NationStates Jolt Archive

I am not sure how it is in other countries but in the USA the media is claiming that Americans are not saving enough money for retirement. Are you saving enough for retirement? Do you have a retirement plan? Is retirement even one of your financial goals now? If you are not saving for retirement, why aren't you? Do we need to be able to contribute more tax defferred money to retirement funds? Less? Any thoughts?

I posted in the other thread, and you went and made a new one. For that, I will have my Siamese cat claw at your feet while you sleep.

Seriously, though, I have saved for retirement and, once my debts are paid down and I have all the other shit I need, I will start again with my company's 401k. But I doubt I will actually retire. No sir. I will work until I die like a good American. Even if it's mopping floors part-time at Wal-mart for $6.25 an hour (probably up to about...well, at the rate the minimum wage increases, about $6.25 an hour in 51 years, which will be worth about $1 an hour in today's money.)

I'm not going to be retiring for another 45 years. I think that retirement is the last thing on my mind right now.

I'm not going to be retiring for another 45 years. I think that retirement is the last thing on my mind right now.

In 45 years you could put away a nice little chunk of change. I'd start thinking about it now. I didn't and while we won't be out on the street, there's not quite as much money in the coffers as there might have been. It's just planning ahead (I say this through the miracle of 20/20 hindsight).

Not planing on living past 55 or sixty anyway.My lifestyle is too fucked up.

I'm not going to be retiring for another 45 years. I think that retirement is the last thing on my mind right now.

I appreciate that you are young and it is a long time away. Yet, this is precisely why it should be at the forefront of your thoughts.

If you get a 9% return on your money it will double every 8 years or so. This is because of compunded interest. A little bit of money now can create a lot of wealth in the future which means you will not have to save as much as you go through life.

If you wait until you only have 30 years until retirement you are missing out on 15 years of compunding interest.

since the retirement age will be approaching 90 by the time i come to that stage of my life, and i'll have been working for the best part of 60 or 70 years, i say its pretty far off the horizon.
i am saving, but not in a pension fund.
in this country so many pension companies have gone bust or have mismanaged funds (despite even a FTSE *tracker* making a profit last year, they still managed to lose my grandma 5 grand FFS on the stock market :rolleyes: ), it really seems like putting your money in a pension company is like giving a greedy executive the keys to nice new Jag and the bankruptcy department another job to worry about... and a big black hole for your money.
i say fuck pensions: save normally and invest in property (if only i had the resources to do that though)

I itemize my deductions (I am a US taxpayer btw). Do people that use the standard deduction also get to deduct IRA contributions?

I am not sure how it is in other countries but in the USA the media is claiming that Americans are not saving enough money for retirement. Are you saving enough for retirement? Do you have a retirement plan? Is retirement even one of your financial goals now? If you are not saving for retirement, why aren't you? Do we need to be able to contribute more tax defferred money to retirement funds? Less? Any thoughts?

25% of my income gets shoved into my 401(k). The remainder, what's left after bills goes in the bank. Out of sight out of mind.

since the retirement age will be approaching 90 by the time i come to that stage of my life, and i'll have been working for the best part of 60 or 70 years, i say its pretty far off the horizon.
i am saving, but not in a pension fund.
in this country so many pension companies have gone bust or have mismanaged funds (despite even a FTSE *tracker* making a profit last year, they still managed to lose my grandma 5 grand FFS on the stock market :rolleyes: ), it really seems like putting your money in a pension company is like giving a greedy executive the keys to nice new Jag and the bankruptcy department another job to worry about... and a big black hole for your money.
i say fuck pensions: save normally and invest in property (if only i had the resources to do that though)

It sounds like an REIT (Real Estate Investment Trust) is the right thing for you. This lets you invest as much money as you want into real estate without having to go and find partners to invest in real estate and be an active partner in a partnership.

I prefer finding partners because I think investing in real estate with friends is a nice social activity as well as lucrative because you do not pay any investment fees for someone to manage a real estate fund.

I'll never retire. Slaves have to be sold.:D

25% of my income gets shoved into my 401(k). The remainder, what's left after bills goes in the bank. Out of sight out of mind.

Congratulations Khadgar! You are doing a great job. I do not know how old you are but if you keeep doing this for a while before you retire you will be rich.

I hit 25% for a couple of years but then I bought a second home, got married to a lady with credit card debt, and fixed up my second home, and I am contributing maybe 5% this year but I will get back up to 20+% as soon as I can.

Well, I didn't even start working yet (Although I will this month), and I have already a life inssurance. And I will save more money if I get my first wages.

Put it this way, If I was saving for retirement already, I'd possibly be the most future-conscious 16 year old ever.

Put it this way, If I was saving for retirement already, I'd possibly be the most future-conscious 16 year old ever.

If you saved 8000 in an IRA by the time you were 20 you would be close to a millionaire at age 65 without paying any more money into any IRAs ever.

If you told you parents you were staring to save for retirement, they might think you are so mature and responsible that you will win major brownie points with them. They might even help you get started.

If you saved 8000 in an IRA by the time you were 20 you would be close to a millionaire at age 65 without paying any more money into any IRAs ever.

Who much money is a million in 50 years? ;)

But of course - you should start as early as possible for the maximum effect. But I doubt that you will have much money left, and you will have to pay for other things first, like university, your first appartment, etc, before you can really start saving a reasonable amount of money for retirement.

If you told you parents you were staring to save for retirement, they might think you are so mature and responsible that you will win major brownie points with them. They might even help you get started.

Or they see that they have missed saving money, so they have to cut his pocket money... ;)

Congratulations Khadgar! You are doing a great job. I do not know how old you are but if you keeep doing this for a while before you retire you will be rich.

I hit 25% for a couple of years but then I bought a second home, got married to a lady with credit card debt, and fixed up my second home, and I am contributing maybe 5% this year but I will get back up to 20+% as soon as I can.

I'm 26, just started the 401k this year, it's got 4k in there already, doubled last quarter.

I'm 26, just started the 401k this year, it's got 4k in there already, doubled last quarter.

Keep on going. Because I am 90% certain there will be no company pension or social security for you (and I as I am 29). It is totally up to you and it probably should be too. I would hate to rely on something as unreliable as government for something as important as my retirement.

Who much money is a million in 50 years? ;)

But of course - you should start as early as possible for the maximum effect. But I doubt that you will have much money left, and you will have to pay for other things first, like university, your first appartment, etc, before you can really start saving a reasonable amount of money for retirement.

About $190,000, according to the Rule of 70. Still a far cry better than $8,000.

Actually, if I recall correctly, the stock market doubles in value every 7 years, and inflation halves the value of a dollar every 20 years, assuming 3.5% inflation and 10% stock market gains annually. For argument's sake and because I'm too damn lazy, we'll say that the value of the stock market doubles three times in 20 years and the value of a dollar is halved once every 20 years.

Therefore, if you invest $1,000 now, in 40 years, it will be work $64,000. However, the dollar has been halved twice, so in real money, it's worth $16,000. A sizeable, albeit inflated, gain.

Therefore, as a rough estimate of how much money X dollars will be worth in N years if invested, I devise the following formula:

X*4^(N/20)

It's a rough estimate, but it gives the amount your money will be worth in today's dollars at relevant points in the future.

I'm 20 and in uni, I'm already happy if i make it through the month with the money i have.So, no saving up for retirement just yet...

I started saving while I was in the military, but since I'm now a student I'm using my "excess" cash to try to keep my debt to a minimum. When I graduate and get a proper job I'll start to save again.

About $190,000, according to the Rule of 70. Still a far cry better than $8,000.

Actually, if I recall correctly, the stock market doubles in value every 7 years, and inflation halves the value of a dollar every 20 years, assuming 3.5% inflation and 10% stock market gains annually. For argument's sake and because I'm too damn lazy, we'll say that the value of the stock market doubles three times in 20 years and the value of a dollar is halved once every 20 years.

Therefore, if you invest $1,000 now, in 40 years, it will be work $64,000. However, the dollar has been halved twice, so in real money, it's worth $16,000. A sizeable, albeit inflated, gain.

Therefore, as a rough estimate of how much money X dollars will be worth in N years if invested, I devise the following formula:

X*4^(N/20)

It's a rough estimate, but it gives the amount your money will be worth in today's dollars at relevant points in the future.

Yeah that is about right. Your formula makes my head spin as I am a formulaphobe who failed algebra in high school.

If things go the same way they have been and I don't have any major disasters (big IF) then I can retire when I am 38, and hubby about the same time.

Man I am impressed by how responsible most of us are! Many of you are either saving for retirement or have a pretty good excuse not for not saving such as being in school or paying down debts. From the way the media seems to be covering the issue of Americans as savers, it sounds like we all spend like drunken sailors with no thoughts about the future. Then again this is the same media that only reports the bad news in Iraq and distorts the views of many of us back home in a way that only shows the bad news.

Maybe we are not a representative sample of the Nation States community, but I would say that most of the people posting here so far seem to be pretty financially responsible folks.

I am not sure how it is in other countries but in the USA the media is claiming that Americans are not saving enough money for retirement. Are you saving enough for retirement? Do you have a retirement plan? Is retirement even one of your financial goals now? If you are not saving for retirement, why aren't you? Do we need to be able to contribute more tax defferred money to retirement funds? Less? Any thoughts?

I'm 16 and I don't have any income, so I'm not saving for retirement yet. I'm too busy with taking six college-level courses in high school right now to have the time for a job, and I don't need a job yet, anyway.

If things go the same way they have been and I don't have any major disasters (big IF) then I can retire when I am 38, and hubby about the same time.

Wow. Congratulations! I could not imagine being able to retire so soon. It would be wonderful. I hope you two are able to retire so young. I would be happy just to be debt free by age 38. Heck I would be thrilled to be debt free by age 38.

Do you want to let us know what brilliant retirement plan you hatched to lead you to such a bright and beautiful future?

Man I am impressed by how responsible most of us are! Many of you are either saving for retirement or have a pretty good excuse not for not saving such as being in school or paying down debts. From the way the media seems to be covering the issue of Americans as savers, it sounds like we all spend like drunken sailors with no thoughts about the future. Then again this is the same media that only reports the bad news in Iraq and distorts the views of many of us back home in a way that only shows the bad news.

Maybe we are not a representative sample of the Nation States community, but I would say that most of the people posting here so far seem to be pretty financially responsible folks.

I can tell you that we are not the norm, if my fainancial planning clients are any guage of what's typical, they come to me in major debt, I see people doing things that just irk me, like buying their groceries on credit so that they can have cash to pay credit cards that they paid their rent on, because they didn't have the money to pay that because they are paying a $400 car payment. :headbang:

I have to be nice though.....I can't be like "wow. aren't you stupid?"

Wow. Congratulations! I could not imagine being able to retire so soon. It would be wonderful. I hope you two are able to retire so young. I would be happy just to be debt free by age 38. Heck I would be thrilled to be debt free by age 38.

Do you want to let us know what brilliant retirement plan you hatched to lead you to such a bright and beautiful future?

we live on 40% of our income.

I have a 401k with max deduction allowed, a few drp stock accounts,a two inch stack of savings bonds and over 50% equity in the new house I bought.
Also, this house came with three times the property that other houses in teh area come with-its sub-dividable.
I figure in 30 years, even if I do nothing else, I'll be able to sell two lots for a decent amount, and either stay in this house, or sell it at huge profit and move somewhere much cheaper.
My emergency fund continues to grow slowly and steadily, my stocks all pay dividends better than bank interest and split from time to time.
I want to do more investing, but right now, I'm in decent shape.

Plus- I have very little debt aside from mortgage. We paid off all credit card debt when we sold last house and now we dont carry a balance-I only pay interest on my mortgage.
And as far as the mortgage goes, we consistanly make the payments earlier than the yare due and we always send more than the regular amount. One month, we doubled the payment. I am hoping to do that at least once a year and pay the mortgage off earlier, and save some interest.

I'm 16 and I don't have any income, so I'm not saving for retirement yet. I'm too busy with taking six college-level courses in high school right now to have the time for a job, and I don't need a job yet, anyway.

That is great. I just hope you are not missing out on the fun of having a summer job at least. I liked working after school (ie on school nights) but I loved working on summer breaks. The best thing is to work with friends or people your age who will become your friends. Plus you can save up some serious cash when you are still living with mom and dad because you have less expenses than when you are out on your own.

I was actually thinking about starting a CD now, when I'm young..

Do you know how much interest I would collect by the time I'm 40? :p

I have a 401k with max deduction allowed, a few drp stock accounts,a two inch stack of savings bonds and over 50% equity in the new house I bought.
Also, this house came with three times the property that other houses in teh area come with-its sub-dividable.
I figure in 30 years, even if I do nothing else, I'll be able to sell two lots for a decent amount, and either stay in this house, or sell it at huge profit and move somewhere much cheaper.
My emergency fund continues to grow slowly and steadily, my stocks all pay dividends better than bank interest and split from time to time.
I want to do more investing, but right now, I'm in decent shape.

I love DRPs! I also am a sucker for paying prepayments on the principal of mmy mortgage. My wife and I are starting to collect the receipts from the prepayments we make. Plus I look for high dividend stocks but I only buy them through my SEP IRA. In everyway we are pretty similar except I have to ask, why the savings bonds??? Savings bonds seem like the worst investment ever. They are not all that liquid. The interest is low. I just do not get it. Yeah they have gotten a little better lately but it sounds like you have been buying them over time since you have a nice stack of 'em.

Seriously, why do you like US Treasury bonds? Do not get me wrong, I like corporate bonds. I just do not understand why people want to buy savings bonds. I am not trying to insult you for liking them, I am just curious.

That is great. I just hope you are not missing out on the fun of having a summer job at least. I liked working after school (ie on school nights) but I loved working on summer breaks. The best thing is to work with friends or people your age who will become your friends. Plus you can save up some serious cash when you are still living with mom and dad because you have less expenses than when you are out on your own.

I didn't have a job last summer, aside from tutoring my friend once for $8 and helping my mother set up her classroom for 7 hours and getting paid $35. I also spend about three hours a week volunteering (tutoring a second grader). I'll probably either get a summer job or an internship next summer, though, (although I'll probably have even more summer homework next summer, as I'm going to take seven college-level courses as a senior).

I was actually thinking about starting a CD now, when I'm young..

Do you know how much interest I would collect by the time I'm 40? :p

There are free investment calculators you can play with on the internet. They are really easy to use. Bankrate.com has some but there are others out there too.

I didn't have a job last summer, aside from tutoring my friend once for $8 and helping my mother set up her classroom for 7 hours and getting paid $35. I also spend about three hours a week volunteering (tutoring a second grader). I'll probably either get a summer job or an internship next summer, though, (although I'll probably have even more summer homework next summer, as I'm going to take seven college-level courses as a senior).

There is nothing wrong with getting an education and everything right about it. Just do not work too hard. Are you doing this on top of or instead of your regular high school program? Don't burn yourself out. I remember being similar to you though but the guidance counselors hated me and would not let me take college classes. Instead I studied those AP classes in my spare time and took the tests on my own. It was fun but I still worked a full time job (which was probably illegal because of child labor laws).

There are free investment calculators you can play with on the internet. They are really easy to use. Bankrate.com has some but there are others out there too.

I love just plugging the numbers into the formulas for interest...although maybe that's because I just was studying them last week.

There is nothing wrong with getting an education and everything right about it. Just do not work too hard. Are you doing this on top of or instead of your regular high school program? Don't burn yourself out. I remember being similar to you though but the guidance counselors hated me and would not let me take college classes. Instead I studied those AP classes in my spare time and took the tests on my own. It was fun but I still worked a full time job (which was probably illegal because of child labor laws).

The honors classes just never challenged me. Five of my classes are AP, one is dual-enrollment, and then I have physics honors, as well. I love my classes right now, especially my science classes. History and English are still pretty easy now though, even though they are at the college level. Yes, I'm taking them at high school instead of taking "regular classes", although many people at my school take AP classes.

I'll probably get a job this summer. I need to start working on my people skills.

I know I asked this earlier but does anyone know if 401(k) deductions can be deducted by people who take a standard deduction? I bet that they are not deductions but I am not sure.

I put about 15% of my salary into 401(k) - that's all I can afford right now. The rest goes to practical things like rent, food, savings and paying off my damned student loans. In the future, however, I hope to be able to keep that 15% in my 401(k) and put an additional 10% into an IRA.

Put it this way, If I was saving for retirement already, I'd possibly be the most future-conscious 16 year old ever.
Meh, my boyfriend's parents opened an IRA for him when he was 12. *shrug*

I know I asked this earlier but does anyone know if 401(k) deductions can be deducted by people who take a standard deduction? I bet that they are not deductions but I am not sure.

working from US tax code (cuz that's all I know) there is no 401K deduction, only an IRA deduction for traditional IRA's, there is a retirement savings credit that you can get for putting money into your 401K (and also IRA's and SEP's) but you can't take it if you are a student, if you take student related deductions (tuition and fee's dedcution, lifetime learning credit) or if you make over a certain amount, sometimes even though you are eligible for the credit other credits wipe out your tax liability anyway so you wouldn't take it then.

working from US tax code (cuz that's all I know) there is no 401K deduction, only an IRA deduction for traditional IRA's, there is a retirement savings credit that you can get for putting money into your 401K (and also IRA's and SEP's) but you can't take it if you are a student, if you take student related deductions (tuition and fee's dedcution, lifetime learning credit) or if you make over a certain amount, sometimes even though you are eligible for the credit other credits wipe out your tax liability anyway so you wouldn't take it then.

Thanks I am still kinda confused though. I itemize. I have friends who take the standard deduction and they sometimes ask me for advice. I would love to be able to tell them that their 401(k) contributions are deductible if this is true.

I put about 15% of my salary into 401(k) - that's all I can afford right now. The rest goes to practical things like rent, food, savings and paying off my damned student loans. In the future, however, I hope to be able to keep that 15% in my 401(k) and put an additional 10% into an IRA.

15% is still pretty darn good if you are young. I heard that 10% is adequate. I like to put in more because I was in school so long I am trying to play catch up.

Thanks I am still kinda confused though. I itemize. I have friends who take the standard deduction and they sometimes ask me for advice. I would love to be able to tell them that their 401(k) contributions are deductible if this is true.

even if you itemize there isn't a deduction on the schedule A for your retirement contributions (or there wasn't last year, I haven't been to update class yet this year)

they can take a credit on form 8880 (http://www.irs.gov/newsroom/article/0,,id=107686,00.html) if they are qualified under the new rules.


If they fill out an 8863 though for sure they can't no matter how much money they contribute.

I will be on track, once I graduate college. I've got it pretty well planned out, so I should be okay on this front. Now, all I need to do is to start saving up for neuropreservation and I'm good to go.

15% is still pretty darn good if you are young. I heard that 10% is adequate. I like to put in more because I was in school so long I am trying to play catch up.
I'm 23. Hopefully I'll have paid off my undergrad loans within the next year, and then I'll be able to put aside substantially more for retirement; right now I'm sinking as much money as I can into paying off those loans.

Smunkeeville, Your ability to live on 40% of your net income is to be commended.

It got me thinking though about what actually constitutes saving and investing. Ok, if we pay a mortgage is that saving and investing? We are paying down a debt so it seems like it is. Is the answer different if it is a mortgage on a second home? An investment property? Is only the principal payment component of the mortgage payment a savings/investment ? Is the entire payment? Do only prepayments on principal count?

I'm 23. Hopefully I'll have paid off my undergrad loans within the next year, and then I'll be able to put aside substantially more for retirement; right now I'm sinking as much money as I can into paying off those loans.

See you in Millionairesville. I think you are doing fine. However, interest on your student loan is tax deductible (but I am no tax expert and it might not be in your situation) so maybe you would be better off saving in your 401(k) or in other investments.

A lot of college grads get all worked up over their student loans because they just are not used to being in debt and it seems like a lot of money. These interest rates are usually pretty low though. However, they have gone up lately. When I got out of school my Federal loans were consolidated at like 3% interest. I had a private student loan that was at 7.6% interest and I paid that one off ASAP. If your loans are at or under 6% interest I would not be in to big of a hurry to get rid of them. I would pay them off over a longer period of time and build up your credit score.

See you in Millionairesville. I think you are doing fine. However, interest on your student loan is tax deductible (but I am no tax expert and it might not be in your situation) so maybe you would be better off saving in your 401(k) or in other investments.
I plan on going back to school for at least three years, so there's going to be a good chunk of time where saving for retirement isn't going to be feasible. That's why I'm doing as much as I can right now. Like you, I'm playing catchup - I'm just doing it pre-emptively. :p

Smunkeeville, Your ability to live on 40% of your net income is to be commended.

It got me thinking though about what actually constitutes saving and investing. Ok, if we pay a mortgage is that saving and investing? We are paying down a debt so it seems like it is. Is the answer different if it is a mortgage on a second home? An investment property? Is only the principal payment component of the mortgage payment a savings/investment ? Is the entire payment? Do only prepayments on principal count?

we actually don't have any debt, we will soon, when we buy a house, but we will pay it off in 15 years (probably sooner than that) and we can afford it on our current budget, so we will still be able to put a lot back.