Behind on retirement savings

[Anonymous]

This is OP. Thanks for all your positive responses. I will ramp it up! Glad the ship hasn't already sailed.

[Anonymous]

Anonymous wrote:This is OP. Thanks for all your positive responses. I will ramp it up! Glad the ship hasn't already sailed.

Take advantage of all the catch-up opportunities at age 50 too.

[Anonymous]

Anonymous wrote:I am in mid 40s and have less than $150K in 401K after working for 20 years. I was in contractual roles for a while and hence 401K wasn't an option from the employers. But even otherwise, I was not wise enough to evaluate alternatives for retirement savings. When 401K was an option, I tried to contribute as much as I could. More than half of my career life is over and I realize I was quite dumb. What are my options going forward? Currently I am making 10% contributions toward 401K and employer doesn't match.
Fwiw, spouse is better than me but not great. We have 2 elementary school level kids.
Thumb rule says by mid 40s, one should have thrice as much as their salary in retirement savings and I panicked when I got to know about it.

I had about 100k in my mid-30s (12 years ago). I took a break to go to school after starting my first career, started a new career, and couldn’t afford to save for years. Started back up in earnest 12 years ago after an “oh sh*t” moment and now have just under a million in that same account. You can do it! I bet you could find a job with a match. I maxed my contributions and have a generous match through work.

[Anonymous]

Anonymous wrote:
Thumb rule says by mid 40s, one should have thrice as much as their salary in retirement savings and I panicked when I got to know about it.

The good news is that you don't really need to base your retirement goal as a multiple of your salary - figure it as a multiple of your living expense.

So the more you reduce the cost of living now, by sending more money off to retirement savings, the less money you actually need to save up.

(That's how all the FIRE/early retirement folks are managing to retire early - they cut their living expenses down to nothing, so what they have saved easily covers their needs.)

https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement

[Anonymous]

Anonymous wrote:

https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement

The most important thing to note is that cutting your spending rate is much more powerful than increasing your income. The reason is that every permanent drop in your spending has a double effect:

• it increases the amount of money you have left over to save each month
• and it permanently decreases the amount you’ll need every month for the rest of your life.

So your lifetime passive income goes up due to having a larger investment nest egg, and it more easily meets your needs, because you’ve developed more skill at living efficiently and thus you need less.

If want to retire within 10 years, the formula is right there in front of you – simply live on 35% of your take-home pay**, which is approximately what I did without even realizing it during my own younger years.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I am in mid 40s and have less than $150K in 401K after working for 20 years. I was in contractual roles for a while and hence 401K wasn't an option from the employers. But even otherwise, I was not wise enough to evaluate alternatives for retirement savings. When 401K was an option, I tried to contribute as much as I could. More than half of my career life is over and I realize I was quite dumb. What are my options going forward? Currently I am making 10% contributions toward 401K and employer doesn't match.
Fwiw, spouse is better than me but not great. We have 2 elementary school level kids.
Thumb rule says by mid 40s, one should have thrice as much as their salary in retirement savings and I panicked when I got to know about it.

Seriously? Save more.

Seriously?

[Anonymous]

Just wanted to thank you for your honesty. So many DCUM posts are “I only have $2.5 million saved and I just turned 38. Freaking out!” I am in your boat and am maxing out 401k to catch up.

[Anonymous]

My inlaws were in a similar boat. They did not really start saving until my BIL left for college and my MIL went back to work full time. They were able to retire at 65 and have a pretty solid nest egg. Nothing extravagant, but enough to live comfortably. It can be done.

[Anonymous]

Anonymous wrote:Just wanted to thank you for your honesty. So many DCUM posts are “I only have $2.5 million saved and I just turned 38. Freaking out!” I am in your boat and am maxing out 401k to catch up.

I hate these posts. They are the reason for the other thread about out of touch rich people posting in the forum.