Saving for retirement now is a GREAT idea! Keep up the good work. IT shows a real maturity that most people (your age or older) dont have. Most people want to spend more than they get thinking they will worry about retirement when they retire, bad idea! Keep with the 401K and Roth IRA.
Think about putting some $$$ to the side in a good Mutual Fund or Money Market as a down payment on a house. If you can stand to wait a few years before buying a house, then having a big down payment will help a lot. Just dont go house crazy and buy the biggest thing you can get, and dont do 40 year loans! Keep it to a 15 year fixed thats no more than 25% of your income.
2007-03-13 05:19:31
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answer #1
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answered by Joshua W 3
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I don't think you can really save too much for retirement. The sooner in life you put money away, the longer it has to compound and grow substantially. 5k invested for 35 years at 10% ROI reaches 154k, but that same 5k invested for 40 years comes out to 249k. Quite a difference in those 5 years, huh? That is the power of compounding.
As you get older and closer to retirement, the deposits you make will have less of an affect on your final balance when you retire because money from later years does not compound as long, even if it is a larger deposit.
Thing is, you should not ignore other short and long-term financial goals, either. Saving for a house, a family, etc. should all be kept in mind. Take a look at a copy of a chart below. Strategy B includes those other saving goals you should consider.
Also, you are never too young to save for a house, even in California. As a first time home buyer, you can use up to 10k from a tax-advantaged retirement account without penalty for your down payment.
from URL below---
Within Strategy A: Reduce Expenses, there are four basic sub-strategies:
A1 – Run an Economically Productive Household
A2 – Avoid Overspending and Overpaying
A3 – Reduce Consumer Debt
A4 – Reduce Taxes
Within Strategy B: Reduce Liabilities, there are six basic sub-strategies:
B1 – Utilize Insurance
B2 – Implement Retirement Plan
B3 – Create Emergency Cash Cushion
B4 – Create Will / Trust for Heirs
B5 – Reduce or Remove all Debt
B6 – Family Planning and Goal Setting
Within Strategy C: Increase Income / Net Worth, there are four basic sub-strategies:
C1 – Own / Partner in Businesses
C2 – Stock Market
C3 – Real Estate
C4 – Career or “W-2” job
Be blessed,
2007-03-13 04:40:22
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answer #2
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answered by Ethan 3
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I would say max out the retirement savings now, while you can. Assuming, of course, that you are not incurring debt to do so.
Housing is likely to stay flat and probably continue to go down for the next year or two. Additionally, the more you save now for retirement, the better off you will be, since it has longer to grow.
The money in a retirement account looks good to a mortgage lender, they consider it to be reserve money. There are also provisions for borrowing against a retirement account for a hosing down-payment, but I don't recommend this.
2007-03-13 04:31:57
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answer #3
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answered by math_prof 5
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NO WAY!!! I am only 22 and though I am not yet maxing out, I give all that I can afford and then some. Many financial advisors will say that our age is the biggest asset that we possess. Keep doing what you are doing. You will probably be able to retire early and maybe even start a new career.
2007-03-13 05:08:58
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answer #4
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answered by KI 3
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you can never save too much for retirement! but make sure your still having fun durring your working life. you don't want to work your whole life and save every penny and retire and have to give it all to your siblings when you pass away.
this life is for you to have fun!
buying a house isn't impossible. fannie mae mortgage programs do not care what age a borrower is. i've done 40 year mortgages for 80-90 year old borrowers. its not an issue.
2007-03-13 04:39:46
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answer #5
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answered by aemerson82 1
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Well done for considering your retirement so young. Lots of people don't and it is so worth it. It sounds to me like you pretty much know what you are at. I'd stick with it.
2007-03-13 06:35:13
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answer #6
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answered by gerrifriend 6
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I don't think u can ever have to much money for retirement..
2007-03-13 04:48:50
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answer #7
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answered by shorty21 5
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Well, you shouldn't be worried about retirement! You barely started working! You will have a whole lifetime to save for your retirement! It is important, but not so soon!
2007-03-13 04:39:31
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answer #8
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answered by Anonymous
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