401k Numbers

[Anonymous]

I'm 35 and only began contributing towards my 401k in the last 5 years. Stupid I know, I was just never educated about it. Anyway, I have $20k now in an annuity and my husband probably has close to the same.

To retire at 65 ish... What should I be contributing annually to live? Someone told me they knew of an elderly couple that lived off $50k a year and thought that was the bottom of the barrel.... $100k a year seems crazy to means unattainable. Our HHI is $185k. Our kids college is paid for by my family.

[Anonymous]

If you're 35 you have another 25-30 working years ahead of you. Stop putting your retirement money into an annuity, you should be looking for the lowest-cost, broadest index fund on offer through your 401k. Put in as much as you can, but at least 10% of your income. You'll be better off than 85% of retirees at that rate, no need to feel badly about it now.

[Anonymous]

Anonymous wrote:I'm 35 and only began contributing towards my 401k in the last 5 years. Stupid I know, I was just never educated about it. Anyway, I have $20k now in an annuity and my husband probably has close to the same.

To retire at 65 ish... What should I be contributing annually to live? Someone told me they knew of an elderly couple that lived off $50k a year and thought that was the bottom of the barrel.... $100k a year seems crazy to means unattainable. Our HHI is $185k. Our kids college is paid for by my family.

You don't realize how lucky you are... Most people can't say that. You should be contributing max you can. Do not miss out employer's matching contribution if you have one.

[Anonymous]

Anonymous wrote:I'm 35 and only began contributing towards my 401k in the last 5 years. Stupid I know, I was just never educated about it. Anyway, I have $20k now in an annuity and my husband probably has close to the same.

To retire at 65 ish... What should I be contributing annually to live? Someone told me they knew of an elderly couple that lived off $50k a year and thought that was the bottom of the barrel.... $100k a year seems crazy to means unattainable. Our HHI is $185k. Our kids college is paid for by my family.

Save as if you have to pay (not neccessarily in an education fund but somewhere). I know several families who were in this situation but when it came time for the kids to go to college there was not enough money. If it ends up being fine, then you have extra money.

[Anonymous]

No time like the present. Start saving. An old wise saying is, "the best time to start saving is yesterday; the second best time is today."

First, your savings of ~$8k per year combined is not going to cut it. At your spending level (approximately $110k per year after taxes), you'll need much more money in retirement. You need to double that. At least.

Second, I agree with the above poster -- you shouldn't be investing in annuities. They can sometimes be an okay deal, but usually they aren't. And what you really need at your age and time horizon is growth. The best vehicle for growth is diversified equities/stocks. An index fund (with low fees) as suggested by the PP is a fine choice.

Third, figure out where you are spending all of your money. Where can you make cuts? Retirement savings is important, so don't let that go ignored in the name of unnecessary luxuries and discretionary expenses. My guess is you have a lot of them.

Fourth, every time you get a raise, bonus, or unexpected money pay yourself first. Put it in the piggy bank. Save it up. You can't just spend everything you earn and expect to be able to retire.

It's really not rocket science. It's simple. Not easy, but simple.

[Anonymous]

You should be maxing it out each year before anything else.

[Anonymous]

you need to read the entire J.L. Collins "Stock Series" online. All 30 articles, or whatever it is.

Start it tonight. It's free. (and everyone is correct about low cost index funds, but you need to better understand what you're buying, and why).

http://jlcollinsnh.com/stock-series/

[Anonymous]

Anonymous wrote:you need to read the entire J.L. Collins "Stock Series" online. All 30 articles, or whatever it is.

Start it tonight. It's free. (and everyone is correct about low cost index funds, but you need to better understand what you're buying, and why).

http://jlcollinsnh.com/stock-series/

I'm one of the PPs (16:01), and I strongly agree with the endorsement of the JL Collins stock series.

[Anonymous]

This is really helpful!! I've been trying to be really mindful about our expenses and I know there are places we can cut . We only have one car payment but it's big at $650, our mortgage is only $2k, we don't have credit card debt but $4k a month in childcare and the rest goes towards my transportation (metro $250 a month) then food. We do get dinner out on occasion but aren't living extravagant. I definitely could be better about dropping my morning coffees!!

[Anonymous]

Anonymous wrote:This is really helpful!! I've been trying to be really mindful about our expenses and I know there are places we can cut . We only have one car payment but it's big at $650, our mortgage is only $2k, we don't have credit card debt but $4k a month in childcare and the rest goes towards my transportation (metro $250 a month) then food. We do get dinner out on occasion but aren't living extravagant. I definitely could be better about dropping my morning coffees!!

the key, in your situation, is to pre-load your savings. Make sure it's deducted off the top, automatically, every pay period. probably into your 401(k) or TSP. Make it as high as you can stand it, and then, if applicable, set it so that next year's raise goes there as well.

Once you do that, you don't have to worry abou tthings like morning coffees. You'll adjust because you'll have to.

[Anonymous]

Is your 401k money going into an annuity inside the 401k?

[Anonymous]

I think so? It says it's a group variable annuity. I feel ridiculous not knowing.

[Anonymous]

Anonymous wrote:I think so? It says it's a group variable annuity. I feel ridiculous not knowing.

Check your investment options. You should be investing in mutual funds of stocks. You are young and have a long time before retirement. Your investments should be focused on growth.