clothes all the time. On a vaca for the first time in 2.5 years. While great, frugality goes out the window and money gets flushed down the toilet every time you order them food. They are great, but a drain.

 

[FUBAR]

Having issues saving much these days... Been bothering me for a bit. New house + two daycares = cement blocks around our ankles for a bit.

The only thing I hang onto is that once those daycares are gone we can take that $30K annual and boost the savings quickly

That sucks.

People told me having children would be expensive.

My wife not working anymore was certainly a fairly large expense, as is insuring two new children.

But the offset of having two small children under 18 months has made me unable to do almost any of my hobbies, we certainly don't go out to eat, and haven't taken any vacation in nearly 2 years.

Frankly, I'm saving MORE money since having those children because I spent a crapload on travel and leisure pursuits.

The downside is that there are several moments during the week that I contemplate offing myself because all I do is work, come home, and then participate in child care, goto bed, rinse wash repeat... fortunately a child smiles or laughs or does something cute and I continue living.

I have a 3 yr old and a 20 month old. Expenses increase for sure as they get older. The wife will pick up new toys and clothes all the time. On a vaca for the first time in 2.5 years. While great, frugality goes out the window and money gets flushed down the toilet every time you order them food. They are great, but a drain.

It doesn't get better.

 

[Binky The Doormat]

Having issues saving much these days... Been bothering me for a bit. New house + two daycares = cement blocks around our ankles for a bit.

The only thing I hang onto is that once those daycares are gone we can take that $30K annual and boost the savings quickly

That sucks.

People told me having children would be expensive.

My wife not working anymore was certainly a fairly large expense, as is insuring two new children.

But the offset of having two small children under 18 months has made me unable to do almost any of my hobbies, we certainly don't go out to eat, and haven't taken any vacation in nearly 2 years.

Frankly, I'm saving MORE money since having those children because I spent a crapload on travel and leisure pursuits.

The downside is that there are several moments during the week that I contemplate offing myself because all I do is work, come home, and then participate in child care, goto bed, rinse wash repeat... fortunately a child smiles or laughs or does something cute and I continue living.

I have a 3 yr old and a 20 month old. Expenses increase for sure as they get older. The wife will pick up new toys and clothes all the time. On a vaca for the first time in 2.5 years. While great, frugality goes out the window and money gets flushed down the toilet every time you order them food. They are great, but a drain.

It doesn't get better.

The real money hits start when they start driving ...then go to college. Car insurance, extra spending money, more clothes, car repairs, and more car repairs (or bigger, newer car), tuition, books, etc. Just hitting us in the last year - brutal.

 

[xulf]

Question - How much, as a family, are people putting into their 401k and IRAs?

 

[FUBAR]

Question - How much, as a family, are people putting into their 401k and IRAs?

22% automatically in tsp - 18% in Roth, 4% traditional. An extra 5k in my wife's every year.

 

[FUBAR]

Having issues saving much these days... Been bothering me for a bit. New house + two daycares = cement blocks around our ankles for a bit.

The only thing I hang onto is that once those daycares are gone we can take that $30K annual and boost the savings quickly

That sucks.

People told me having children would be expensive.

My wife not working anymore was certainly a fairly large expense, as is insuring two new children.

But the offset of having two small children under 18 months has made me unable to do almost any of my hobbies, we certainly don't go out to eat, and haven't taken any vacation in nearly 2 years.

Frankly, I'm saving MORE money since having those children because I spent a crapload on travel and leisure pursuits.

The downside is that there are several moments during the week that I contemplate offing myself because all I do is work, come home, and then participate in child care, goto bed, rinse wash repeat... fortunately a child smiles or laughs or does something cute and I continue living.

I have a 3 yr old and a 20 month old. Expenses increase for sure as they get older. The wife will pick up new toys and clothes all the time. On a vaca for the first time in 2.5 years. While great, frugality goes out the window and money gets flushed down the toilet every time you order them food. They are great, but a drain.

It doesn't get better.

The real money hits start when they start driving ...then go to college. Car insurance, extra spending money, more clothes, car repairs, and more car repairs (or bigger, newer car), tuition, books, etc. Just hitting us in the last year - brutal.

We keep telling ourselves they can get jobs but somehow I think that won't cover everything

 

[KCitons]

Question - How much, as a family, are people putting into their 401k and IRAs?

Wife's TSP is maxed, including catch up contributions. Both of our Roth's are maxed for this year. I contribute 10% to my companies 401k (thinking about upping it to 20%). Another 40% of my income is either going into savings (for next years Roth) or index funds.

 

[Binky The Doormat]

Having issues saving much these days... Been bothering me for a bit. New house + two daycares = cement blocks around our ankles for a bit.

The only thing I hang onto is that once those daycares are gone we can take that $30K annual and boost the savings quickly

That sucks.

People told me having children would be expensive.

My wife not working anymore was certainly a fairly large expense, as is insuring two new children.

But the offset of having two small children under 18 months has made me unable to do almost any of my hobbies, we certainly don't go out to eat, and haven't taken any vacation in nearly 2 years.

Frankly, I'm saving MORE money since having those children because I spent a crapload on travel and leisure pursuits.

The downside is that there are several moments during the week that I contemplate offing myself because all I do is work, come home, and then participate in child care, goto bed, rinse wash repeat... fortunately a child smiles or laughs or does something cute and I continue living.

I have a 3 yr old and a 20 month old. Expenses increase for sure as they get older. The wife will pick up new toys and clothes all the time. On a vaca for the first time in 2.5 years. While great, frugality goes out the window and money gets flushed down the toilet every time you order them food. They are great, but a drain.

It doesn't get better.

The real money hits start when they start driving ...then go to college. Car insurance, extra spending money, more clothes, car repairs, and more car repairs (or bigger, newer car), tuition, books, etc. Just hitting us in the last year - brutal.

We keep telling ourselves they can get jobs but somehow I think that won't cover everything

He has 30 hour a week job - barely keeps him in gas and mess around money. Plus we have him on a payment plan to pay back mucho monies we have put up for various support - car repairs and tickets.

ETA: yet he is convinced he can afford to move out with his buddy ...

 

[FUBAR]

^ makes me wonder how we ever did it

 

[Binky The Doormat]

^ makes me wonder how we ever did it

Oh hell yeah, I worked full time for the most part throughout college and still stayed broke. Paid for my books/car and car insurance/gas and party money. This is where I learned to love cheap beer and not going out until we were already pretty snookered in order to save money.

French lager - Geobel $3 12-pack delivered to doom room with tip

Braumeister/Robin Hood Ale - $5 a case of returnables

 

[Tiger Fan]

Question - How much, as a family, are people putting into their 401k and IRAs?

About 21% of our family's gross income. Actual % varies dependent upon bonuses

 

[xulf]

Question - How much, as a family, are people putting into their 401k and IRAs?

22% automatically in tsp - 18% in Roth, 4% traditional. An extra 5k in my wife's every year.

Question - How much, as a family, are people putting into their 401k and IRAs?

Wife's TSP is maxed, including catch up contributions. Both of our Roth's are maxed for this year. I contribute 10% to my companies 401k (thinking about upping it to 20%). Another 40% of my income is either going into savings (for next years Roth) or index funds.

Question - How much, as a family, are people putting into their 401k and IRAs?

About 21% of our family's gross income. Actual % varies dependent upon bonuses

Thanks for these responses.

My wife is currently in grad school to become an nurse practitioner and will finish May/June next year. I just finished grad school earlier this year. Needless to say, paying for both programs (~$90,000 when all is said and done) has put a dent in the savings. Once she finishes school, gets a job, and is eligible for retirement, I am trying to determine if it is wise to max out both 401k plans for the $36,000 (or whatever it will be) or if I should keep more of it liquid. I max out mine and also get an additional 10% of my salary added by my employer. Our assets are highly non-liquid at the moment after paying tuition, contributing to my 401k, paying for healthcare (my employer covers me but I owe what's left for the family), and the bills that come along with having a mortgage and family (3 year old and 1.5 year old). I also have equity tied up in a rental property.

Does it make more sense to have some of this liquid (obviously there needs to be reserves before maxing out everything) or is there almost "too much" that can be added to retirement plans? For the latter part of the question, I guess are there better things to do with savings after you have $20,000 / $30,000 / $40,000 already going to it through retirement contributions and matching?

 

[Dentist]

Question - How much, as a family, are people putting into their 401k and IRAs?

About 21% of our family's gross income. Actual % varies dependent upon bonuses

25K into 401k

11K into backdoor Roth IRAs

6.5K into HSA (combo of saving for now and for the future)

4K into 529 (again, just picking up a future bill now)

About 25%

 

[Buck Bradcanon]

Kid starting 6th grade public school. Chose band as her fine art elective or whatever. Used clarinet costs close to $1,000.

 

[James Daulton]

Kid starting 6th grade public school. Chose band as her fine art elective or whatever. Used clarinet costs close to $1,000.

I remember those feels.

 

[Tiger Fan]

Question - How much, as a family, are people putting into their 401k and IRAs?

22% automatically in tsp - 18% in Roth, 4% traditional. An extra 5k in my wife's every year.

Question - How much, as a family, are people putting into their 401k and IRAs?

Wife's TSP is maxed, including catch up contributions. Both of our Roth's are maxed for this year. I contribute 10% to my companies 401k (thinking about upping it to 20%). Another 40% of my income is either going into savings (for next years Roth) or index funds.

Question - How much, as a family, are people putting into their 401k and IRAs?

About 21% of our family's gross income. Actual % varies dependent upon bonuses

Thanks for these responses.

My wife is currently in grad school to become an nurse practitioner and will finish May/June next year. I just finished grad school earlier this year. Needless to say, paying for both programs (~$90,000 when all is said and done) has put a dent in the savings. Once she finishes school, gets a job, and is eligible for retirement, I am trying to determine if it is wise to max out both 401k plans for the $36,000 (or whatever it will be) or if I should keep more of it liquid. I max out mine and also get an additional 10% of my salary added by my employer. Our assets are highly non-liquid at the moment after paying tuition, contributing to my 401k, paying for healthcare (my employer covers me but I owe what's left for the family), and the bills that come along with having a mortgage and family (3 year old and 1.5 year old). I also have equity tied up in a rental property.

Does it make more sense to have some of this liquid (obviously there needs to be reserves before maxing out everything) or is there almost "too much" that can be added to retirement plans? For the latter part of the question, I guess are there better things to do with savings after you have $20,000 / $30,000 / $40,000 already going to it through retirement contributions and matching?

Without knowing any of your details....you need to be able to project your needs at retirement and work backwards from there.

Do you have any cash saved for emergencies and what not?

ETA: Reference the bolded part of your post, this is pretty much where I'm at. I'm very comfortable that I've got plenty saved for retirement at a very conservative rate. I'm working on what to do next with my strategy, and once I have the information prepared, I will share my high level approach with the thread for those to test.

 

[acarey50]

Question - How much, as a family, are people putting into their 401k and IRAs?

22% automatically in tsp - 18% in Roth, 4% traditional. An extra 5k in my wife's every year.

Question - How much, as a family, are people putting into their 401k and IRAs?

Wife's TSP is maxed, including catch up contributions. Both of our Roth's are maxed for this year. I contribute 10% to my companies 401k (thinking about upping it to 20%). Another 40% of my income is either going into savings (for next years Roth) or index funds.

Question - How much, as a family, are people putting into their 401k and IRAs?

About 21% of our family's gross income. Actual % varies dependent upon bonuses

Thanks for these responses.

My wife is currently in grad school to become an nurse practitioner and will finish May/June next year. I just finished grad school earlier this year. Needless to say, paying for both programs (~$90,000 when all is said and done) has put a dent in the savings. Once she finishes school, gets a job, and is eligible for retirement, I am trying to determine if it is wise to max out both 401k plans for the $36,000 (or whatever it will be) or if I should keep more of it liquid. I max out mine and also get an additional 10% of my salary added by my employer. Our assets are highly non-liquid at the moment after paying tuition, contributing to my 401k, paying for healthcare (my employer covers me but I owe what's left for the family), and the bills that come along with having a mortgage and family (3 year old and 1.5 year old). I also have equity tied up in a rental property.

Does it make more sense to have some of this liquid (obviously there needs to be reserves before maxing out everything) or is there almost "too much" that can be added to retirement plans? For the latter part of the question, I guess are there better things to do with savings after you have $20,000 / $30,000 / $40,000 already going to it through retirement contributions and matching?

Are you bringing in enough to cover your needs - food/shelter/clothing/kids?

Do you have a proper emergency fund (minimum of 3-6 months expenses) that is available outside of your retirement funds(yes you can access Roth IRA contributions if needed, but prefer to keep it separate if possible)?

Do you have any non-mortgage debt?

For me, those are things that need to be addressed before you maximize retirement savings. If you have all of that covered, and are maximizing retirement savings, look at the additional places to apply excess income (paying off mortgage, funding 529/college savings accounts, etc.)

 

[xulf]

Question - How much, as a family, are people putting into their 401k and IRAs?

22% automatically in tsp - 18% in Roth, 4% traditional. An extra 5k in my wife's every year.

Question - How much, as a family, are people putting into their 401k and IRAs?

Wife's TSP is maxed, including catch up contributions. Both of our Roth's are maxed for this year. I contribute 10% to my companies 401k (thinking about upping it to 20%). Another 40% of my income is either going into savings (for next years Roth) or index funds.

Question - How much, as a family, are people putting into their 401k and IRAs?

About 21% of our family's gross income. Actual % varies dependent upon bonuses

Thanks for these responses.

My wife is currently in grad school to become an nurse practitioner and will finish May/June next year. I just finished grad school earlier this year. Needless to say, paying for both programs (~$90,000 when all is said and done) has put a dent in the savings. Once she finishes school, gets a job, and is eligible for retirement, I am trying to determine if it is wise to max out both 401k plans for the $36,000 (or whatever it will be) or if I should keep more of it liquid. I max out mine and also get an additional 10% of my salary added by my employer. Our assets are highly non-liquid at the moment after paying tuition, contributing to my 401k, paying for healthcare (my employer covers me but I owe what's left for the family), and the bills that come along with having a mortgage and family (3 year old and 1.5 year old). I also have equity tied up in a rental property.

Does it make more sense to have some of this liquid (obviously there needs to be reserves before maxing out everything) or is there almost "too much" that can be added to retirement plans? For the latter part of the question, I guess are there better things to do with savings after you have $20,000 / $30,000 / $40,000 already going to it through retirement contributions and matching?

Without knowing any of your details....you need to be able to project your needs at retirement and work backwards from there.

Do you have any cash saved for emergencies and what not?

ETA: Reference the bolded part of your post, this is pretty much where I'm at. I'm very comfortable that I've got plenty saved for retirement at a very conservative rate. I'm working on what to do next with my strategy, and once I have the information prepared, I will share my high level approach with the thread for those to test.

Both my wife and I are 34, so predicting needs in retirement won't really be accurate at this point. We are good savers, but as income grows spending does increase. We will need to put some more in reserves once she is out of school.

Only debt is mortgage and our rental (rent currently covers expenses, not including depreciation, with some leftover).

I know we will be OK in retirement, but I guess I don't want to overspend on it...if that makes sense. Hypothetically, is there a need for $50k-$60k to be dumped in every year with contributions and employer matches? I don't want to live "poor" to retire big if that makes sense.

 

[Doctor Detroit]

I noticed they are running this Frontline again this week for those who haven't seen it.

 

[KCitons]

Both my wife and I are 34, so predicting needs in retirement won't really be accurate at this point. We are good savers, but as income grows spending does increase. We will need to put some more in reserves once she is out of school.

Only debt is mortgage and our rental (rent currently covers expenses, not including depreciation, with some leftover).

I know we will be OK in retirement, but I guess I don't want to overspend on it...if that makes sense. Hypothetically, is there a need for $50k-$60k to be dumped in every year with contributions and employer matches? I don't want to live "poor" to retire big if that makes sense.

I get that you are trying to find the balance in happy now, and living happy in retirement. Part of the reason we save so much now, is because I ignored my half of the retirement equation until I was over 40. Luckily my wife has been paying into her TSP for decades, otherwise we would really be scrambling. The one thing I don't have on my side is time. You have time. As long as you know what you will need in retirement, and the amount you need to save to get there, spend the rest however you want.

Also, we don't have a mortgage payment. Most people are spending around 25% of their income on house payments. If that money is now going into retirement savings, the percentages look skewed by comparison.

 

[James Daulton]

Where does inherited cash fit into the mix?

 

[Tiger Fan]

Question - How much, as a family, are people putting into their 401k and IRAs?

22% automatically in tsp - 18% in Roth, 4% traditional. An extra 5k in my wife's every year.

Question - How much, as a family, are people putting into their 401k and IRAs?

Wife's TSP is maxed, including catch up contributions. Both of our Roth's are maxed for this year. I contribute 10% to my companies 401k (thinking about upping it to 20%). Another 40% of my income is either going into savings (for next years Roth) or index funds.

Question - How much, as a family, are people putting into their 401k and IRAs?

About 21% of our family's gross income. Actual % varies dependent upon bonuses

Thanks for these responses.

My wife is currently in grad school to become an nurse practitioner and will finish May/June next year. I just finished grad school earlier this year. Needless to say, paying for both programs (~$90,000 when all is said and done) has put a dent in the savings. Once she finishes school, gets a job, and is eligible for retirement, I am trying to determine if it is wise to max out both 401k plans for the $36,000 (or whatever it will be) or if I should keep more of it liquid. I max out mine and also get an additional 10% of my salary added by my employer. Our assets are highly non-liquid at the moment after paying tuition, contributing to my 401k, paying for healthcare (my employer covers me but I owe what's left for the family), and the bills that come along with having a mortgage and family (3 year old and 1.5 year old). I also have equity tied up in a rental property.

Does it make more sense to have some of this liquid (obviously there needs to be reserves before maxing out everything) or is there almost "too much" that can be added to retirement plans? For the latter part of the question, I guess are there better things to do with savings after you have $20,000 / $30,000 / $40,000 already going to it through retirement contributions and matching?

Without knowing any of your details....you need to be able to project your needs at retirement and work backwards from there.

Do you have any cash saved for emergencies and what not?

ETA: Reference the bolded part of your post, this is pretty much where I'm at. I'm very comfortable that I've got plenty saved for retirement at a very conservative rate. I'm working on what to do next with my strategy, and once I have the information prepared, I will share my high level approach with the thread for those to test.

Both my wife and I are 34, so predicting needs in retirement won't really be accurate at this point. We are good savers, but as income grows spending does increase. We will need to put some more in reserves once she is out of school.

Only debt is mortgage and our rental (rent currently covers expenses, not including depreciation, with some leftover).

I know we will be OK in retirement, but I guess I don't want to overspend on it...if that makes sense. Hypothetically, is there a need for $50k-$60k to be dumped in every year with contributions and employer matches? I don't want to live "poor" to retire big if that makes sense.

Makes complete sense. Like I said, I'm in the same boat and I'll hope to be finishing up my "strategy" over the next week or so and will definitely share it here.

 

[Steve Tasker]

Where does inherited cash fit into the mix?

I'd say it depends on your situation. For most people, I'd advise that you treat it as found money and do your retirement planning without factoring it in. If you know that you're a trust fund baby with $10 mill coming to you at some point, that's a different story.

 

[Sand]

Where does inherited cash fit into the mix?

In the pile with all the other retirement monies (assuming they've been passed down).

 

[Doctor Detroit]

What means "inherited?"

 

[Dentist]

Question - How much, as a family, are people putting into their 401k and IRAs?

22% automatically in tsp - 18% in Roth, 4% traditional. An extra 5k in my wife's every year.

Question - How much, as a family, are people putting into their 401k and IRAs?

Wife's TSP is maxed, including catch up contributions. Both of our Roth's are maxed for this year. I contribute 10% to my companies 401k (thinking about upping it to 20%). Another 40% of my income is either going into savings (for next years Roth) or index funds.

Question - How much, as a family, are people putting into their 401k and IRAs?

About 21% of our family's gross income. Actual % varies dependent upon bonuses

Thanks for these responses.

My wife is currently in grad school to become an nurse practitioner and will finish May/June next year. I just finished grad school earlier this year. Needless to say, paying for both programs (~$90,000 when all is said and done) has put a dent in the savings. Once she finishes school, gets a job, and is eligible for retirement, I am trying to determine if it is wise to max out both 401k plans for the $36,000 (or whatever it will be) or if I should keep more of it liquid. I max out mine and also get an additional 10% of my salary added by my employer. Our assets are highly non-liquid at the moment after paying tuition, contributing to my 401k, paying for healthcare (my employer covers me but I owe what's left for the family), and the bills that come along with having a mortgage and family (3 year old and 1.5 year old). I also have equity tied up in a rental property.

Does it make more sense to have some of this liquid (obviously there needs to be reserves before maxing out everything) or is there almost "too much" that can be added to retirement plans? For the latter part of the question, I guess are there better things to do with savings after you have $20,000 / $30,000 / $40,000 already going to it through retirement contributions and matching?

Without knowing any of your details....you need to be able to project your needs at retirement and work backwards from there.

Do you have any cash saved for emergencies and what not?

ETA: Reference the bolded part of your post, this is pretty much where I'm at. I'm very comfortable that I've got plenty saved for retirement at a very conservative rate. I'm working on what to do next with my strategy, and once I have the information prepared, I will share my high level approach with the thread for those to test.

Hypothetically, is there a need for $50k-$60k to be dumped in every year with contributions and employer matches? I don't want to live "poor" to retire big if that makes sense.

You have to make a LOT of money to be able to live well now and in retirement.

Most of us have to choose one or the other or have the entire thing be mediocre to crap

 

[FUBAR]

You have to make a LOT of money to be able to live well now and in retirement.

Most of us have to choose one or the other or have the entire thing be mediocre to crap

Define "live well".

You can live a very good, enjoyable and satisfying life without spending a lot of money.

Sure, you'll probably need to decide whether to join that country club now or in retirement, whether to own a beach house or live in a less expensive town, whether to drive used cars instead of leasing a new car every couple of years, but none of those choices really mean you're not living well.