RETIREMENT!!! Just thought about it and freaked

[Steak Helmet]

I am now in my early 30s and just had a SHOCK reading some stuff on the Net...

by the time you retire, you and your spouse need 205,000.00 for medical expenses. HOLY SHIT is all I have to say.

People are planning retirements for people to live to be 95...ummm that is 30 to 35 years post retirement.

What do you guys suggest would be a good way to START saving money for retirement?

Also they stated that NICARAGUA is the worlds best kept retirement secret. US trained doc visit 35.00...meat for a couple for 2 weeks 30.00, Veggies for 2 weeks for 2 30.00. The 10th largest fresh water lake in the world...only fresh water sharks in the world live in that lake.

ANYWAYS...just freaking out a little thinking about it. WORK is great pay, but no benefits...should I take less pay to have benefits? Right now I pay for my own medical (43.00 a month). Dental and vision are not included.

Thanks

 

[Sassy]

I tell you how I do it. I don't make very much money at all, but my parents taught me how to manage my money. I have always tried to live below my means. It's not always possible, and sometimes thing just get tough.

For starters open an account and put some money away each pay week. Even if it's only $10, 20 or $50. It will start adding up. As you get extra money, always make it a rule to put at least 10% away. For instance.. tax refund put a least 10% in a savings. Most Retirement accounts that are not associated through work require a $2,000 min balance to open an account, so once you get the min balance saved up then establish an account.

If you have a retirement plan at work, you can just start your deductions without any min balances. Always take advantage of the match your company offers... this is extra money, and it's never a good idea to turn down extra money.

Next start having money deducted each pay week. By deducting the money, you will start getting use to it not being there and eventually you won't miss it. Then as you get pay raises, increase the amount you put into your retirement account even if it just $5. The sooner you increase the amount closer to your raise the less you will miss the extra money being deducted.

I hope this helps... I've got to run for now.

 

[Curiousity]

This is pretty much how I started saving for retirement:

1) make it automatic because you won't miss what doesn't show up in your hand/bank
2) fund a 401k (if offered) to a exactly of the % that the company matches
3) fund a Roth IRA (or traditional I guess) to the maximum amount
4) ?

Well, I'm still working on funding my Roth fully. I put 4% (company match) into 410k and 200/month into a Roth IRA. But I've also focused on minimizing my expenses and paying off debt for the last couple of years to put me in the position to be able to save that money.

Oh, I eat a lot of 5-grain hot cereal too. 5-grain cereal, LBAs, and flax seed oil form the core of my diet.

 

[Sassy]

The sooner you start your retirement the better. I started my first IRA my first year out of college. I only made $14,500 that year, but I saved up $1,000 and the end of the year I opened my first IRA account. Over the next four years I had only put $4,000 in that account, but ten years later I had $26,000. That was without adding any extra money in it. I was married at the time and my husband (now ex) didn't think I need to put money in retirement. He was putting money into his 401K, and he thought that was enough. Now I look back and think about what a big mistake that was.

I recommended for both spouses to put money into retirement accounts. Especially if both their companies offer matches in their 401K. You both should be taking advantage of both companies matches.

 

[morepain]

Sassy gives some great advice here, don't take it lightly. Time is the critical element. Most people don't start soon enough because they don't understand the dynamics of the compound interest equation. F=(1+i)^n get familiar with it, i would suggest studying investing basics at Fool.com (the motly fool website)

 

[slimjones]

Questions...

I've been an investment advisor for the last 8 years......There are a few basic questions you would be asked if you sat down with one to begin drawing up a retirement plan best suited for you. This would help determine if it would be best to save via a Roth IRA (taxable money in....tax free out) or Traditional/401k (tax deductible in...taxed out)....In addition, when sitting w/ an advisor they can run a retirement calculation as to how much you will need or how much you will have based on what is set up today vs cost of living during retirement. I would suggest sitting w/ an advisor...everyones retirement plan is different. Needs are different and need to be met differently. If you make alot of money now the tax deduction of a traditional/401k may be best then when your retired, in the minimum tax bracket, and taking tax free from a roth when you wouldnt really be paying much taxes anyway. There was some good advice here but you really should sit w/ a professional and open up your entire financial history with them so a proper plan can be drawn up.

 

[MDT]

Relax, you are still young. You just gotta be disciplined and put money away every month. I would recommend the following steps;
1. Pay off high interest dept. first(i.e. credit cards) - thats a 14-21% return on your money if you think about it
2. Save up 3 months of salary and keep it in a money market fund (higher interest that savings accounts and next day access to your money) for emergencies. Some experts say at least 6 months, but that is excessive.
3. Index mutual funds (check out Vangaards or charles schwab's websites)- this will allow you to trend the market. Do not get caught up with trying to get better averages than the market, a lot of smart people try and most fail (80% of mutual funds under preform the index mutual funds, and these are actively managed by the "experts")
4. Max out your 401k contributions and your Roth/traditional IRA (it just makes sense

invest on a monthly basis, think of it as paying a bill to yourself. I absolutely agree with setting up automatic account deductions if you can.