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How Much Should You Save Each Year?
wallstreetfighter.com — The 'Million Dollar Question': what should you be doing now when you're young to make sure you can live in style when you stop working?
MrBabyMan- 765 diggs
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- rlray216, on 05/17/2008, -4/+29Read The Millionaire Next Door and The Millionaire Mind for more specific answers to the question of how much to spend each year. More importantly, you'll learn what real millionaires actually think like.
- kaleesh, on 05/17/2008, -3/+1The one-minute millionaire too.
- hungarianhc, on 05/17/2008, -0/+3Thanks, Dave Ramsey :-)
- Nation, on 05/17/2008, -0/+1Robert Kiyosaki also recomend Dr. Stanley's work in Cashflow Quadrant, as I am sure many other people do in their writings, or at least have been influenced by his research.
- SanTe, on 05/17/2008, -1/+2I would take Robert Kiyosaki with several grains of salt:
http://www.johntreed.com/Kiyosaki.html
- SanTe, on 05/17/2008, -1/+2I would take Robert Kiyosaki with several grains of salt:
- Nation, on 05/17/2008, -0/+1Robert Kiyosaki also recomend Dr. Stanley's work in Cashflow Quadrant, as I am sure many other people do in their writings, or at least have been influenced by his research.
- franklymister, on 05/17/2008, -1/+1"Real" millionaires? So only certain types of people with a net worth of 1M+ count as "real?"
The Millionaire Next Door is one interesting way to think about money, but it's not the only one. That book basically advocates living like a miser, not enjoying any of the money you have now, and waiting until you're old and tired to actually reap any rewards.
I'm not advocating an MC Hammer lifestyle, just saying that "real" people need more balance sometimes.- Nation, on 05/17/2008, -1/+2you should go read it again, it is not advocating what you are saying it is stating how most millionaires made their millions.
- reddikilowatt, on 05/18/2008, -0/+1Unfortunately, most people in the US don't have any concept of compound interest. Sadly, the banks decided to take the easy path and use loans as assets, making CDs just about worthless. Hopefully the current credit mess will encourage banks to be a little more responsible, but as long as Bernanke is bailing them out, I think there's not much hope.
Maybe it's time to take a second look at the credit union...
- Tomboys, on 05/17/2008, -0/+27Man am I in trouble.
- domfosnz, on 05/17/2008, -0/+1I think lots of people are in trouble.
- spuz, on 05/17/2008, -0/+0So that makes it ok
- MikeSD34, on 05/17/2008, -0/+9I'm not, I plan on dying young from some unseen disease. Probably cancer, or thermonuclear war, whatever.
- expatcatalyst, on 05/17/2008, -0/+4It's really not that big of a mystery, but discipline is the key. From HS on, save 10% of all you earn until that gets big enough to place into a Vanguard Index Fund. Keep doing that until your 40 to 50 and game over! Like I said, discipline is the key.
- MiddleOfNowhere, on 05/17/2008, -0/+1"Man am I in trouble."
Are you? :)
Frankly, I find the responses in this thread more interesting than the original article.
The implication often seems to be that work (especially employment) is some kind of hell, and your life and financial strategies should be centered on ending it "on time" (around 60 for most people), so you can spend the remaining years spending your money. Never mind that many old people seem to become depressed and lose touch with the world once they stop working ...
It seems that this, well, *ideology* has grown with the parallel success of industrial capitalism and the social/financial systems established around it.
Now I may sound like a hippie, but one day I found that this "squirreling" model, as someone else here called it (= work your ass off for the winter of your life) is not the way I want to live.
Actually, I expect to work for the rest of my life.
One reason for this is I enjoy it. I also feel that as long as my work is challenging, it keeps me from becoming grumpy, cynical, bored etc. (but then, YMMV). And finally, I do not wish to spend a considerable amount of my time to feed a future self. I expect the guy I'll be in twenty years to take care of himself the same way I am doing it now (Well, I can help out to a certain extent, but within reasonable limits. :)
I need a certain amount of money to cover all costs of the services I am using (rent, public transport, electricity etc.), for medical insurance (expensive, but absolutely necessary) and for replacing the things I own (a new computer every three years or so etc.). Once I have earned that, I will often call it a day and enjoy the rest of the day/week/month instead of "squirreling". By "enjoy" I mean things that are fun and interesting, but do not cost ridiculous amounts of money. Think books, music, games, cinema. Having no car (I live in a big city with good public transportation) or spoiled GF also helps. :)
OTOH, if an interesting job comes up, I will do it and save the money. But I am not a slave of the future, which I only control to a very moderate degree (inflation/war/plagues, anyone?).
And I think this is a good life.
Disclosure: I have a (tech) job, which I really enjoy, and I have no-one who financially depends on me. Your mileage may vary.
- domfosnz, on 05/17/2008, -0/+1I think lots of people are in trouble.
- stdalton, on 05/17/2008, -1/+20Saving 10% is a little out of my range right now. But it's a nice goal to shoot for I guess. Gotta cut back on all those trips to the strip club.
- wynja, on 05/17/2008, -5/+3***** that, with inflation of food and energy at 20%ish this year, that 10% you saved is like flushing money down the toilet.
- gypsi, on 05/17/2008, -4/+1not if you bought gold with it (for example)
- jmpeagle, on 05/17/2008, -1/+5they don't say keep it in a savings account. Equities, bonds etc...are much better than keeping it as cash .
- nickymouse, on 05/17/2008, -1/+4You need to move your money from the jar on top of the fridge to a CD, Stock, savings, bond, or commodity (I heard oil is big). Please note that if you bury the jar in the back yard, that's NOT long term savings plan.
- yaddayaddayoda, on 05/17/2008, -0/+1I like the strip club idea better.
- megaton, on 05/17/2008, -2/+410% is too much for you? Do you work at a gas station?
Educate yourself, OR hook yourself up. But you're not going to get anywhere where you are now...- kevinmotel, on 05/17/2008, -2/+1i recommend selling drugs out of the gas station
- Sasquatcho, on 05/17/2008, -0/+1I would agree with that. 8-10% is really a good goal. 8% is more realistic.. that worked for me till I had to cut back to 5% as I just wasn't taking enough home. (car broke down, etc.)
Pre-tax is key (ROTH) if it is an option. The sooner the better.- Envark, on 05/17/2008, -0/+1You contribute after-tax funds to a Roth.
However, they don't tax your gains inside of the Roth.
- Envark, on 05/17/2008, -0/+1You contribute after-tax funds to a Roth.
- carguy84, on 05/17/2008, -0/+1"Gotta cut back on all those trips to the strip club."
Or start charging more for your lap dances... - reddikilowatt, on 05/18/2008, -0/+1If your employer has an employee stock purchase plan, take advantage of it. The money comes right out of your paycheck, and they usually match or give you a discount. For example, I put 10% into the ESPP. They sell stock to me quarterly at a 15% discount FROM THE LOWEST PRICE for the quarter. Last quarter I sold the stock for a 30% return.
It is not advisable to keep the stock as a long term investment, since if the company goes to hell, you may get laid off and have nothing in savings. Diversify!
- wynja, on 05/17/2008, -5/+3***** that, with inflation of food and energy at 20%ish this year, that 10% you saved is like flushing money down the toilet.
- h0ser, on 05/17/2008, -17/+13retirement is a scam made up by banks so they can profit off your savings. If everyone did what they loved for life, and not worry about retirement, the world would be a much happier place.
- Y0tsuya, on 05/17/2008, -5/+3Same here. I plan to work till I drop. I can't imagine being idle. Probably get alzheimer's from lack of brain activity.
- digjam, on 05/17/2008, -3/+2Well you save for the rainy day...not for retirement...assuming you are 25 right now....you start saving now to save for ur kids educations,medical exps etc ....not just the retirement....its kids like you thats screwing up the american youth.
- Y0tsuya, on 05/17/2008, -2/+2Who says I'm a kid, and who says I don't save? I just don't worry about retiring since I plan to keep on working.
- digjam, on 05/17/2008, -0/+5someday you wont be physically and mentally fit enough to work.....thats when ppl "retire"
- Y0tsuya, on 05/17/2008, -0/+1That's when my savings come into play. What's wrong with what I've been saying?
- JackHarkness, on 05/17/2008, -0/+2/sarc ?
- digjam, on 05/17/2008, -3/+2Well you save for the rainy day...not for retirement...assuming you are 25 right now....you start saving now to save for ur kids educations,medical exps etc ....not just the retirement....its kids like you thats screwing up the american youth.
- Callsorputs, on 05/17/2008, -1/+8Money is only a problem if you don't have enough.
- megaton, on 05/17/2008, -2/+18Retirement is a "scam"??
You're either 16, or you have no concept of economy, man's will-to-work, or the way the government works.
Do you think you'll be up for 8 hour days when you're 67? - ValleyWorker, on 05/17/2008, -0/+1er...i am in 40% tax bracket and i still can't save more than 10% even i am single with no child.. housing price in the valley plus $1000/mo car payment are bitches.
- nickymouse, on 05/17/2008, -0/+6I think you need to sell your $50,000 for a $15,000. That's a start.
- booted, on 05/17/2008, -0/+3I used to do the $800/mon car payment and figured it was the biggest waste of my money. It's fun for the 1st year or so driving the fancy car but I find it more practical to max out my 401k, contribute to company ESPP, take vacations, and enjoy living debt free.
- BlueCadenza, on 05/17/2008, -0/+4If your $1000/month car payment is a "bitch" then you can't afford it. Plain and simple. You're living beyond your means.
If you're barely affected by the payments and you shrug them off when the bill comes as just another expense then you're in the clear. People seem to forget that a car is just one expense out of many. I know people that pay more monthly for their car then their housing. It makes very little sense since it detracts from your yearly savings. - ValleyWorker, on 06/01/2008, -0/+0guys you are absolutely right...except i am just not willing to drive even a lexus or infiniti...they can save me a few hundred dollars a month, but every other car is a IS or G sedan in south bay. i guess i am young and there will come a time when a light bulb comes up and i learn to appreciate a simple honda accord.
- BECoole, on 05/17/2008, -0/+2In a perfect world, yes. But most of the world has jobs that are four-letter words: W O R K.
and what if your health doesn't hold up? Plan for the worst and hope for the best!
- Y0tsuya, on 05/17/2008, -5/+3Same here. I plan to work till I drop. I can't imagine being idle. Probably get alzheimer's from lack of brain activity.
- mclev, on 05/17/2008, -4/+8"The 'Million Dollar Question': what should you be doing now when you're young to make sure you can live in style when you stop working?"
That is, unless you die. Screw you guys, I'm living for today. - dupswapdrop, on 05/17/2008, -5/+22Save what? I don't have any money in my wallet after the gas bandits get done with me.
- gypsi, on 05/17/2008, -7/+2vote them out of office then
- Y0tsuya, on 05/17/2008, -2/+6How do you vote China and India out of office?
- Envark, on 05/17/2008, -1/+0I see what you did there...and I like it!
- linagee, on 05/17/2008, -1/+1Vote with your dollars.
- Ebeach, on 05/17/2008, -1/+2You can't "vote someone out of office." You can only vote for the other candidate. What do you do when both candidates receive contributions from the energy sector? (or really any sector don't like)
- MWeather, on 05/17/2008, -0/+2You vote for the third candidate.
- kevinmotel, on 05/17/2008, -0/+1go ahead. throw your vote away. mwahahahaha!
- MWeather, on 05/17/2008, -0/+2'Always vote for principle, though you may vote alone, and you may cherish the sweetest reflection that your vote is never lost.” - John Quincy Adams.
- Y0tsuya, on 05/17/2008, -2/+6How do you vote China and India out of office?
- gypsi, on 05/17/2008, -7/+2vote them out of office then
- HaloZero, on 05/17/2008, -5/+22They forgot to mention one thing. No kids, that is the only way you can save 10-15% of your income.
- ScottMitchell, on 05/17/2008, -3/+13Your statement is only true if you spend too much or earn too little. Despite what you may think, it is possible for a family with a single, median income with kids to still save 10% per annum. It might mean Junior is wearing clothes from WalMart and it might mean that if he wants a car he's gonna have to get a job and buy one himself, but it is possible.
- cdigioia, on 05/17/2008, -0/+7"No kids, that is the only way you can save 10-15% of your income."
Funny how that works out considering the wide range of incomes people have in the US.
So both a person making 40,000/year, and 70,000/year are equally unable of saving 10-15%? That's the wrong thinking people have, however much they make, they have to spend it all. The person making 40,000/year manages to get by, so why can't a person making 70,000/year get by with the same expenditures and save a ton?
Just cut your own salary down 10% & live on the remainder, it's not that hard... - YummyCupcakes, on 05/17/2008, -1/+2Damn, that's 100% the truth. Any financial planning adviser worth a crap SHOULD be stating that without hesitation.
Having kids today is nothing more than an expensive hobby with zero return on investment, like enjoying sky-diving, scuba, or snow-skiing in the Rockies. If you really enjoy the experience and have the money to burn, fine, good spend the cash. But realize that you will have to downsize your lifestyle in other areas by a margin just so you can pay to have that experience.
- dantidote, on 05/17/2008, -1/+7You also might want to try and figure out how long you have to live. If you plan on dying very soon, maybe retirement isn't for you?
Sounds like a plan. - CDoug03, on 05/17/2008, -2/+10How much should you go in debt each year? Cause I sure ain't paying when I'm dead.
- TecK415, on 05/17/2008, -3/+2Your family will... No big deal.
- ScottMitchell, on 05/17/2008, -0/+6No they won't. Your family is not liable for your debts, just like you aren't liable for their's. You are only liable for a debt if you sign for it or, in some states, if you are married to the person who accrued the debt.
- digjam, on 05/17/2008, -1/+4Basically live one paycheck behind.
- linagee, on 05/17/2008, -0/+1One paycheck or one pay-year?
- TecK415, on 05/17/2008, -3/+2Your family will... No big deal.
- STPZ, on 05/17/2008, -0/+11I should get a job!?
- Chuckanut, on 05/17/2008, -2/+1Yes, grandma. Now grab your walker, hobble down to Walmart and get to greetin'. I ain't paying your premiums or prescriptions. Time for you to earn. You're not earning; you're not part of the problem.
- TecK415, on 05/17/2008, -3/+5With gas+food+school+beer+Insurance+chicks+apartment= No ***** money left.
- Y0tsuya, on 05/17/2008, -0/+3Two of those items are discretionary spending.
- skidooer, on 05/17/2008, -0/+2Sure, but one gets quite hungry when they eliminate spending on food.
- linagee, on 05/17/2008, -0/+1apartment
- lianculta, on 05/17/2008, -0/+1Car payments for some of us as well.
- BlueCadenza, on 05/17/2008, -1/+2You're a pathetic idiot if your spending money on women. If your doing it right you don't have to.
- Y0tsuya, on 05/17/2008, -0/+3Two of those items are discretionary spending.
- idavidcrockett, on 05/17/2008, -0/+2green text with two lines underneath = retirement savings
- xman00, on 05/17/2008, -0/+23The easy way to do it :
- The only things you get on credit are a car, a house, and a student loan (make sure the car is very affordable)
- Put 20% of your income into a 401k or Roth IRA - do that for 30 years and you will have enough to retire at a similar salary.
- Live on what you make. Most people fail this last one.- nienhulm, on 05/17/2008, -0/+7"Live on what you make"
THIS. - bman1984, on 05/17/2008, -0/+10About 15 years in, buy a rental property. Then you still have your money, the rental property asset, plus monthly income from renters. Even if real estate prices drop, as they have proven they can do, you will more than make up for it with the rental income. Real estate is how most people who actually have to work for a living are able to be millionaires at some point.
- Y0tsuya, on 05/17/2008, -0/+8Buy a rental property with POSITIVE cash flow. It's something most retard "investors" who bought recently forgot about.
- adrenaline33, on 05/17/2008, -0/+1Even if the cash flow is stagnant, you are still building equity for free. Depending on how financially secure you are, losing 200 a month after payment, property tax, insurance isn't going to bust your balls to hard. But as a general rule, yes.
- bman1984, on 05/17/2008, -4/+4I thought housing prices always went up??
- bman1984, on 05/17/2008, -2/+2wow, apparently I need to actually add a /sarcasm tag
- trdrstv, on 05/17/2008, -0/+0Real Estate is a very apparent one, but the basic tric is to have your money make more money for you passively (IE while you sleep). You won't get rich punching a clock and putting it under a matress, you need to invest it in something (Real Estate, funds, a personal business etc...) so it works for you.
- Y0tsuya, on 05/17/2008, -0/+8Buy a rental property with POSITIVE cash flow. It's something most retard "investors" who bought recently forgot about.
- eryximachus, on 05/17/2008, -0/+2If you have anything close to a decent income, putting 20% of your income into 401K or Roth IRA is impossible.
At my company, "fairness" laws force to put in at most 4% of my income.- trdrstv, on 05/17/2008, -0/+0The legal limit on a 401k is 15,000 this year (not counting employer contributions). You make over $350k ?
- eryximachus, on 05/17/2008, -0/+1Read the wikipedia article.
I make $200K and am therefore a "highly compensated employee". I live in NYC, so while this kind of money may seem like a lot, it really isn't. Basically, when you are such a person - you are at the mercy of the lowered paid people in your company. The HDC cohort, as a group, can't save more than 2% of what the lower paid employees save. Also being in NYC, our lower paid employees are almost entirely minorities who eschew saving and even banks. A small minority of our lower paid employee cohort actually uses direct deposit for instance, and despite a 50% matching - less than 25% of our lower paid cohort actually participates in the 401K program.
So, the $15,000 limit is most certainly NOT the only limit.
- eryximachus, on 05/17/2008, -0/+1Read the wikipedia article.
- trdrstv, on 05/17/2008, -0/+0The legal limit on a 401k is 15,000 this year (not counting employer contributions). You make over $350k ?
- nienhulm, on 05/17/2008, -0/+7"Live on what you make"
- digjam, on 05/17/2008, -0/+4"If you plan on dying very soon, maybe retirement isn't for you?" Really?
- ScottishMcDuff, on 05/17/2008, -1/+9This article doesn't ever get around to answering it's own question.
At least not in depth.
I might as well ask some guy on the corner and let him tell me his vague opinion.
Buried.
(Oh, and why the hell do I have to pay social security taxes if I will reap nothing from it. The system's broken. Someone FIX IT!}- Ebeach, on 05/17/2008, -0/+1Do what I did. Get a job with your local city or town. Pay into their retirement system = exempt from social security taxes. (at least in Massachusetts)
=) - Aroundtheworls, on 05/17/2008, -0/+6The answer is to save as much as possible by living well within your means. At first the amount of money saved can seem rather insignificant but eventually it begins to accumulate and, if properly invested, the return on investment after a surprisingly short time becomes meaningful.
I earn a good salary but you wouldn't know it if you met me- I don't wear fashion branded clothes, don't have a car (I live in a city where I can use public transport), and have a modest-sized apartment. But over the past 10 years I've saved as much as I can and could retire next year if I wanted to.
The key for me was not trying to keep up with other people's spending and it helped to have friends who can have fun without throwing money around.
- Ebeach, on 05/17/2008, -0/+1Do what I did. Get a job with your local city or town. Pay into their retirement system = exempt from social security taxes. (at least in Massachusetts)
- atroxodisse, on 05/17/2008, -0/+8If you have a 401K with Schwab or Fidelity or any of the big 401 K companies they'll tell you exactly how much you have to put away from your current age to the retirement age you specify and they'll show you approximately how much money you'll have when you retire. There are calculators on their websites. They also let you loosely control how much of your money is in stocks, bonds, and mutual funds so you can have some control over how much risk you take.
- Y0tsuya, on 05/17/2008, -0/+4They'll also regularly send reps to your company for presentations and Q&A.
- Virgule, on 05/17/2008, -2/+2Don't waste a decade making billions on behalf of a company who, then, simply ignore you when you step up and claim a slice of the wealth. Thanks you Apple :(
(I know this is not exactly relevant to the article but it's not so far off. Also, I am planting my seeds. So thumbs up or down does not matter. It will stay HERE anyway and thats all I want)- Hamletlere, on 05/17/2008, -0/+1I know a developer that works for Apple, and his stock options are making him far more than I'll ever get from my corporation. He's talking about paying off his house soon.
Wish Apple would treat ME so badly... (then again, he works very long hours, so maybe I'm glad they don't have the chance!)
- Hamletlere, on 05/17/2008, -0/+1I know a developer that works for Apple, and his stock options are making him far more than I'll ever get from my corporation. He's talking about paying off his house soon.
- LRoy12, on 05/17/2008, -0/+3i want that piggy bank in the thumbnail
- JonTheGoose, on 05/17/2008, -0/+3If the total amount of funds in my savings and checking accounts are any indication I should be able to retire when I'm.....*crunches the numbers*......368 years old.
***** yay. - dhughes, on 05/17/2008, -2/+6 I'd love to get a 3% increase in my salary or even match inflation but even that won't help since that doesn't take into account an increase in certain expenses such as gas.
I'm going backwards, I make less now than I did three years ago.
- bman1984, on 05/17/2008, -1/+1Look for work elsewhere? Opportunities don't come and find you.
- dhughes, on 05/17/2008, -0/+2 Looking, just not finding.
I'm trying to save some money to go back to school for certificates since most government jobs (biggest local employer) only see papers and not experience that what I have to do. I live in a small city and the cost of fuel is what's killing me; fuel oil and diesel have gone up 50% compared to last year, my salary has gone down about 2%.
The worst part at my job I'm locked into my position, other people have been hired and moved up from nobody to Supervisor ($10/hr to $25/hr) within weeks due to freak occurrences.- bman1984, on 05/23/2008, -0/+0I hear you there. I am from a small town in Canada. Id love to pay 4 bucks a gallon for gas
- fantasyflamz, on 05/20/2008, -0/+1It's gas money that is hurting people the most.
- dhughes, on 05/17/2008, -0/+2 Looking, just not finding.
- bman1984, on 05/17/2008, -1/+1Look for work elsewhere? Opportunities don't come and find you.
- neosinn, on 05/17/2008, -4/+2Why worry about it, If the dems take office they will give insurance to everyone, lol WHAT money will you have to save? IT will 80% go to Gov in taxes one way or another. Yay another bill wanna be give away the country! lol
- twomeyw23334, on 05/17/2008, -0/+0People might get pissed and vote Repub again, then you'll be screwed by conservative values that rely on individual responsibility. That is, making a big assumption that Republicans would actually act in a manner their base wanted them to, otherwise, they'll keep taking tons of your money or loans from China and just spend it on other crappy stuff.
- MiddleOfNowhere, on 05/17/2008, -0/+2For the current mess your country is in, give credit to the ideology/party/government that dragged you into an unnecessary war that cost billions of dollars and thousands of lives, fueled the military-industrial complex that leaves too little for education and infrastructure and encouraged banks and companies to let millions of households slip into debt by promoting mindless consumerism.
In this context, mandatory medical insurance should be the least of your concerns.
It's the neoliberal "spend/invade now, let's worry later" school of thought that has led to the status quo. These guys have (literally) given away your country, and you can thank a coming democratic government if it somehow manages to drag the US out of this mess.
- zoziw, on 05/17/2008, -0/+1I already save 10% of my income thanks to the company I work for offering a matching retirement contribution, but even with that, I enjoy working and get bored after more than a week of vacation.
If you view working as some kind of curse you need to find something else. - cristian9797, on 05/17/2008, -1/+2Don't retire! Early retirement may mean earlier death
- duggdowncatisad, on 05/17/2008, -2/+2LOL @ this being some sort of state secret that the big evil investment bankers are hiding from us. It's the answer to a math problem. If you failed math, there are calculators online that will do the math for you. Enough of the victim mentality, please.
- taradisiac, on 05/17/2008, -3/+0I go to the Internet to find out how to handle my economic life /sarcasm
- Envark, on 05/17/2008, -0/+1Actually, the Internet is a good source for financial information.
- kyemichael, on 05/17/2008, -0/+4I think the question is whether or not the dollars you earn and save will be worth a damn in the years to come. With government spending out of control on wars, social programs, company and mortgage bail outs, etc, taxes are going to rise. But before that, the government will take a loan from the Federal Reserve who will in turn print more money which will trigger inflation and the dollar will continue to devalue until that savings you have is worth nothing. When I think about the state of our economy, our government, our nation, all I can hear in my head is a quote from Thomas Paine, "We have it in our power to begin the World over again."
- TheMoniker, on 05/17/2008, -0/+1If you believe that to be so, could you not take advantage of it by investing in the emerging markets, junk bonds or gold?
- Envark, on 05/17/2008, -0/+0Yep, I feel 40% in international ETFs is one of the only reasonable approaches these days.
- dddavid, on 05/17/2008, -0/+0Who says your savings/investments have to be in dollars? No one.
- TheMoniker, on 05/17/2008, -0/+1If you believe that to be so, could you not take advantage of it by investing in the emerging markets, junk bonds or gold?
- nickymouse, on 05/17/2008, -1/+2Why worry about retirement. We just need to elect officials that are willing to tax the suckers that saved for retirement and give it to us. That would be fair right.
/sarc - WoollyMittens, on 05/17/2008, -0/+2Too bad that at a global scale, US savings have just about halved in value. Will your pension plan survive economic collapse?
- twomeyw23334, on 05/17/2008, -0/+1Who has pensions anymore other then government employees? And I'm sure they don't have to worry, taxes can always be raised.
- Millsee, on 05/17/2008, -5/+6Don't quit what you love, MrBabyMan....... Don't let these jealous ***** nerds ruin what you enjoy.
- username484767, on 05/17/2008, -5/+3I'd save if... you know... I didn't have to pay bills and eat.
THANKS BUSH YOU ***** ***** :D- twomeyw23334, on 05/17/2008, -0/+3Bush forces you to eat? That ***** PIG!!!!!!
- Envark, on 05/17/2008, -0/+2Post a list of expenditures you made during the month of April.
I'd bet there is some fat that can be trimmed.
- fixty, on 05/17/2008, -0/+2I reject the premise. I say don't waste your life working for the purpose of squirrelling away money for a retirement that you may not live to see. Instead learn to get by with less and work less and live more, now.
- MiddleOfNowhere, on 05/17/2008, -1/+1A few years ago, I would have said this is hippie nonsense.
But today, this is what I do.
I expect to work for the rest of my life. Which is not a problem, as I really like what I'm doing.
If I get sick, I have excellent medical insurance.
And if I can save something, I will.
But I gave up the "squirrelling" mentality, as you called it, and work less to enjoy what life has to offer now that I am relatively young, healthy and free to decide what to do. And it's surprising how many fun things in life do not cost an arm and a leg. Good books, music (used CDs for a few bucks), a day in the park ... Life can be good. BTW, living in a part of the world where you do not need a car really helps. :) - trdrstv, on 05/17/2008, -1/+1I must disagree. You are being very short sighted. There needs to be some balance to living/ saving. Saving for later buys you options. I don't endorce saving every last penny, and living miserly, you must live and travel and enjoy life while you are young enough and able to do so, but spending every last dime will only put you at the mercy of others.
A simple saving tip for retirement is every time you get a raise, split it. Even if it's only a 2% raise, put an additional 1% in your 401k, and the other 1% in your pocket.
Personally I love to travel. I'm driving an 8 (going on 9) year old car which is paid for, and allows me extra money to travel (The exact same money gets me to Europe twice a year). You don't need to be miserly to save, just pick what's important to you and allocate what you have appropriately.
- MiddleOfNowhere, on 05/17/2008, -1/+1A few years ago, I would have said this is hippie nonsense.
- cdigioia, on 05/17/2008, -0/+21.) Create a budget with savings built-in, stick to it & record expenses
2.) Put your growing savings in appropriate assets (if you're young, probably a stock index, for older mix in a bond index)
3.) Have you assets in tax-preferred accounts when possible (401k, etc.)
There ya go... - psykiv, on 05/17/2008, -0/+1I don't have a retirement plan. The doctor says I only have a few months to live anyways. Time to apply for a bunch of credit cards and max them out before I die.
- HadBeans, on 05/17/2008, -0/+0Cool....
Can I borrow $10,000?- linagee, on 05/17/2008, -0/+1Sure. prosper.com
- HadBeans, on 05/17/2008, -0/+0Cool....
- HadBeans, on 05/17/2008, -0/+0what should you be doing now when you're young to make sure you can live in style when you stop working?
I might have to start robbing banks now then....
Apart from that i'm *****. - warragul, on 05/17/2008, -1/+3As a rule of thumb every $1000 you have in your pension fund will generate $1 per week of income when you retire. That's probably low-balling it a bit but it's a good guide. This assumes that you want to leave the capital of the pension when you die. In my case I'm running my fund down slowly and hoping I don't live beyond 83. If I do, I'll starve. :(
- liuite, on 05/17/2008, -0/+4a friend of mine retired by age 50, and so did all of his siblings. his rule is "pay taxes with 1/3 of your income, live on 1/3, save and invest 1/3. what he didn't say was that none of them had kids. so folks, stop spoiling your kids by giving them more than they need, or else not have any. if you have kids, save and invest so they can go to a good school instead of squandering on ipods, video games and such.
- eryximachus, on 05/17/2008, -0/+2Another simple course of action is to get a 3-bedroom house or apartment. Put the kids in bunk beds and send them to public school.
Giving your kids their own room not only costs you more money, it results in poorly socialized children who lack discipline.
Unless you have the money to send your kids to exceptionally elite schools, public school is almost always the best choice. It saves you a lot of money too.
Anyway, having kids is actually very affordable in the US if you follow these rules and you have a wife who will actually stay home and take care of the kids.
- eryximachus, on 05/17/2008, -0/+2Another simple course of action is to get a 3-bedroom house or apartment. Put the kids in bunk beds and send them to public school.
- unclebuck, on 05/17/2008, -0/+2I just wish I could opt-out of Social Security payments so I could add that 6% to what I already put in my 401k and Roth IRA. The boomers are going to drain that system dry, and I'll be damned lucky to get anything out of it when I retire around 2035 or so.
- trdrstv, on 05/17/2008, -1/+16% ?!?!!? You are contributing 7.5% (Counting medicare) and your employer is forced to match it. So you are contributing 15% of your wages to a system that actually has no basis in investments. If it was in the stock market, there would be HUGE gains to be had, and going bankrupt would be a laughable proposition.
Don't blame the Boomers for the government mismanaging the money. The boomers contributed 15% for their working life (about 40 years) and are expected to draw out for 10-13 years (life expectancy). All in a time when the dow went from 1000 to 12000. - linagee, on 05/17/2008, -0/+2I'd sign that petition!
- trdrstv, on 05/17/2008, -1/+16% ?!?!!? You are contributing 7.5% (Counting medicare) and your employer is forced to match it. So you are contributing 15% of your wages to a system that actually has no basis in investments. If it was in the stock market, there would be HUGE gains to be had, and going bankrupt would be a laughable proposition.
- peterinjapan, on 05/17/2008, -0/+2Add the fool.com RSS feed to your lineup of articles to read. While they post WAY too many articles -- around 30 a day, some of which are regular re-posts since, well, that ***** is way important -- it is a great way to get information and distill the noise into something you can be cool with. Themes: sticks with regular dividends outperform non-dividend stocks over time, Rupert Murdock is your god so let's all be like him, and how to start small so you don't feel overwhelmed. Really a good bunch of guys, although their annoying arbitrary picking of dates (e.g. "since May 5 of 1988, this stock has returned 1024%" with no reason why that exact date was chosen by them) does get a little old.
- mike23w, on 05/17/2008, -0/+2Here's a good retirement calculator:
http://moneycentral.msn.com/retire/planner.aspx
It was much more useful than the article. - ssahagun, on 05/18/2008, -0/+2saving bad, investing good
- SkateItsGreat, on 05/18/2008, -0/+0Saving money in a bank is stupid. 4% a year? So you would give away a dollar just to get a $1.04 after a year? Investing is so much better as long as you graduated high school and know half of what youre doing.
- reddikilowatt, on 05/18/2008, -0/+1CD rates have been rising lately:
http://www.fisn.com/rates.htm
However, if you are young, CDs are a lousy investment. If you are over 50, you need to reallocate to safer investments.
- reddikilowatt, on 05/18/2008, -0/+1CD rates have been rising lately:
- Financialzip, on 05/23/2008, -0/+0Seems like this post has a lot of detractors. However it is very attainable to save for retirement.
The problem people get into especially in this day and age is they want what the can't have so almost half of their income is spent on debt.
If you cut out the frivolous spending you can easily take 20% to 30% of your income and use it to put to retirement.
The lesson is live on less.
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