dancinmama
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LIVIN' THE DREAM!!
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Post by dancinmama on Apr 30, 2011 0:24:29 GMT -5
I've never understood how anyone in their mid 20's to mid 30's even is able to "save" 250-500K...really?! Nothing rocket science about it - 11 yrs x $25-35k retirement plan contributions/yr (about 25% of our gross salaries) - diversify beyond the stock market into cash flowing real estate. Planning to rinse, repeat twice more and retire at about 55. Inflation is our concern - will this that we've built be worth anything? mesquite: It will be worth a lot more than if you didn't save anything at all!! Seriously, though. It can be done. DH started contributing the maximum to his 401k at age 24 (his salary at that time was a whopping $16K for an entry level professional). We were single income after DS was born 6 years later. He will be retiring in early 2012 at age 55. Just keep plugging away.
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cronewitch
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Post by cronewitch on Apr 30, 2011 3:46:53 GMT -5
I've never understood how anyone in their mid 20's to mid 30's even is able to "save" 250-500K...really?! Nothing rocket science about it - 11 yrs x $25-35k retirement plan contributions/yr (about 25% of our gross salaries) - diversify beyond the stock market into cash flowing real estate. Planning to rinse, repeat twice more and retire at about 55. Inflation is our concern - will this that we've built be worth anything? Most retirement plans limit people to 15.5K a year and most aren't earning enough to save the max at 25. It isn't as hard at 35 but it takes a while to get 250K saved. I am over 50 so can put more in the 401K and have maxed it the last 9 years but it doesn't have 250K yet. For a couple putting in 25K-35K a year total it would be possible to hit 250K each but some luck in choosing investments would be needed. That is only an average contribution of 15K each or 165K total and at a time of life when most are buying a first house and having babies and paying down student loans. Congratulations on doing that, it can't be easy saving 20% so young or earning so much that 20% is 15K.
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constanz22
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Post by constanz22 on Apr 30, 2011 6:35:17 GMT -5
I've never understood how anyone in their mid 20's to mid 30's even is able to "save" 250-500K...really?! Nothing rocket science about it - 11 yrs x $25-35k retirement plan contributions/yr (about 25% of our gross salaries) - diversify beyond the stock market into cash flowing real estate. Planning to rinse, repeat twice more and retire at about 55. Inflation is our concern - will this that we've built be worth anything? Ok, but, again, as I stated in my post, it wouldn't ever happen on MY salary. I barely made 25-35K a year for the first 15 years of my career. I guess I just know a whole lot more "average worker bees" like myself, people who are social workers, probation officers, etc. This is OUR reality...
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Deleted
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Post by Deleted on Apr 30, 2011 7:59:08 GMT -5
Nothing rocket science about it - 11 yrs x $25-35k retirement plan contributions/yr (about 25% of our gross salaries) - diversify beyond the stock market into cash flowing real estate. Planning to rinse, repeat twice more and retire at about 55. Inflation is our concern - will this that we've built be worth anything? Ok, but, again, as I stated in my post, it wouldn't ever happen on MY salary. I barely made 25-35K a year for the first 15 years of my career. I guess I just know a whole lot more "average worker bees" like myself, people who are social workers, probation officers, etc. This is OUR reality... Same here. Six figure incomes are not the norm around here. Doctors and the upper crust at some of the large companies but even doctors would have a hard time with all the student loans and they don't make much until pushing 30 anyhow.
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doxieluvr
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Post by doxieluvr on Apr 30, 2011 8:31:35 GMT -5
"Fifty percent of people age 25-34 have saved less than $10,000."
Unfortunately We are right in this group, and I am approaching the higher age in this range. I thought I did everything right by starting a 40lk when I was 18. I had about $12k in it but then the market dropped and it ended up dropping to near nothing, and eventually the fees ate away at the principal. I started over a year and a half ago when I got his job, and I now have a whopping $1200.
I wish I could afford to save more for retirement. I can barely cover our expenses today let alone saving for future expenses. We had some equity in the house but thats disappeared in the economy.
How do others afford to save? Where am I going wrong?
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ameiko
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Post by ameiko on Apr 30, 2011 9:03:57 GMT -5
Based on age 36 and recently passed 250K in investments, I'm doing better than 92% of my age group.
In general, I think we will find many people on this site doing well compared to their peers: there's a real bias here towards wealth building, retirement planning, and foward thinking.
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ameiko
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Post by ameiko on Apr 30, 2011 9:11:28 GMT -5
Eighteen percent of people age 25-34 have saved $10,000 – $24,999.So... we have more money in our retirement accounts than 82% of people around our age?! (we both have about $12k I think - we're both 28) Guess I didn't realize that so many people at our ages don't think retirement savings is that important (or aren't in a position to do any saving for it) I believe you are reading that wrong: as I understand it, it's 18% have between 10K to 25K, not that 18% have at least at least 10K. So, from: Four percent of people age 25-34 have saved more than $500,000. Two percent of people age 25-34 have saved $250,000 – $499,999. Two percent of people age 25-34 have saved $150,000 – $249,999 for retirement. Seven percent of people age 25-34 have saved $100,000 – $149,999 for retirement. Ten percent of people age 25-34 have saved $50,000 – $99,999. Nine percent of people age 25-34 have saved $25,000 – $49,999. Eighteen percent of people age 25-34 have saved $10,000 – $24,999. Fifty percent of people age 25-34 have saved less than $10,000.at least 4% (above 500K) + 2% (250K-500K) + 2% (150K- 250K) + 7% (100K - 150k) + 10% (50K - 100K) + 9% (25K - 50K) + 18% (10k - 25K) such that: at least 52% have at least 10K saved 34% have at least 25K saved between the ages of 25 - 34 So if you have at least 10K in your account, you know that at least 34% (and no more than 52%) are doing better than you are.
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Deleted
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Post by Deleted on Apr 30, 2011 9:14:04 GMT -5
How do others afford to save? Where am I going wrong?
It's not always easy, especially if you have a low income, but you have to make it a priority. Automatic investments off the top have been the biggest help for me. If you wait to invest what's left at the end of the month you'll find there never is anything left, but you'll find a way to live off what's left if the money is gone before you see it. Plus, I up my 401K every year at raise time (if we get one!) We usually only get a 2 or 3% increase and I just up my 401K the same and never notice it. I'm 42 and have about 150K, not a lot by some of the standards here, but 5X my annual income.
Now, my husband is 36 and just started investing 3 years ago. He's up to about 13K, but has been unemployed the past 8 months, so not much getting added but the $200/month we put in his Roth.
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ameiko
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Post by ameiko on Apr 30, 2011 9:15:49 GMT -5
I'm shocked too that 4% of 25-34 year olds have managed to save over $500,000. Even if you are able to achieve the IRS limit for 401/457/etc. & IRA contributions, it takes a heck of a return to reach over $500k by age 34. If that statistic is true, color me impressed! They could be including funds outside of government retirement funds that they have designated for retirement.
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Nazgul Girl
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Babysitting our new grandbaby 3 days a week !
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Post by Nazgul Girl on Apr 30, 2011 10:00:18 GMT -5
I started saving for retirement when I was 38, due to pure fright. Yes, I had saved before, but our failed ( my first husband and I ) business had pulled what savings we had into it in a futile effort to save it. Classic mistake, I know. Anyway, I had a little job working for a doctor that had some kind of retirement savings plan that required the owners to put a little bit of money into accounts for the employees ( SEP-IRAs ? I don't remember ). I had $ 938 in it when I left their employ to take a better job. I opened a 401k with my new employer. Husband then had a fit because I also opened a little IRA for myself to match what he was contributing to his 401k. I think I started it with $ 300. He was so angry that I opened one for him, too. He still had 5x more saved for retirement than I did. I kept working and saving, and putting $ 50 - $ 150 per month into our IRA's, even if we were truly strapped. I set up automatic payments. Every healthcare job that I've had since has had a decent 403b, 401k, or whatever, and I have contributed as much as I can. My second husband has contributed as much as he can, also. We have over $ 500,000 saved in IRA's ( top salaries for us: husband $ 55000, me, $ 42,000 ), and $ 120,000 in my current employer's 403b. I am still working, so if I absolutely have to work until I get health insurance as a retiree, which will be a lot longer now because my employer recently revamped the requirements to qualify, I will earn about $300,000 more, and I will have saved another $100,000 with my employer. Also, when we're free of the legal problems caused by the nutbag, which should be ending soon with the promised federal injunction against her ( or so the federal magistrate said ), we'll be able to afford to max out our IRA contributions again. We already have a paid-off house which is presently being used as a rental, and we are in the process of buying a foreclosure to convert to a rental after it's fixed up. It was a cash deal so our closing costs will be pleasantly low. It's really ugly, but we will make it beautiful.
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ejd86
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Post by ejd86 on Apr 30, 2011 11:22:45 GMT -5
I am here, counting just 403b/IRAs Nine percent of people age 25-34 have saved $25,000 – $49,999. But I am only 24, so almost there...
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RoadToRiches
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Formerly "indebt"
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Post by RoadToRiches on Apr 30, 2011 12:10:17 GMT -5
I'm in here: Two percent of people age 25-34 have saved $250,000 – $499,999. So, top 94% (in context). Not bad for not starting working until 25 (of course, more education usually means more salary) I have a lot more saved/invested that aren't in retirement accounts but I didn't count that. How did you manage to do that?
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stats45
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Post by stats45 on Apr 30, 2011 12:13:23 GMT -5
In the $50k to $99K group for 25-34. We are 26 and 23.
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patchwork150
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Post by patchwork150 on Apr 30, 2011 12:30:40 GMT -5
Eighteen percent of people age 25-34 have saved $10,000 – $24,999. Between savings and 401k I have $22,062.70 as of today. I am NOT in this bracket yet (next year I am 25). Last year I was in the bottom 1-50% of this group (but 22-23 years old). I only just paid my debt off in August 2010, and have saved ~$15k since October 2010. I am now doing as well or better than 68% of this age bracket. I bet by next year I will be in the top 77%, and by 34 be in the upper 87% or better
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whispering17
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Life is short...eat dessert first!!
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Post by whispering17 on Apr 30, 2011 13:15:37 GMT -5
This thread actually made me realize I'm doing better than I thought I was. I was a late starter in retirement planning. Now, according to this list, I am doing better than 91% of my age group (55+). So, if my life evolves accordng to this graph, I will have a stable retirement!
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azphx1972
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Post by azphx1972 on Apr 30, 2011 13:50:33 GMT -5
I thought I did everything right by starting a 40lk when I was 18. I had about $12k in it but then the market dropped and it ended up dropping to near nothing, and eventually the fees ate away at the principal. I started over a year and a half ago when I got his job, and I now have a whopping $1200.
I wish I could afford to save more for retirement. I can barely cover our expenses today let alone saving for future expenses. We had some equity in the house but thats disappeared in the economy.
How do others afford to save? Where am I going wrong? If you're young and have time on your side, you've got to stay in the market through the thick and thin. Did that $12k in your 401k evaporate into nothing, or did you cash it out and spend it? I remember when my 401k nosedived from 300k down to 170k during 2008-2009, but instead of selling and locking in my losses (like many people I know did) I stayed in the market and kept contributing. As of today I have nearly 400k in my account thanks to the recovery. If your 401k retirement plan comes with high fees and poor matching, I'd consider maxing out an IRA first. But fees notwithstanding, your $12k would be worth nearly its original value today if you hadn't touched it, and assuming an average 8% rate of return, it would be worth 120k 30 years from now.
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formerexpat
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Post by formerexpat on Apr 30, 2011 13:55:50 GMT -5
Likely where most go wrong. Living in a more expensive home than you can afford, spending more on cars than you can afford and in general, not making retirement savings a priority.
You can post your budget in another thread for people to pick apart if you really want to change your life.
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gooddecisions
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Post by gooddecisions on Apr 30, 2011 17:42:49 GMT -5
I am here: 2% of people age 25-34 have saved $150,000 – $249,999 for retirement. And DF is here: 2% of people age 25-34 have saved $250,000 – $499,999.
Together we should be in pretty good shape. And, that does not include investments outside retirement accounts. I made a very modest salary early on as well, but tightened my belt on expenses and worked overtime in order to contribute close to the max most years so that I could be as well off as the wealthy later on in life (thank you msn boards!). I just wish my employer contribution had been more than 2K/year or I might have been able to make the next bracket up.
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doxieluvr
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Post by doxieluvr on Apr 30, 2011 19:14:53 GMT -5
I did not cash it the 401k out. The value dropped, and I am pretty sure it was in the 2007-2008 time frame It ended up being a couple hundred bucks and the annual fees zapped the last bit of it.
We talked about housing costs in the thread about us wanting to buy a house. We have a cheap house for the area we live in. I think our income is too low for the area. Our cars are insane, but they are not new, and were bought used. We put $600-$800 in gas/diesel in them a month, and until we can find jobs closer to home, this will be our reality for the forseeable future. I took groceries out of the budget but DH is throwing a hissy fit, so this week he is getting groceries. NOw I have to figure out where gas money will be coming from.
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azphx1972
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Post by azphx1972 on Apr 30, 2011 19:37:55 GMT -5
I did not cash it the 401k out. The value dropped, and I am pretty sure it was in the 2007-2008 time frame It ended up being a couple hundred bucks and the annual fees zapped the last bit of it. Wow, sounds like a really bad 401k plan if $12k went to zero. I'm curious about what kind of investments those funds were in.
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buster
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Post by buster on Apr 30, 2011 20:19:30 GMT -5
I did not cash it the 401k out. The value dropped, and I am pretty sure it was in the 2007-2008 time frame It ended up being a couple hundred bucks and the annual fees zapped the last bit of it. Wow, sounds like a really bad 401k plan if $12k went to zero. I'm curious about what kind of investments those funds were in. Definitely shouldn't have happened if it was in some sort of diversified portfolio. Perhaps it was mostly company stock and the company took a nose dive?
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mesquite77
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Post by mesquite77 on May 1, 2011 16:29:53 GMT -5
Nothing rocket science about it - 11 yrs x $25-35k retirement plan contributions/yr (about 25% of our gross salaries) - diversify beyond the stock market into cash flowing real estate. Planning to rinse, repeat twice more and retire at about 55. Inflation is our concern - will this that we've built be worth anything? Ok, but, again, as I stated in my post, it wouldn't ever happen on MY salary. I barely made 25-35K a year for the first 15 years of my career. I guess I just know a whole lot more "average worker bees" like myself, people who are social workers, probation officers, etc. This is OUR reality... I was just giving of an example of how this is possible. We've always maxed our Roths, even when we were 20 and it was using our student loan funds. We first maxed a 401k when my wife returned to work after taking a year off with our first child. Adding a $30k teacher's salary to my $38k-$42k salary made us feel pretty rich after adding a child and subtracting her salary a year before. My wife still hasn't been paid a salary greater than $35k. No we wouldn't have been able to have $250k+ in retirement savings on my salary alone during our late 20s/early 30s, but our reality isn't out of the realm of possibility, just different priorities than most people.
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sbcalimom
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Post by sbcalimom on May 1, 2011 16:49:06 GMT -5
I'm turning 30 tomorrow and I have about 22K between Roths and an old 401K. DH will be 30 this year and has 5.5K in a Roth. He's never had a real job since he's still a student but at least we have something for him. We can't afford to put aside a lot right now for either of us but we do some each month and try to add more at the end of the year when we can. I figure it is better than nothing at least. Hopefully we can do some major catching up in our 30s once DH finishes school and gets a real job.
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