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stinger
LIF Adult
Member since 11/11 4971 total posts
Name:
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Retirement savings
When i look at my retirement account through my employer it says i am on track and have a "sunny" outlook.
Wheni googled how much I should have saved it says almost 3x my annual salary which i do not (by age 45)!!
So which should i trust?
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Posted 9/11/17 1:19 PM  |
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Jenhos
Maeve
Member since 6/05 3273 total posts
Name:
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Re: Retirement savings
I would go by what your employer is saying. 3x your salary at what point of your career. If I had gone by that advice when I was 25 vs. 30 those would be very different figures. You also need to take into consideration other factors. Do you own a home? Have a pension? Where do you plan to live in your retirement? You could consult your accountant or find a financial planner to help as well.
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| Posted 9/11/17 1:32 PM |
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LSP2005
Bunny kisses are so cute!
Member since 5/05 19461 total posts
Name:
L
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Re: Retirement savings
Here is a good rule of thumb list.
By age 35: Have twice your annual salary saved.
By age 40: Have three times your annual salary saved.
By age 45: Have four times your annual salary saved.
By age 50: Have five times your annual salary saved.
By age 55: Have six times your annual salary saved.
By age 60: Have seven times your annual salary saved.
By age 65: Have eight times your annual salary saved.
this is a good questionnaire to help you figure out the percentage to aim to spend for many common categories:
Compare your actual spending with the suggested or ideal percentages. First
determine your net monthly income or bring home pay then use this figure to
calculate your percentages.
Housing
Housing costs for those who rent consist of: rent, utilities, renter’s insurance.
Those with a mortgage: mortgage payment, taxes, insurance, utilities, homeowner repairs.
________________ ÷ ______________ = _________________% Suggested housing = 30%
(I personally would aim to have this category lower than 30% because it is a fixed cost. Getting your fixed costs lower can help you save more. I personally would aim to spend no more than 25% on housing.
Total Housing Costs Net Monthly Income Your housing percentage
Auto/transportation
Automobile and transportation costs consist of: auto payment(s), insurance, gasoline, oil changes, license,
parking, tolls, registration and repairs
.
______________ ÷ ______________ = _____________________% Suggested = 15%
Total Transportation Net Monthly Income Your transportation percentage
Food/Grocery/Cleaning/Household Supplies
Food, grocery, cleaning and household supplies consist of: groceries, eating out, take out, snacks,
sodas, cleaning, paper, plastic products and other household supplies
_____________ ÷ ______________ = ____________________% . Suggested = 15%
Total Food/Grocery Net Monthly Income Your food/grocery percentage
The three expenses above should not exceed 65% of net income. For example, If housing is 40%, then the percentages of food and auto together cannot exceed 25%.
Savings
Savings are funds saved from net income (bring home pay) to cover emergencies for household, auto,
medical and dental expenses, insurance deductibles, speeding tickets, down payments on large purchases,
vacations or trips, etc.
_________________ ÷ ______________ = ________________% Suggested = 10% or more
Total Savings Net Monthly Income Your saving percentage
Debt and/or Charitable Contributions
Debts refer to the monthly amounts paid on debts. Charitable Contributions are the amounts given to
churches and other charities.
________________________ ÷ ____________ = ____________________% Suggested = 15% or less
Total Debt/Charitable Contributions Net Monthly Income Your Debt/Charity percentage
Miscellaneous
These are all your other expenses, for example: phones/cell phones, Internet, cable/satellite tv, medical and
dental expenses, eyeglasses/contacts, child care, gifts (Christmas, birthdays, anniversaries, weddings,
babies), entertainment, insurance deductibles, recreation, alcohol and tobacco products, personal grooming
(hair/nails), pet expenses, etc.
____________________ ÷ ______________ = _____________________% Suggested = 15%
Total Miscellaneous Expense Net Monthly Income Your Miscellaneous percentage
Message edited 9/11/2017 8:58:09 PM.
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| Posted 9/11/17 6:07 PM |
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BabySurprise
LIF Adolescent
Member since 9/13 556 total posts
Name:
Me
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Retirement savings
Oh Jesus. I'm screwed lol
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| Posted 9/11/17 7:05 PM |
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ChilisWife
God Bless America
Member since 5/05 3572 total posts
Name:
A.K.
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Re: Retirement savings
It's amazing what the "goals" are supposed to be. As if everyone is making a ton of money. "They" tell you that you should have X amount saved for retirement and Y amount saved for college (for each child) and at least 6 months of bills saved as liquid cash. Whatever.
I do well and have worked steadily since I was 16 but no way do I have close to 3X my salary at age 45. If I put any more of my salary into some kind of savings - retirement, college, whatever - then I would lose my house and my utilities would be turned off. Yes it worries me but there is literally nothing I can do about it.
Message edited 9/11/2017 7:13:45 PM.
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| Posted 9/11/17 7:13 PM |
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LSP2005
Bunny kisses are so cute!
Member since 5/05 19461 total posts
Name:
L
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Re: Retirement savings
Posted by ChilisWife
It's amazing what the "goals" are supposed to be. As if everyone is making a ton of money. "They" tell you that you should have X amount saved for retirement and Y amount saved for college (for each child) and at least 6 months of bills saved as liquid cash. Whatever.
I do well and have worked steadily since I was 16 but no way do I have close to 3X my salary at age 45. If I put any more of my salary into some kind of savings - retirement, college, whatever - then I would lose my house and my utilities would be turned off. Yes it worries me but there is literally nothing I can do about it.
Of course it is easier to save if you make more, and living on LI makes things a lot harder to save, but at the same time these are guides. It is not saying you need $300K by the time you are x, it is saying if you make $50 then by 40 you should have $150,000. I will say, at that income level, it is very difficult to save that much, but not impossible. I would aim to save any raise you receive before you get it have it directed to your 401k so you will not feel the raise.
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| Posted 9/11/17 8:43 PM |
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Mrs213
????????
Member since 2/09 18986 total posts
Name:
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Re: Retirement savings
Posted by BabySurprise
Oh Jesus. I'm screwed lol
Same lol. Whatever, we're all gonna die anyway
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| Posted 9/11/17 9:06 PM |
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GoldenRod
10 years on LIF!
Member since 11/06 26792 total posts
Name:
Shawn
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Re: Retirement savings
Posted by LSP2005
Here is a good rule of thumb list.
By age 35: Have twice your annual salary saved.
By age 40: Have three times your annual salary saved.
By age 45: Have four times your annual salary saved.
By age 50: Have five times your annual salary saved.
By age 55: Have six times your annual salary saved.
By age 60: Have seven times your annual salary saved.
By age 65: Have eight times your annual salary saved.
...
That means you need to save roughly 20% of your salary? If you add 1X of your salary every 5 years, it means 20% per year. Plus, you need to have the money already in accounts increase along with your salary so it still stays at X times your salary. Hopefully you'll have a plan with a decent return, but that return basically just keeps up your existing investment with your salary increase.
For a $100k salary, the recommendation is to save $20k per year? Before taxes? How is that possible?
Plus, you need to save for DC's college, pay off the mortgage, buy food and utilities, etc.
To live on $100k salary, you need to take in an additional $50k....  
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| Posted 9/12/17 8:08 AM |
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JennP
LIF Adult
Member since 10/06 3986 total posts
Name:
Jenn
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Re: Retirement savings
Retirement is a big part of the reason I even work full time.
I see what is happening with my mom who may very well outlive her money and it's scary.
I would never want my son to have to worry about me 30-40 years from now when I'm old and he (hopefully) has a family.
That said, we do try to balance it out and live for now as well because my dad died young and my parents never got to have a nice retirement together. Plus my father in law went blind and while they do travel it's not the same.
So we try to do some of what we want to do now while we can.
It's not easy.
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| Posted 9/12/17 8:35 AM |
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blu6385
Member since 5/08 8351 total posts
Name:
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Re: Retirement savings
Posted by BabySurprise
Oh Jesus. I'm screwed lol
me too!!
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| Posted 9/12/17 8:47 AM |
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Blazesyth
*yawn*
Member since 5/05 8129 total posts
Name:
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Re: Retirement savings
Posted by GoldenRod
That means you need to save roughly 20% of your salary? If you add 1X of your salary every 5 years, it means 20% per year. Plus, you need to have the money already in accounts increase along with your salary so it still stays at X times your salary. Hopefully you'll have a plan with a decent return, but that return basically just keeps up your existing investment with your salary increase.
For a $100k salary, the recommendation is to save $20k per year? Before taxes? How is that possible?
Plus, you need to save for DC's college, pay off the mortgage, buy food and utilities, etc.
To live on $100k salary, you need to take in an additional $50k....
It doesn't make sense even when you consider the gov't limits for retirement.
I've been contributing to retirement since I was 25, so the last 15 years. The last 10 of those years, I've been maxing out the contribution (17%). And in 5 years I still won't have 4x my salary, unless the economy goes crazy (upwards).
Sure, there is other money in other non-retirement places, but please. If the real recommendation is 20% then at least up the government limits for saving.
Message edited 9/12/2017 9:22:29 AM.
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| Posted 9/12/17 9:19 AM |
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LSP2005
Bunny kisses are so cute!
Member since 5/05 19461 total posts
Name:
L
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Re: Retirement savings
Posted by GoldenRod
That means you need to save roughly 20% of your salary? If you add 1X of your salary every 5 years, it means 20% per year. Plus, you need to have the money already in accounts increase along with your salary so it still stays at X times your salary. Hopefully you'll have a plan with a decent return, but that return basically just keeps up your existing investment with your salary increase.
For a $100k salary, the recommendation is to save $20k per year? Before taxes? How is that possible?
Plus, you need to save for DC's college, pay off the mortgage, buy food and utilities, etc.
To live on $100k salary, you need to take in an additional $50k....
It means you are maxing out your 401k and have an employer match while achieving an average 7% gain in the stock market to take into account inflation. Alternatively, it means maxing both a 401k with no match and an IRA. I am by no means saying it is easy to accomplish, but it is the goal to achieve a healthy retirement when you don't have a pension plan to rely upon.
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| Posted 9/12/17 9:29 AM |
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DiamondGirl
You are my I love you
Member since 7/09 18802 total posts
Name:
DiamondMama
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Re: Retirement savings
Posted by JennP
Retirement is a big part of the reason I even work full time.
I see what is happening with my mom who may very well outlive her money and it's scary.
I would never want my son to have to worry about me 30-40 years from now when I'm old and he (hopefully) has a family.
That said, we do try to balance it out and live for now as well because my dad died young and my parents never got to have a nice retirement together. Plus my father in law went blind and while they do travel it's not the same.
So we try to do some of what we want to do now while we can.
It's not easy.
I agree w a lot of this, we could live on my husbands salary but when I think of the future, our retirement, college, I know that in order to do things the way we want I need to work, we are fortunate enough that we are able to save for both college and retirement bc of my income.
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| Posted 9/12/17 9:47 AM |
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