Full Version: Planning for the stages of retirement
That is some good info, thanks Monga.
I also found [url=http://beginnersinvest.about.com/od/401k/a/aa122104a.htm]this[url] to be pretty good as well.
I do have a question about some info from your article though:
Do you guys actually save 10%? My employer only matches up to 4%. I'm still new to this, but I get that the more you save the better. However, 10% just seems like a lot considering you are only getting matched 4%.
I also found [url=http://beginnersinvest.about.com/od/401k/a/aa122104a.htm]this[url] to be pretty good as well.
I do have a question about some info from your article though:
QUOTE(Financial Planet)
Try to save at least 10 percent pre-tax income in your (401k) plan, up to the limit the plan allows. Saving 10 percent isn't as difficult as it may seem, because it won't cost you 10 percent to save 10 percent. Depending on your tax bracket, it may only cost you six to seven percent or less (with state taxes factored in) on an after-tax basis.
Do you guys actually save 10%? My employer only matches up to 4%. I'm still new to this, but I get that the more you save the better. However, 10% just seems like a lot considering you are only getting matched 4%.
Save all you can, especially if you have them take it out of your check. If you don't get the money, you can't spend it! I wish someone advised me to do this at a young age. I have tried to drill it into my kids, and so far it is starting to take. Living BELOW your means now, will allow you to live well in retirement. The power of compounding really can work when you start early.
QUOTE(wheel @ 11-28-06, 11:52am) 
Save all you can, especially if you have them take it out of your check. If you don't get the money, you can't spend it! I wish someone advised me to do this at a young age. I have tried to drill it into my kids, and so far it is starting to take. Living BELOW your means now, will allow you to live well in retirement. The power of compounding really can work when you start early.
Have you read The Automatic Millionaire by David Bach? That's what I"m reading through right now and your advice is pretty much the same as his, that's why I ask.
I just wondered if maybe putting only 5% in the 401(k) and the extra in an IRA. But I guess I'll have to look into that. I did some paycheck calculators to see what kind of money I'll be saying after taxes, and I think I will be able to live on putting 10% (which would be before taxes) into the 401(k) and then 10% (which would be after taxes) into a Roth IRA. Which according to everything I've read will put me in really good shape.
It's easy saying it's possible looking at it on paper though. I still have loans and those type of things to pay, not to mention housing.
Thanks for the advice.
QUOTE(n99nyrwg @ 11-28-06, 9:33am)
Have you read The Automatic Millionaire by David Bach? That's what I"m reading through right now and your advice is pretty much the same as his, that's why I ask.
I just wondered if maybe putting only 5% in the 401(k) and the extra in an IRA. But I guess I'll have to look into that. I did some paycheck calculators to see what kind of money I'll be saying after taxes, and I think I will be able to live on putting 10% (which would be before taxes) into the 401(k) and then 10% (which would be after taxes) into a Roth IRA. Which according to everything I've read will put me in really good shape.
It's easy saying it's possible looking at it on paper though. I still have loans and those type of things to pay, not to mention housing.
Thanks for the advice.
I just wondered if maybe putting only 5% in the 401(k) and the extra in an IRA. But I guess I'll have to look into that. I did some paycheck calculators to see what kind of money I'll be saying after taxes, and I think I will be able to live on putting 10% (which would be before taxes) into the 401(k) and then 10% (which would be after taxes) into a Roth IRA. Which according to everything I've read will put me in really good shape.
It's easy saying it's possible looking at it on paper though. I still have loans and those type of things to pay, not to mention housing.
Thanks for the advice.
No I have not read it, but I have been "educating" myself as I get ready to pull the trigger on an early retirement. If I get a chance, I will list some great calculators that use all different types of approaches to determining if you have enough to live in the fashion that you want to. Many today are blindly heading towards retirement with minimal savings and just figure it will work out. That kind of approach is foolish, and you can't count on anyone but yourself to take care of you.
If your employer provides any match at all, put that amount into your 401K - their money is free, and it just increases your effective yield on your investment.
QUOTE(wheel @ 11-28-06, 9:50am)
If your employer provides any match at all, put that amount into your 401K - their money is free, and it just increases your effective yield on your investment.
that's good advice.
Also put the max you're allowed into a roth ira.
QUOTE(sarinne @ 11-28-06, 4:39pm)
that's good advice.
Also put the max you're allowed into a roth ira.
Also put the max you're allowed into a roth ira.
Yeah, I was just reading it's recommended to do it in this order:
Put the most amount you can in 401(k) that your company will match
Max out your Roth IRA
Then max out your 401(k) (this will be unmatched)
The 10% idea has been around for a long, long time and it really isn't such a bad idea for people who have no interest or time to handle their retirement portfolio. Personally, I like to go with the 401k match, then Roth max, then other individual investments approach.
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