We have limited our retirement saving to the matching amounts - my husband ends up with 12% total(him 8, the company 4) and me with 15%(me 5 and the company 10). I gave up on IRAs when I had to worry about deductibility, co-mingling, etc. I think our income does us in on the new ones and I've hit a point where I think we're set on retirement. My husband actually doesn't plan to retire and I'm thinking that I'd like to enjoy some of the money now. It may sound foolish(little f) but we have given our children good educations,etc and I really don't plan to leave much at the end. I'd rather see them enjoy it(if there's anything left after college and weddings). We've been savings like this for about 20 years and we have about 20 to go until retirement age.(It's mostly in equities) Reactions ?
Two technical comments: You're still taking advantage of the employer 401Ks right? Cuz that's a 50% return on your contributions. If you don't want it, I'll send you the money for the contributions and you can send me the contributions and match!!! :) And unless you're in the megabux earnings, there aren't any limits on the ROTH 401Ks (your contributions are made with after tax dollars w/o any deductions available.)Strictly subjective stuff (beware: I'm rambling here): We've talked about it too! We're working so hard and tucking so much away, we end up being cash poor between paychecks. I brown bag it most of the time since I end up with so little time for lunch anyway, but I'd at least like the cash available so I can go out to lunch more than once a month. And with two kids (5 & 15mos) we'd love do dinner out or order in more often, but we hate to dip into savings. On a larger scale, I've been drooling over Mazda Miatas since they first came out. But a two-seater doesn't work with 4 rear ends.And all our savings angst doesn't even take into account that our parents' estates will eventually get distributed. Not that they will make us rich, and we can't stand the thought of saying goodbye to our folks, but that day will come at some point, so we shouldn't ignore the fact there will be something there. But enough about me. Your husband doesn't want to retire at all? REALLY? Heck, I want to retire RIGHT NOW! Realistically I figure I'll do something just to stay active, but for fun and stimulation, and definitely not 40 hrs a week day in & day out. Better double-check on this with him, do some imagining on what life and work will be like in 20 years. If nothing else, I'd think grandkids might change his tune.I guess the BIG question is: Are you sure you have enough set aside for what you want to do (or that will grow to be big enough)? What if EVERYTHING goes wrong? (if we talk about it, it won't happen) If you do spend a bunch now, will you regret it later? What happens if your wrong? Will you kick yourself for decades? I dropped out of the rat race for 6 months. I went back to college in January 86, and between classes and summer jobs, worked straight through graduation in June 88. Two weeks later I started a deadend job and worked 50-60 hours a week for two years.We quit and went to Europe for a month. Felt great. But then we came back and worked for 4 years straight, the last two years in a deadend job with a government contractor with a bureaucracy thicker than the government's. Quit and withdrew $10K from the brokerage. Put in new lawns, painted, skied, relaxed.Looking back, I'd love to have put that $10K in the MF4 and watch it balloon; I could go out to lunch every day, but only if they'd have let me out of the funny farm, which is where I'd have ended up if I hadn't used that piece of savings while I got my bearings.One of the MF guiding principles, poorly paraphrased, is that life is more important than the money; you can get get a market-beating return without an undue amount of legwork. And with a reasonable amount of work you can get even more for your money. But no matter what approach you use, it shouldn't take over.In closing (FINALLY!) this is an intensely personal decision. What you do probably wouldn't work for me, and vice versa. But I also believe in rewarding yourself and splurging once in a while, cuz that's why we work so hard and do all the extra research. Don't go out and blow the whole portfolio, but do skim a little cream off the top and take care of number 1.tf
We are receiving the top match from both employers(to me, not doing this would be like walking past money laying in the street). Our 3 kids are currently in pricey private schools(2 at 6700, 1 at 10,000) so we live very frugally and projecting what we need for retirement without tuition certainly takes the income needs down. no, he really doesn't plan to retire - he LOVES what he does(software engineering). I think it's strange but when I do projections, I assume he will retire at 65. We'll be fine no matter what we do.(Also our income split is about 20% me, 80% him). We're in our 40's and started retirement savings mid-20's. I guess where I am is that I'm really not planning to mess with any kind of IRA until all of the kids are out of college(12 years from now). At that point I'll reassess our tax situation and see what I want to do with gifts for the kids. In the back of my mind, I'd like to surprise them with gifts toward down payments when they buy their first houses. I would also like to supply any grandchildren with musical instruments and lesson if they desire.
okay great! I wanted to make sure you sat down and had Deep Thoughts about 20 years from now. We still need to do that in order to make sure it will happen. We started saving in our twentys too, but not with any targets or goals, just to get the $$$ locked away so it could start compounding. And with a 5-year old and a 15-month old, we can't look much farther ahead then bedtime right now!I like the idea of instruments for the grand kids. And come closing time on a house, it's great to get a surprise (we really wish we had put in new carpet before we moved it, but it definitely wa$n't an option...tf
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