My company offers a 401K that I contribute too. I contribute 8% and my company gives me 12% (yes its true. 5% match, plus 7% automatic). My wife does not have a 401K at her job so we opened a traditional IRA.........Is there a "goal" percentage of income that we should be setting aside, or is it just however much we can afford? Our ages are 31 and 26 if that helps any.
2007-03-15 09:19:13 · 6 answers · asked by Win the West!!!! 4 in Business & Finance ➔ Personal Finance
Its not how much of your income you need to save but how much you can live off of at retirement time that determines how much you need to put away.
This simple formula can help : Take any amount, divide it by 2 and then drop a zero.
We will do ONE MILLION for the example :
$1,000,000.oo divided by 2 = $500,000.oo DROP a zero = $50,000.oo.
Can you life off $50,000.oo a year?? If so then you will need to have one million dollars in an investment account somewhere making that interest to live off.
How much you need to put away from your income now to get to the desired amount you need at retirement can be figured out by going to "msn money central" and click on "planning" then go to "savings calculator" and choose your option.
Simple simple!
: )
2007-03-15 09:52:50 · answer #1 · answered by Kitty 6 · 1⤊ 0⤋
Your wife should take 10% of each paycheck and put that into her IRA. It sounds like a lot but she doesn't have a company matching her. It is also a good idea in case something happens between you two or you pass away. No offense but you guys are too young to get anything worthwhile out of life insurance so it is an extra nest egg for her and your kids if you decide to have any.
2007-03-15 09:25:45 · answer #2 · answered by espressoaddict22 3 · 1⤊ 0⤋
I don't know if there is a "standard" for this or not, but I would think you should be putting back a minimum of 10% of your gross. Pay debts with 20%, and live on 70%.
2007-03-15 09:22:29 · answer #3 · answered by Sky K 2 · 1⤊ 0⤋
We don't have a retirement fund. We would get more for our money investing in property. Over here in NZ where I live, you can buy a section for $100,000 and in three to five years sell it for $200,000. That's better than putting your money in the Bank. Better return.
2007-03-15 09:50:33 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Dave Ramsey reccomends 15%. If you're doing 20%, and she did 10%, you'd be on target.
2007-03-15 09:44:39 · answer #5 · answered by Anonymous · 0⤊ 0⤋
none, you should plan to die before you reach such an ancient cretinous age,
2007-03-15 09:24:26 · answer #6 · answered by Anonymous · 0⤊ 3⤋