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$1 million by retirement


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This isn't the first time I've read/heard about saving at a young age. I saw this link on yahoo so I thought I'd share. I guess I have 3yrs to save up 20k lol.

Actually I've been wondering the best place to put saved money and get interest from it, 3 cents from my bank isn't going to get me anywhere.

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That's pretty much the question everyone in the world would like to know

If you are really interested you want to invest it, not save it.

You should do some online research on bonds and such...

If you have any rich friends, ask them what they do with their money.

I really don't like to consider it, 'cause it's not mine and I want no part of it, but my family will be well off financially by the time I retire because of Alex's inheritence.  But that's Alex's, not mine.  I'm striving to build up my own savings for retirement so our children can have his inheritence after we croak.

I'm not really shooting for a million, but I would like a few hundred thousand stashed away somewhere, which is why after Alex finishes his trade school I'm shipping him off to college to study finances.  He's interested in that sort of stuff.  I'm interested in exchanging my dimes and nickels for quarters so I can get a gumball.
By the time those of us in our 20's retire, we are going to need more than $1mil.  With the rate of inflation $1mil will really not be that much in 35 yrs, in fact when you think about it, it's really not that much now :)
I wonder if I could save a billion.......that's what it gonna take by the time I retire.

I agree, RD. Looking at inflation and the cost of living, it's expected that people in our twenties will need four times that amount just to make it by!

You're talking $4MM.

And it must be great to be able to afford to stash away $10 or $20 grand by the time you're 26, but I'm still just trying to pay down debt from having to start my life!

well to be honest there is no such place...I mean there are IRA's and other things(by the way I don't just fight I'm a financial analyst).

But to be honest if you can save 23-28,000 by the age of 32 or 35 then you will be on your way to that million dollars by retirement.  I personally think that the 401K is the way to go especially if your job matches a certain percentage.  lets say a young person contributes 225 in her 401K every month...that 2700 dollars a year...and that's only about 6 percent if you are making about $48,000 a year...personally I would max out my 401K to 15% (usually the norm) which is roughly 1000 per month. This will allow you maximum savings...and you'll be in a lower tax bracket as well.  Not only that, but invest you 401k in some of the available mutual funds or in the market itself.  I personally like the mutual funds for the 401K, because they are diverse. You want your portfolio to include a good number of things so that you don't drown when the market takes a dive.  Bonds...Stocks (short-Term)...overseas...Fidelity Asian.....Oakmark.... These funds have shown very very good performance over a2-10 year period.  NOW IS THE TIME TO BUY...I would have said this earlier, but it's till a better time to invest than not.  as scary as it may be...the young generation like myself has the advantage of being able to lose money, and recover quickly because of all the years ahead of us.

Look I have debt too, but some of you need to bite the bullet, and save more...it's the only way...I got rid of 2 credit cards last month, and the money I was using every month to pay them, I moved right to my 401K...that's about $300 more per month in my 401K....so think about it that way.

you cannot just take money and put it in your 401K...it has to come form your paycheck usually pre-tax.  Increase your contributions, and increase your investments.  just 1 month ago I was down 300 for the year in my investments, and I'm up quite a bit right now....when this market moves, you will want to be on the bandwagon.

also, the housing industry is so terrible right now, you could get a house that was 300,000 2 years ago for $170,000 in some places. NOW IS THE TIME TO BUY.  appreciation is right around the corner...but patience is a virtue.

you lost me eddie but thanks lol

don't even know what 401k is, is it in Canada :s?

The article also assumes a 10% return on your investment, when's the last time the market went up 10% in a year.  I started a Roth IRA 7 years ago which has averaged <1%/year.

lol...no....here:

 

The 401(k) plan is a type of employer-sponsored defined contribution retirement plan under section 401(k) of the Internal Revenue Code (26 U.S.C. 401(k)) in the United States, and some other countries.

A 401(k) plan allows a worker to save for retirement while deferring income taxes on the saved money and earnings until withdrawal. The employee elects to have a portion of his or her wage paid directly, or "deferred", into his or her 401(k) account. In participant-directed plans (the most common option), the employee can select from a number of investment options, usually an assortment of mutual funds that emphasize stocks, bonds, money market investments, or some mix of the above. Many companies' 401(k) plans also offer the option to purchase the company's stock. The employee can generally re-allocate money among these investment choices at any time.

this is the wiki definition...to explain it in simple terms it's a fund that you put some of your hard earned money into BEFROE TAXES, and you can either choose to just collect money in the account, or invest some or all of the money in the account...so it's like a savings account in a bank so to speak.

 

10% in a year hmmmmmmm...not too many but over a 5 - ten year...then that's a little more common.  oops sorry your said market...I thought you were talking about individual funds.  yeah the market..phew...that's not going to happen right now....lol...that's why they are trying to give us cash to try to stimulate the economy...if you make a certain amount of money, and you filed your taxes on time...be on the lookout for a $600 check in the mail.  Obviously some people will not get it because they make too much, but for those who I think are 80,000 and under you will get 600, and I can tell you exactly when you will get your money.

At the very least you should contribute to your 401K as much as your employeer matches.  For example, if your employer matches 5%, you should contribute 5%, so 10% is going into the 401k. 
I can tell you exactly when you will get your money.

About that? lol

On their list I noticed direct deposit people will get their return first. Do you know if that means people who get their work checks direct deposited or is it for people who got their tax refund direct deposited?
Really? I thought it wasn't going to be until May? yippie....although it's just going to some bills :)

correct;however...my company doesn't match anymore, and if you find yourself in this situation..15% should be your goal.  It's not as confusing as it sounds, but it is worth it.  there are other things that you can do with the 401k...like use ti for tyour first house purchase, you can borrow from it which I do not recommend (you will have to pay this money back on a monthly basis, but you are just paying yourself back...even the interest if there is any goes bakc to you as well, but it's a definite set back.

Typical plans allow you to borrow up to half your vested balance (50%), but not more than $50,000. You usually must pay the money back, with interest, over five yearsif it's alot of money, but if not, then you can choose the amount of years you want to pay the money back; But, because you are paying the interest to yourself, it isn't an additional cost. Just think of it as forced savings. If you don't repay the loan, you will owe income tax and a 10% early withdrawal penalty.

Sounds like a pretty good deal;but remember i said you'll lose out?... You are giving up the tax-free compounding of the money you withdraw. That could lead to a signficantly smaller nest egg come retirement. Also, if you leave your current employer for any reason, you will probably have to pay the loan back immediately or face taxes plus a penalty. so taking out 3,000 could set you back 25,000 in the future...

Yeah, the direct deposits will be done first starting at the begining of May and then the mail checks will be sent out acccording to the last 2 numbers of your social. So those will be sent out in May through June.
Original Post by missy81:

I can tell you exactly when you will get your money.

About that? lol

On their list I noticed direct deposit people will get their return first. Do you know if that means people who get their work checks direct deposited or is it for people who got their tax refund direct deposited?

 Tax refund direct deposited....for sure.

Thank You :)

Market watch, Yahoofinance, fidelity, and smartmoney ....are all good sites that FULLY explain all of this in explicit detail.

Eddie, you're a smart man, I gotta ditto his advice.

While I'm 27 and nowhere near maxing out my contribution to my 401K, I've been contributing for over 5 years and have a pretty good start on building it up. When my husband graduates from college this December and starts working full-time, I plan to dramatically increase my 401K contributions.

I don't think social security will be gone by the time I'm eligible, but I think it will be dramatically reduced and the program will be changed somehow, so I try to do all my future planning assuming nothing from that. Anything I get there will just be a "bonus."

 

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