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Message
Saving for Retirement Advice
Posted on 1/3/19 at 4:19 pm
Posted on 1/3/19 at 4:19 pm
Been lurking for awhile now and have learned a lot on what to and not to do.
Here’s my situation for those willing to give advice:
35 yrs old. Married w/2 kids. No debt. No monthly bills, besides internet and cell phones. Combined take home of about $55k per year, with a 3% annual bump. We have a $5k emergency fund.
My wife has a Roth IRA, and I have a Traditional IRA (via Wealthfront, both at a 5.0/10 risk level). We also work the same job, which matches 3% for a 401k and contributes 7% into an MPP.
We were paycheck to paycheck until 2017, so we’re really just getting started on saving for retirement. Any advice on what we could do different to save for a relatively comfortable retirement in 20-25 yrs?
Here’s my situation for those willing to give advice:
35 yrs old. Married w/2 kids. No debt. No monthly bills, besides internet and cell phones. Combined take home of about $55k per year, with a 3% annual bump. We have a $5k emergency fund.
My wife has a Roth IRA, and I have a Traditional IRA (via Wealthfront, both at a 5.0/10 risk level). We also work the same job, which matches 3% for a 401k and contributes 7% into an MPP.
We were paycheck to paycheck until 2017, so we’re really just getting started on saving for retirement. Any advice on what we could do different to save for a relatively comfortable retirement in 20-25 yrs?
This post was edited on 1/3/19 at 5:40 pm
9
Posted on 1/3/19 at 4:27 pm to Gpfather
I assumed that you pay about 30% in taxes (which is probably too high), but that would make your total take home about 72k. What do you both do that pays 36k, but offers that kind of retirement? Some sort of government work?
Posted on 1/3/19 at 4:27 pm to Gpfather
Edit your title for better responses
Posted on 1/3/19 at 4:56 pm to Mingo Was His NameO
quote:He said their combined income is $55k/year and his list of expenses does not include a mortgage loan.
I assumed that you pay about 30% in taxes (which is probably too high)
That means with the new $28,000 standard deduction for couples filing jointly, his effective tax rate (not marginal tax rate) is likely around 10% or maybe even less.
Posted on 1/3/19 at 5:32 pm to Gpfather
No house note? No utilities? Food? Clothing? Rent?
What is an MPP?
Are you and your wife contributing to your IRA / her Roth IRA?
Are the contributions to your IRA, nondeductible (may be with the company plans)
How much are you contributing to various retirement accounts?
Plenty of people here can help you, but they are going to need a clearer picture of what you are currently doing, if you want them to opine as to if you should do something "different"
What is an MPP?
Are you and your wife contributing to your IRA / her Roth IRA?
Are the contributions to your IRA, nondeductible (may be with the company plans)
How much are you contributing to various retirement accounts?
Plenty of people here can help you, but they are going to need a clearer picture of what you are currently doing, if you want them to opine as to if you should do something "different"
This post was edited on 1/3/19 at 5:33 pm
Posted on 1/3/19 at 5:34 pm to Mingo Was His NameO
quote:baw, people making a combined 55k aren't paying 30% in taxes.
I assumed that you pay about 30% i
Hell even if that was 55k per person, they're still not seeing near that.
Posted on 1/3/19 at 5:35 pm to Gpfather
quote:
No monthly bills, besides internet and cell phones.
you don't eat? utilities? gasoline? TV? vehicle insurance for vehicles since you do not own a home?
There is no such thing as NO MONTHLY BILLS.
terrible title and may be whacked. two word titles or less are not allowed.
Posted on 1/3/19 at 5:39 pm to castorinho
quote:
baw, people making a combined 55k aren't paying 30% in taxes.
Hell even if that was 55k per person, they're still not seeing near that
He said combined take home so I used that rough number plus FICA plus any deduction that would come out pretax. I would have just rather been on the high end and say he sees 70% after everything is taken out. Like I said, that's probably high.
Posted on 1/3/19 at 5:40 pm to castorinho
quote:
baw, people making a combined 55k aren't paying 30% in taxes.
Hell even if that was 55k per person, they're still not seeing near that.
that is his take home not gross. however, i remember off the top of my head years and years back when i was grossing 41k a year my take home was around 28k. i believe i was in the 28% tax bracket back then.
This post was edited on 1/3/19 at 5:41 pm
Posted on 1/3/19 at 5:58 pm to LSUFanHouston
Without going through our budget, after saving for our normal family needs (clothing, vacation, gas, etc), maxing out both our IRA’s, and giving the 3% to match our 401k’s, we have about $5k extra per year to put towards retirement.
The MPP is a money pension plan.
I do not know if either of our IRA’s are nondeductable. Neither are through our company though.
We do not have any other retirement accounts. This is where I think I need advice.
The MPP is a money pension plan.
I do not know if either of our IRA’s are nondeductable. Neither are through our company though.
We do not have any other retirement accounts. This is where I think I need advice.
This post was edited on 1/3/19 at 6:00 pm
Posted on 1/3/19 at 6:02 pm to Gpfather
I would put it in your 401k to further reduce your taxable income (assuming you have reasonable options in the 401k to choose from). For those who don't want to learn much about mutual funds, pick a market index (S&P 500) with a low expense ratio.
Posted on 1/3/19 at 6:21 pm to Fat Bastard
quote:
that is his take home not gross. however, i remember off the top of my head years and years back when i was grossing 41k a year my take home was around 28k. i believe i was in the 28% tax bracket back then.
You would need more than double that to start approaching the 28% income bracket.
Current bracket for 24% starts at $85k for a single earner and that is after all of the deductions.
Posted on 1/3/19 at 6:27 pm to Gpfather
I think you are in pretty good shape.
No debt
(Company) Matches 3% for 401K
And (company) contributes 7% into a MPP
You don’t say that you and /or your wife are currently contributing to your IRA’s. Keep doing what you are doing and begin to work on maxing out the IRA’s.
I would be a little worried about, “We both work at the same job.” If those jobs are for the same company I’d increase my emergency fund by a great deal. Not much worse than both of you losing your job ant the same time.
No debt
(Company) Matches 3% for 401K
And (company) contributes 7% into a MPP
You don’t say that you and /or your wife are currently contributing to your IRA’s. Keep doing what you are doing and begin to work on maxing out the IRA’s.
I would be a little worried about, “We both work at the same job.” If those jobs are for the same company I’d increase my emergency fund by a great deal. Not much worse than both of you losing your job ant the same time.
Posted on 1/3/19 at 7:12 pm to Gpfather
Is a mortgage on the horizon or do you own outright?
Posted on 1/3/19 at 7:24 pm to Gpfather
Unless your income changes significantly, you wont see retirement in 20-25 years without a large pension. You can get there by 65, but it's going to take consistently saving 10-20% of your income.
Look at the Bogleheads forum (and don't be intimidated by some of the high rollers on there). Invest in low cost diversified index funds - Google the three fund portfolio. Age in bonds is a common adage (35 yo - 35% bonds, 65% stocks).
At your joint income with children, you are paying very little in taxes. I would keep filling up your Roth and contribute at least enough to get the match.
Look at the Bogleheads forum (and don't be intimidated by some of the high rollers on there). Invest in low cost diversified index funds - Google the three fund portfolio. Age in bonds is a common adage (35 yo - 35% bonds, 65% stocks).
At your joint income with children, you are paying very little in taxes. I would keep filling up your Roth and contribute at least enough to get the match.
Posted on 1/3/19 at 7:41 pm to Gpfather
Maxing out your IRAs puts you at $12k per year moving forward. That alone is probably near 20% of your income, especially after 3% to your 401k.
I think you are doing well with that unless you want to retire early.
I think you are doing well with that unless you want to retire early.
Posted on 1/3/19 at 8:04 pm to CivilTiger83
quote:
You would need more than double that to start approaching the 28% income bracket.
yeah now. I am talking about YEARS AGO! pretty sure i stated this in earlier post.
Posted on 1/3/19 at 8:15 pm to CivilTiger83
Good call on raising emergency fund, since we work for same company.
I will check out the bogleheads forum, thanks.
Housing is provided, so no mortgage on the horizon.
I will check out the bogleheads forum, thanks.
Housing is provided, so no mortgage on the horizon.
Posted on 1/3/19 at 8:29 pm to Gpfather
Housing provided by who? You or the company?
Posted on 1/3/19 at 8:39 pm to Gpfather
Definitely stretch emergency budget some since the added risk of same employer. If you want you can mix in some short term Cd's or MM account to get a little added return on your emergency savings. Look into a HSA account if you are able too. (It is the best investment vehicle available in the US in my opinion)
Adding to your 401k contributions is probably next. If you still have money left over two other options are looking into and starting a 529 college plan for your kids if you want to help them later on or starting a taxable investment account.
Adding to your 401k contributions is probably next. If you still have money left over two other options are looking into and starting a 529 college plan for your kids if you want to help them later on or starting a taxable investment account.
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