But what if that Latte gave you just the pick-me-up you needed to make a super excellent point during a meeting, catch the attention of the boss, and put you in line for a raise?? That $4 would have actually made you money

Anonymous wrote:And how does the rule of 72 apply to purchases?

If you would have saved the money instead, then you can easily estimate that at say 6% interest that Starbucks coffee would have netted you $30 or whatever.

Opportunity cost.

do what you can to save enough to get the company match, and up it when you get raises and such.

We didn't start really trying to live by "the guidelines" until we were almost 30, and we started socking away the 10-15% into retirement savings at that point...right when the market took a nose dive. We still managed to hit 1X+ salary by 35 (this year).

Now, we probably save at the expense of fun (we hardly ever feel like we have extra cash for vacations and such), so there is that. But I at least feel like we accomplished something here.

Seriously, the big thing is just to start doing it. It doesn't matter if it is small at first - just do it.

I am 29 and my parents did not know a thing about retirement savings and financial planning. At 19/20, I had a coworker who pleaded with me to start saving for retirement now because of how far ahead I would be, but I felt like retirement was so far away that I'd already be a millionaire by then (after all, I had PLENTY of time to figure it out lol). Around 23, his advice started to sink in and I began with $50 a month on 28K a year.

I used to beat myself up for not starting when he first told me and I had more disposable income (was living at home), but I realized that it's far more important to just start somewhere and to stick with it. My salary is shy of 70K and cant afford to max just yet, but I save 10% at work (plus match) and about $2500/year in a Roth IRA. When I turn 30 this summer, I'm going up to 15% at work.

I have friends who have big maxxing for years and others who don't contribute anything at all. I'd suggest not comparing yourself to others, esp DCUMers with 10-20 years more to save and collect salary increases and promotions. As a PP said, save as much as you can when you can and you will be fine.

And how does the rule of 72 apply to purchases?

Anonymous wrote:I am 28 and am literally JUST now starting to save for retirement. I can not wrap my head around the fact that I wasn't privy to all the seemingly apparent suggestions for saving as soon as you can.
It is killing me seeing those charts where if you started saving at age 18, compound interest, etc-- you'd have hundreds of thousands of dollars. How did I not know this? How did my parents (who are otherwise amazing, smart people) not spend even an hour discussing these things with me? Or a teacher? Anyone? Bueller?

Sigh...... anyways, am I screwed? I am just starting my first "real" job and making around $40k. I have lots of bills at the moment but believe I can put away 10% into my newly available 401k- employer will match 3%, so if I can contribute 7%, I'll be putting away 10%-- 7% is a stretch for me financially but I will make it work.

10% is great. If you can do it, go for it. I find it useful to use the rule of 72 when thinking about purchases. If something costs $5, ask yourself if you'd pay $15 for it. If so, buy it. If not dont. The beauty of that is it'll get "cheaper" both as you age and as your income goes up...But here's the real secret: don't let your lifestyle keep pace with your income. When you get a raise, pretend you didn't. That's hard when you make $40k a year, but a little easier at $60k, and a lot easier at $100k.

It is killing me seeing those charts where if you started saving at age 18, compound interest, etc-- you'd have hundreds of thousands of dollars. How did I not know this? How did my parents (who are otherwise amazing, smart people) not spend even an hour discussing these things with me? Or a teacher? Anyone? Bueller?

Hey, you know now! And you're still ahead of the game compared to some folks. You just do the best you can with what you have -- it sounds like you didn't have that much money to put away towards retirement until now anyway, so you're on the right path.

But I agree that financial literacy is just as important as other things parents can share with their children.

Anonymous wrote:I am 28 and am literally JUST now starting to save for retirement. I can not wrap my head around the fact that I wasn't privy to all the seemingly apparent suggestions for saving as soon as you can.
It is killing me seeing those charts where if you started saving at age 18, compound interest, etc-- you'd have hundreds of thousands of dollars. How did I not know this? How did my parents (who are otherwise amazing, smart people) not spend even an hour discussing these things with me? Or a teacher? Anyone? Bueller?

Sigh...... anyways, am I screwed? I am just starting my first "real" job and making around $40k. I have lots of bills at the moment but believe I can put away 10% into my newly available 401k- employer will match 3%, so if I can contribute 7%, I'll be putting away 10%-- 7% is a stretch for me financially but I will make it work.

+1

This seems just as important as educating your kids about sex, and so much less awkward. I won't make the same mistake with my kids.

For younger savers with income growth potential, just get in the habit of regular savings and living beneath your means. And when you get raises, allocate a good amount of the raise amount (50%) to savings. Then when you are 40, and earning $120,000, you will be living on $60k, putting $30k away, and will be able to retire comfortably (so long as you can live on $60k comfortably).

If you are likely to earn $40k the rest of your life, just try to save about 10-15 percent a year, and you should be okay. But you'll never be considered rich in the DC area.

"that the S&P five hundred is flat over the past ten years"

What? The S&P return over the past 10 years is 70 percent. Bumpy ride. Not at all flat.

So far for 2013 it's up nearly 7 percent.

http://finance.yahoo.com/echarts?s=%5EGSPC+Interactive#symbol=^gspc;range=20030428,20130422;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

It is killing me seeing those charts where if you started saving at age 18, compound interest, etc-- you'd have hundreds of thousands of dollars. How did I not know this? How did my parents (who are otherwise amazing, smart people) not spend even an hour discussing these things with me? Or a teacher? Anyone? Bueller?

Relax, OP. You've got 40 years yet, you'll be fine. And none of the "early savings charts" I've ever seen recognize the zero interest rate environment we're in now, or that the S&P five hundred is flat over the past ten years.

Anonymous wrote:

Anonymous wrote:I am 28 and am literally JUST now starting to save for retirement. I can not wrap my head around the fact that I wasn't privy to all the seemingly apparent suggestions for saving as soon as you can.
It is killing me seeing those charts where if you started saving at age 18, compound interest, etc-- you'd have hundreds of thousands of dollars. How did I not know this? How did my parents (who are otherwise amazing, smart people) not spend even an hour discussing these things with me? Or a teacher? Anyone? Bueller?

Sigh...... anyways, am I screwed? I am just starting my first "real" job and making around $40k. I have lots of bills at the moment but believe I can put away 10% into my newly available 401k- employer will match 3%, so if I can contribute 7%, I'll be putting away 10%-- 7% is a stretch for me financially but I will make it work.

You'll be better off than the large majority of people, plus you've got a lot of time.

+1. Try to contribute the maximum up to the match. Put away any bonuses or tax refunds. The important thing is you have realized the need to do this while you are young enough.

Anonymous wrote:I am 28 and am literally JUST now starting to save for retirement. I can not wrap my head around the fact that I wasn't privy to all the seemingly apparent suggestions for saving as soon as you can.
It is killing me seeing those charts where if you started saving at age 18, compound interest, etc-- you'd have hundreds of thousands of dollars. How did I not know this? How did my parents (who are otherwise amazing, smart people) not spend even an hour discussing these things with me? Or a teacher? Anyone? Bueller?

Sigh...... anyways, am I screwed? I am just starting my first "real" job and making around $40k. I have lots of bills at the moment but believe I can put away 10% into my newly available 401k- employer will match 3%, so if I can contribute 7%, I'll be putting away 10%-- 7% is a stretch for me financially but I will make it work.

You'll be better off than the large majority of people, plus you've got a lot of time.

Anonymous wrote:You are supposed to have 1x salary in retirement savings by age 30 and 2x by age 35 to be on track

Fidelity's recommendation is 1x salary by age 35, 3x salary by age 45, and 5x salary by age 55. Some of that growth should be from interest on the investments, so you don't have to save 20% of your salary between ages 35 and 45 to make it work.

I am 28 and am literally JUST now starting to save for retirement. I can not wrap my head around the fact that I wasn't privy to all the seemingly apparent suggestions for saving as soon as you can.
It is killing me seeing those charts where if you started saving at age 18, compound interest, etc-- you'd have hundreds of thousands of dollars. How did I not know this? How did my parents (who are otherwise amazing, smart people) not spend even an hour discussing these things with me? Or a teacher? Anyone? Bueller?

Sigh...... anyways, am I screwed? I am just starting my first "real" job and making around $40k. I have lots of bills at the moment but believe I can put away 10% into my newly available 401k- employer will match 3%, so if I can contribute 7%, I'll be putting away 10%-- 7% is a stretch for me financially but I will make it work.