Retirement

[jsm]

Every month ~60% of my paycheck goes to a 403( B ); 75% of money left over at year's end goes to a ROTH IRA (this would be a yearly contribution). Should I be investing (1) this much; (2) this way (yearly versus monthly contributions)? Very new to this....

 

You can actually calculate an upper limit on my income with these data! Isn't that terrible?

Edited March 17, 2005 by jsm

[bluemoon2]

how close are you to retirement, and 60% of what salary?

 

I would consider contributing 60% very steep, unless you're getting really close to retirement.

 

What if you don't live to retirement? What about short term saving? Why not enjoy some of the money you earn before you retire? God forbid, if you passed away before retirement, all of that saving would lead to nothing for you. And do you need that much money for retirement?

 

Don't forget pensions, social security, etc will supplement your income as well.

[rpatty]

Typical financial experts tend to recommend 10-15% of income as a likely amount to contribute to retirement, though I personally tend to lean towards 15% as being more sensible. All of this depends a lot, though, on what your income actually is, how close you are to retirement, and what your lifestyle is like. I agree with the previous poster that you don't want to completely deprive yourself now just to have money set aside later, but neither do you want to deprive yourself later to spend now. The trick is to find a good balance. If you're living well, having fun, and happy--at least as far as money is concerned--then putting away as much as you are may be fine. Or if you're gunning for early retirement and are making enough that living on 40% of your income is a piece of cake, that's great, too.

[54regcab]

If you have any car loans, credit cards or other non-mortage debt i would drop retirement to 15% and pay those off.