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Newbie looking for general financial advice

Posted on 1/23/25 at 12:45 pm
Posted by mudcat tiger
Louisiana
Member since Nov 2018
298 posts
Posted on 1/23/25 at 12:45 pm
I’m 57 and make 75K a year. I only have $250,000 in my 401 plan. I went through a divorce several years ago and had to give her a chunk and also had 4 kids so I was not able to invest much. I’m currently putting 8% in 401 currently. What shape am I from a retirement standpoint?
Posted by VABuckeye
NOVA
Member since Dec 2007
38283 posts
Posted on 1/23/25 at 12:57 pm to
Do you have an IRA or can you fund an IRA? Do you have any extra cash to put into a brokerage account each month?

What age do you want to retire?
Posted by mudcat tiger
Louisiana
Member since Nov 2018
298 posts
Posted on 1/23/25 at 1:24 pm to
I would like to retire at 67 if possible. I don’t really any extra income available but will put future raises in 401.
Posted by notsince98
KC, MO
Member since Oct 2012
21411 posts
Posted on 1/23/25 at 1:25 pm to
you are a bit behind the 8-ball but get your total retirement contribution percentage to at least 15%. Once you get there and recalibrate your living budget, see if you can squeeze more.
Posted by VABuckeye
NOVA
Member since Dec 2007
38283 posts
Posted on 1/23/25 at 1:51 pm to
Social Security Payment Calculator

Use this to calculate your social security payment at FRA (age 67). I think you should be around $2500 a month.

Here is a good 401k Calculator.

I don't know your company match. I put in $75k as income with 8% towards your 401k a year with a 3% match. I calculated VTI at it's historical average (13.4%). If that holds true you'll have a little over $1 million at 67. I don't know if you have a house payment but $2507 plus drawings 4% from the 401k yearly would put you at about your current income level in retirement.
This post was edited on 1/23/25 at 1:55 pm
Posted by VABuckeye
NOVA
Member since Dec 2007
38283 posts
Posted on 1/23/25 at 1:54 pm to
quote:

you are a bit behind the 8-ball but get your total retirement contribution percentage to at least 15%.


This is very good advice. ADP has a paycheck calculator that you can play around with. You might be surprised that upping your 401k contribution doesn't affect your take home pay as much as you think it does because your federal withholdings go down as more contribution to your 401k reduces your taxable income.
Posted by TorchtheFlyingTiger
1st coast
Member since Jan 2008
2920 posts
Posted on 1/23/25 at 1:58 pm to
How much do you anticipate needing annually after retirement?
What is your estimated SS payment at 67 and 70?

Do you get a match in 401k?
8% of $75k is only $6k. $60k over 10 years make huge impact try to increase it.
What are you invested in? May need to accept more risk to hopefully get enough return to get caught up.
Posted by Ace Midnight
Between sanity and madness
Member since Dec 2006
94809 posts
Posted on 1/23/25 at 2:32 pm to
quote:

What shape am I from a retirement standpoint?


Meh. Not great, not terrible.

Using the polarizing 4% rule, $250k will generate about $10k a year, forever. If that's shocking to you, realize that the average American has nothing saved for retirement (this isn't strictly speaking true, but nearly half have $0) and will have to rely on SS alone (or maybe some poverty programs).

Focus on saving more over the next 10 years and getting completely out of debt. Doing both of those things by Age 67 will set you up reasonably well. Again, I don't know your entire situation, so you may have to do some other things with spending if you have a lot of non-debt expenses.

And you're the perfect age for SS to start running out right when you hit 67*. We can't fix the past 40 years, but you can prepare over the next 10. Good luck.

*-based on current projections.
This post was edited on 1/23/25 at 2:36 pm
Posted by OysterPoBoy
City of St. George
Member since Jul 2013
43145 posts
Posted on 1/23/25 at 3:42 pm to
How long do you plan to live?
Posted by mudcat tiger
Louisiana
Member since Nov 2018
298 posts
Posted on 1/23/25 at 4:20 pm to
My dad is 83 and mom is 78 and both are in fair health. I reckon the Lord Jesus will determine my days but I’m trying to think about retirement in another 10 years
Posted by gpburdell
ATL
Member since Jun 2015
1579 posts
Posted on 1/23/25 at 4:46 pm to
The big question is how much in annual expenses are you planning for in retirement (including taxes, healthcare etc)?
Posted by Popths
Baton Rouge
Member since Aug 2016
4401 posts
Posted on 1/25/25 at 7:37 am to
Make sure you’re debt free when you retire. Equally important.
Posted by TorchtheFlyingTiger
1st coast
Member since Jan 2008
2920 posts
Posted on 1/25/25 at 8:00 am to
quote:

Make sure you’re debt free when you retire

Not necessarily. If OP has low interest debt it may be advantageous to let the debt ride and invest more heavily instead. Fixed low interest mortgage payments can actually be a good inflation hedge if portfolio appreciates at a higher rate and SS payments increase w COLA (pension too if applicable)
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