No. of Recommendations: 1
As mentioned, you want to contribute to your 401(k)/403(b)/SIMPLE IRA to the extent of the employer's match...then contribute either to a deductible Traditional IRA (if your AGI allows it), but if not, to your Roth IRA.

The next question is how much?

Couple of divergent discussions above....but I recommend saving to the level you require. If you wish to save more and your lifestyle allows this, then save.

Excess savings has multiple good points
1) Choices (timing, location and lifestyle in retirement)
2) Getting discretionary $$ out of your household so you have less that you must support in retirement
3) Mental piece of mind
4. Leaving a Legacy to family or charity
5) Reduce or eliminate need for Long Term Care Insurance

The trade-off is a lower lifestyle while working and not utilizing savings due to premature death

Each person/couple should contemplate their discretionary income to decide what works best for them.

So what is the 'right' amount to save? This is a multiple step, time-value-of-money calculation, not unlike the calculations used by pension plan actuaries. It requires taking into account multiple personal factors and reasonable assumptions (current savings, expected future rate of return, expected inflation rate, retirement age, years in retirement, projected Social Security or Pension benefit(s) and any desired legacy), with the calculation redone each few years to make any needed adjustments. This process is a bit difficult to expalin here, althugh there may be online sites that will offer it....or you can seek the help of a CPA or CFP who is familiar with doing these.


BruceM
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