Spinoff to the income question

I have a friend who puts her entire salary into her 401k (up to the yearly max) and the rest into savings for her and her DH's retirement. They live off of her DH's salary which must be good since they just bought a BMW and live in a very nice area.

If you could, would you do that? (I would).

If you cannot afford to do that, how much do you think we should be putting away for retirement? My DH and I usually do 10% of our salaries for our 401ks.

Re: Spinoff to the income question

I would definately do that if we could afford to. DH makes pretty good money. Me not so much. If we didn't each have car payments and his credit cards are up there because he is taking his cpa exam and then his student loans, we could live off his salary no problem and save all of mine, which would be a big help. we'd have a house right now. But we can't. I think he puts between 5-10% in his 401k. I don't have a 401k.

Re: Spinoff to the income question

That would be awesome!

Once we paid off debt and if we didn't have basicallh 2 households to support we could probably pull this off.

As of right now I put 2% into my 401K since that's what they match

Message edited 2/9/2008 4:03:17 PM.

Re: Spinoff to the income question

since I have been out of work once I had DS DH & I have had a chance to re-prioritize our spending/saving. If I were to return to work, a small portion of my take-home salary would go toward making early payments on some debt, and the rest would be put into savings, CDs and 401K.

Re: Spinoff to the income question

This is a goal of ours, but it isn't happening. Right now, however, I put in 15% of my salary into my TDA and TRS.

Re: Spinoff to the income question

I would love to be able to do that- I hope we can once my DH starts his new non-mortgage job next week

currently I put 8% in my 401K and another $150 a month in an IRA at my bank

and I try to save at least 20% of my take home- but the past year wasn't so easy- but that should change also now that my DH will have a steady paycheck-

Re: Spinoff to the income question

I think that is great.
I personally, would not be working if we could comfortably live off my dh's salary.

Re: Spinoff to the income question

That's kinda what we do. DH and I both put the max into our 401K... which I think it 18%. The rest of my salary goes into savings and we live off of DH's. My salary is not necessarily saved for retirement, but can be used for our future children or for emergencies, etc.

Re: Spinoff to the income question

I think that's great. I wish we could do that. Right now, I am a SAHM, start working PT next month and over the summer I plan on getting a job as well (My first PT job will end the end of June).
Im hoping to use some of the salary from these jobs to help with bills and plan on putting some into savings for retirement. It's not a lot, but, it's more than Im making now, staying home.
When we are done having children I will most likely go to work FT while they are in school.

Re: Spinoff to the income question

I max my 401k every year. Right now the max is $15,500 per year per individual. I think that equals about 15% of my salary. I know my last paycheck per year is always more because I usually end up maxing it sometime in December.

I max it now because I have been maxing it ever since I started working so I really don't see the "hit" in my paycheck.

This also helps because if we ever fall on some more difficult times where we need to bring home more cash per month quickly, I can reduce my 401k withholdings to say 7-8%, still have a decent amount of cash going in yearly, and be able to bring home a good $600-700 more a month.

I am not bothering with any IRA right now since I am maxing the 401k. Too many bills!

Re: Spinoff to the income question

DH and I are very fortunate that we could live off of either one of our salaries. While we do not do that per se, we both max out our 401Ks, put $$ in an IRA, save a set amount each month in Emigrant, and very importantly, make an extra payment each month on our student loans.

I think it is very important to save for retirement and if we could not do the above, I would put in 10% of my salary (at a minimum) towards retirement.

Re: Spinoff to the income question

I believe are limits to what you can contribute to an IRA/ROTH..etc..

the limit on the 401(k) is $15,500 currently. SO putting the rest away in an account may not be tax sheltered (at least some of it)

We put away the max each year from our 401(k)s. We do not have any IRAs that we contribute to at this point. We have IRAs and we are not contributing to them at this time. We do have non-retirement assets that are diversified.

Message edited 2/9/2008 9:29:20 PM.

Re: Spinoff to the income question

I basically did just that, from the time we bought our house, got engaged and while I worked FT before having our first child (total of about 4 years time).

It helped us out in a great way because we knew how to budget so that I knew what I would be up against when I became a SAHM, plus it helped me build up a really nice 401K plan.

Re: Spinoff to the income question

i would love to do that! But we can't.

I put 10% into my 401k.

Message edited 2/9/2008 10:02:29 PM.

Re: Spinoff to the income question

I contribute the max to my 401k every year, my DH was self employed for many years so we considered it our main retirement account. I also have a keogh through work that does pretty well.
Now with DH's position it is likely that by 2009 we won't "need" my salary but I'm focusing on putting the max in DSD's 529 over the next 4 years.
So to answer your question if or when we could we would use my income strictly for retirement or other investments.

Re: Spinoff to the income question

eta: i misread what they are doing....

as long as all the $$ isn't going into strictly retirement, and they are investing in mutual funds and stocks that they could take from if needed, thats awesome

Message edited 2/10/2008 7:55:23 AM.

Re: Spinoff to the income question

We essentially do that. We invest just about 50% of our take home pay, which is more than my DH's entire take home. This is AFTER we both max our our 401(k) contributions, too.

We believe in living well beneath your means, not at or beyond them.

ETA -- We are not investing our take home pay in retirement-specific accounts like IRAs either. We have many other investments and investment plans for the future, including stocks, bonds, mutual funds, real estate, etc.

Message edited 2/10/2008 8:19:39 AM.

Re: Spinoff to the income question

We bought our house with just one salary in mind and I was a sahm for a bit - so we are able to live on one salary. I would sack all my salary away - but we need it for daycare - what's left over goes to fun spending or savings

Re: Spinoff to the income question

We're still essentially living off my salary while DH is interning... so very little goes into my 403B. When DH works next year (and will be making more than me) we're going to use almost my entire salary to pay off debt/put into savings/and put into a 403B.

While we don't have much in our retirement, I'm happy to say that I've been contributing since my second paycheck. I know it's better to start early with a bit of money, instead of later with more.

Re: Spinoff to the income question

That's our goal so yes once we can afford it we would work toward doing that.
We both max out our 401K's.

Re: Spinoff to the income question

I put 21% into my TDA and save a little each month. I have some spending cash left over.

DH pays all of the bills, except for my car and credit card.

Re: Spinoff to the income question

we sort of do that... DH makes almost twice what i make, so he maxes out his 401K and puts a lot of his salary into savings.
more of my salary is used to pay house bills, etc
so we're not totally living off of one salary, but we definitely save more of DHs salary for the future and spend more of mine.

Re: Spinoff to the income question

We do this. We live off of DH's salary and save mine, but not for retirement. We live in a one bedroom that was bought years ago and our mortgage is tiny.

I invest in my retirement account as does DH, but my paychecks don't get spent at all. They are saved and invested for our future home, kids, etc.

This will all change with the purchase of a home, but hopefully this sacrifice will help off set our mortgage in the future.

I can't see being able to live like that when we buy a home on LI.

Re: Spinoff to the income question

If we could - we would definitely do it!

We each put about 10% into our company sponsored retirement funds right now and also have more liquid savings for "in case of emergencies".

Re: Spinoff to the income question

We have been living off DH's salary for awhile now- my salary goes to pay off the debt. Once we finish paying off the debt (hopefully by March/April) my paycheck will go towards savings for when I become a SAHM. We are also able to contribute 10% of our total income to different retirement/savings accounts. I plan to work P/T after the babies are born and that will go towards a short term savings account.