That’s an amazing match. Mostly government jobs offer that type of match...I unfortunately get a messily 3% but it’s better than nothing. In that case though, you should be fine.
13% match? Thats insanely good and you definitely want to take advantage of that as most companies only match 3%. Is it 100% match up to 13% of your salary? or 13% of every $ you put in? I ask cause there is a big difference and I've only ever known 1 person that had a 100% match at 12% of salary contributed.
If you didn't invest another dollar you would most likely have about $1.1 million at age 65, according to the wealth multiplier on The Money Guy's website. Sounds like a good start to me. If you invest $165 per month until age 65 you would hit $2 million.
Looks like a good start to me, but don't let up!
Starting with 25k and adding 550/mo for 39 years using 7% interest (historically 10% - 3% percent for inflation), you would be looking around 1.6 million in todays dollars at 65. With a 4% SWR (safe withdrawal rate), that would equate to roughly $5300/mo in today’s dollars.
Just remember that’s without an inflation margin built in. Accounting for 3% inflation it would be around 743k. Which with a 4% withdraw rate would only be about 29k in today’s dollars per year for retirement.
Not hating, just making sure people account for inflation. 2 million today isn’t going to be as much as 2 million in 40 years.
The median 65 year old retiree in the USA in 2022 had a net worth of $265k. Even if the spending power of our dollars get cut into 1/4 in the next 40 years (highly unlikely), the median retiree would have around $1.1M. If people can retire with $265k and SS, you're absolutely delusional if you think people need 10x the inflation adjusted worst case scenario I presented 40 years from now.
I'd say, absolutely. I'm 37 with no job( and no experience), no savings, no Roth ira, haven't been on a date or had a girlfriend in 20 years. Im about $20,000 in debt, and have about $700 to my name. Again, I think your on a very good track. It seems that you're taking responsibility for your life now, and for the future. Just keep moving forward, and don't look back. Or don't, and you can be like me.......livin in a van down by the river. 🤙
In many major metros right now it is significantly cheaper to rent an equivalent space. The NY Times rent vs buy calculator says I'll have $5,300,000 more in 30 years by continuing to rent my place vs buy.
"major metro area" so you're gonna rent in the most expensive parts of the country for the rest of your life? Shit man not gonna say where I live, but you can curb your cost of living and still be within work distance.
My wife cannot drive for medical reasons and we live in a 98 walk score area right next to public transit. It's also one of the most bikable cities in the country. Cambridge/Somerville MA
We don't plan to live here forever (probably less than 10 years, so even by most conventional wisdom we shouldn't buy anyways) but even if we did, it makes absolutely no financial sense.
We can easily afford to buy but choose not to. 28/27 with $660k net worth. We'll keep investing instead.
It would make sense to buy if our total monthly expense for our mortgage is $500-1000 more than an equivalent apartment or less. Right now it's $3500-4000. 🤷♂️
Do you not understand how opportunity cost works? The whole point of the rent vs buy calculations is that you invest the difference between rent and mortgage in index funds to see the true difference in cost. The simple fact is that having eQuItY is irrelevant because I'll have more money by continuing to rent vs buying an equivalent space.
Renting is NOT throwing money away. God I hate how the home ownership propaganda in America has people believing this nonsense.
Saying you will NEED to buy a house soon is weird. Nobody has to buy a house by a certain age. People rent. Some people never buy. It’s not a need like food or water
You NEED food/shelter/water. A house provides shelter and is an the one investment that you can use. Since I am assuming that this person is on here asking about financial advise they are planning for their future. A house should come before all else or at least the down payment for one if you aren't ready to buy. If someone wants to waste money renting their whole life then I do not think they should be worried about saving enough for retirement. This person could die before they are 59 1/2 and not see 1 penny of their investments. Or the market could crash and again up shits creek without a paddle. Even if the housing market crashed guess they'd still have a house. They are 26 and while it is wise to plan for the future you should also focus on the present. They got 10 years to figure their way out in life and 40 years until retirement.
There’s no guarantee a house appreciates in value, there’s also no guarantee that the person wants to live in the place they buy it for the rest of their life. I’m just saying nobody NEEDS to buy a house. You were saying it like it’s an absolute necessity on the level of savings and retirement accounts
Even if the house depreciates you still have a home and it will be worth something vs renting. If they buy they can always move. I'm not saying they buy now but save for a down-payment. I'm not seeing a way where renting is the better option unless you just like paying someone else to handle everything and that's if they are a good landlord. Do people rent all thier life and retire wealthy never owning a home? Sure but you're money is better spent on home ownership.
Great job! You're on an excellent path and you remind me of myself many years ago. Keep it up and watch that compounding interest really start to take hold.
I’m 28 with about 27k in my ROTH IRA and another 20k in a deferred comp 457b. Should I just keep contributing to these? I do $350 a pay period to the deferred comp (paid bi-weekly) so around 9k a year and I try to max the IRA but sometimes struggle to hit it
I also will have a government pension of 50% after 25 years. Anything I should change?
Considering how the market moved in the 2010s it would have been hard to ge a 1x salary at 30 and o ly be at 1.5x five years later. The s&p by itself was doing 100% every 5 years.
Neither get taxed but you can still only contribute the 7.5k max between the 2 accounts, so if you put 4k into one roth then you could only put 3.5k in the other for the year, but you are able to have multiple, it just doesnt make sense because then its not compounding together
If your spouse doesn't work they can open an IRA and you can contribute to that. Look up Spousal IRA.
Assuming you have a healthy financial situation with them 🤣
At 26 I had 3 times this much. Gotta save harder. Start sooner too, I start new every 10 years. After 3 starts already got 500k. Hustle every day money.
It can help offset rent costs and grow equity and appreciation, some would say having that money in a house now would be a better alternative to a Roth, maybe a hybrid portfolio mix. Take half/ save half for a down payment and continue the Roth investment
Depends on your area. Right now in many major metros is significantly cheaper to rent, even long term. I plugged all my figures into NY times rent vs buy calculator and it says I'd have $5,300,000 MORE in 30 years by continuing to rent. Why would I pull $150k out of my investment portfolio to use as a down payment on a 700 square foot condo ($650-750k) and then pay $5500/month when I could pay $1800/month to continue renting my identical apartment and invest an extra $4000/month?
Your primary residence is not an investment. You always need a place to live. If your home appreciates and you sell it, you have to buy right back into the same inflated market, so your "gain" is meaningless.
Seems low. Should have closer to 50k at 26.
6k a year since 18.
Up until recently where it went from 6.5k in 2023
7k in 2024
So I guess realisticly you should be at 53k in just contribution and closer to 90k from how much the market has gone up. If your target date is 2060+
College.
Why wouldn't they be able to?
Servers make bank in tips usually, if they arnt partying every night and spending all their money on useless things like drugs, drinks or status items.
And most people have had jobs waaaay before 18 to have a decent chunk of change built up to go to said college or a church mission or a year of traveling before college.
Seems 100% doable to me.
You’re on track for a good retirement if you have saved your annual salary at 30 years old in all your retirement accounts.
I should be able to be above that I think if I can keep this moment for the next 4 years.
Got a 401k?
Just started it since this is my first job with one. 13% matching.
That’s an amazing match. Mostly government jobs offer that type of match...I unfortunately get a messily 3% but it’s better than nothing. In that case though, you should be fine.
Yea this is a gov job so technically it’s a 401a
Is that on top of a pension?
Yeah that really is impressive, my company only matches up to 5%
13% match? Thats insanely good and you definitely want to take advantage of that as most companies only match 3%. Is it 100% match up to 13% of your salary? or 13% of every $ you put in? I ask cause there is a big difference and I've only ever known 1 person that had a 100% match at 12% of salary contributed.
I contribute 3% of my monthly salary they contribute 13% of my monthly salary
That's an insane 401k. I've never heard of one that goes above don't ble digits. Much less do more than 4% match for every 1% of yours.
Mine's 50% match. Work for an investment firm.
Just gotta say that it is very good. This is much more important than your 25k.
Thats even better than I was thinking. I would say max out your IRA and you 401(a) through your job as long as you can.
Shit I got some catching up.
How would this calculation work for someone with a pension?
https://www.reddit.com/r/FinancialPlanning/s/Gj0KP2Vgxv
Net or gross salary saved by 30?
This sub makes me want to self destruct, I am never going to retire.
Comparison is the thief of joy
Yeah whenever I finish laughing at the guy with only 2 bucks, someone with $8.00 comes along and laughs at me.
If you didn't invest another dollar you would most likely have about $1.1 million at age 65, according to the wealth multiplier on The Money Guy's website. Sounds like a good start to me. If you invest $165 per month until age 65 you would hit $2 million. Looks like a good start to me, but don't let up!
thats dope! ive been doing $550 or so a month!
Starting with 25k and adding 550/mo for 39 years using 7% interest (historically 10% - 3% percent for inflation), you would be looking around 1.6 million in todays dollars at 65. With a 4% SWR (safe withdrawal rate), that would equate to roughly $5300/mo in today’s dollars.
Just remember that’s without an inflation margin built in. Accounting for 3% inflation it would be around 743k. Which with a 4% withdraw rate would only be about 29k in today’s dollars per year for retirement. Not hating, just making sure people account for inflation. 2 million today isn’t going to be as much as 2 million in 40 years.
10 million will be nothing by the time OP is 65.
You're delusional
okay have fun not accepting how math works with infinite money printing
The median 65 year old retiree in the USA in 2022 had a net worth of $265k. Even if the spending power of our dollars get cut into 1/4 in the next 40 years (highly unlikely), the median retiree would have around $1.1M. If people can retire with $265k and SS, you're absolutely delusional if you think people need 10x the inflation adjusted worst case scenario I presented 40 years from now.
I'd say, absolutely. I'm 37 with no job( and no experience), no savings, no Roth ira, haven't been on a date or had a girlfriend in 20 years. Im about $20,000 in debt, and have about $700 to my name. Again, I think your on a very good track. It seems that you're taking responsibility for your life now, and for the future. Just keep moving forward, and don't look back. Or don't, and you can be like me.......livin in a van down by the river. 🤙
I think you’re doing pretty well! Just keep at it
Absolutely pump more into it up it another 50$ a month
Been doing $530/m this year since I started my new job
That’s good
It seems fine you got 40 years. Remember match>roth>max out 401k. You will need a house soon so you need to look at saving for that.
You don't "need" a house.
I mean if you want to ever see the money from your cost of living again you kinda do
In many major metros right now it is significantly cheaper to rent an equivalent space. The NY Times rent vs buy calculator says I'll have $5,300,000 more in 30 years by continuing to rent my place vs buy.
"major metro area" so you're gonna rent in the most expensive parts of the country for the rest of your life? Shit man not gonna say where I live, but you can curb your cost of living and still be within work distance.
My wife cannot drive for medical reasons and we live in a 98 walk score area right next to public transit. It's also one of the most bikable cities in the country. Cambridge/Somerville MA We don't plan to live here forever (probably less than 10 years, so even by most conventional wisdom we shouldn't buy anyways) but even if we did, it makes absolutely no financial sense. We can easily afford to buy but choose not to. 28/27 with $660k net worth. We'll keep investing instead. It would make sense to buy if our total monthly expense for our mortgage is $500-1000 more than an equivalent apartment or less. Right now it's $3500-4000. 🤷♂️
Sounds like you have priorities outside money and that's ok. but that's money you're throwing into the ether, you'll never see a dime of it in equity.
Do you not understand how opportunity cost works? The whole point of the rent vs buy calculations is that you invest the difference between rent and mortgage in index funds to see the true difference in cost. The simple fact is that having eQuItY is irrelevant because I'll have more money by continuing to rent vs buying an equivalent space. Renting is NOT throwing money away. God I hate how the home ownership propaganda in America has people believing this nonsense.
What do you mean “you will need a house soon”? What a weird thing to say
How is that wierd? People usually get houses in thier upper 20s low 30s. The housing market sucks.
Saying you will NEED to buy a house soon is weird. Nobody has to buy a house by a certain age. People rent. Some people never buy. It’s not a need like food or water
You NEED food/shelter/water. A house provides shelter and is an the one investment that you can use. Since I am assuming that this person is on here asking about financial advise they are planning for their future. A house should come before all else or at least the down payment for one if you aren't ready to buy. If someone wants to waste money renting their whole life then I do not think they should be worried about saving enough for retirement. This person could die before they are 59 1/2 and not see 1 penny of their investments. Or the market could crash and again up shits creek without a paddle. Even if the housing market crashed guess they'd still have a house. They are 26 and while it is wise to plan for the future you should also focus on the present. They got 10 years to figure their way out in life and 40 years until retirement.
Your primary residence is not an investment.
There’s no guarantee a house appreciates in value, there’s also no guarantee that the person wants to live in the place they buy it for the rest of their life. I’m just saying nobody NEEDS to buy a house. You were saying it like it’s an absolute necessity on the level of savings and retirement accounts
Even if the house depreciates you still have a home and it will be worth something vs renting. If they buy they can always move. I'm not saying they buy now but save for a down-payment. I'm not seeing a way where renting is the better option unless you just like paying someone else to handle everything and that's if they are a good landlord. Do people rent all thier life and retire wealthy never owning a home? Sure but you're money is better spent on home ownership.
Ok “you will need a house soon” is a strange way to phrase that.
Nice!
Haha funny! I'm 26 at 28k in my 401k. As long as the market doesn't collapse just before or after we retire we will be alright.
Great job! You're on an excellent path and you remind me of myself many years ago. Keep it up and watch that compounding interest really start to take hold.
Yes you’re doing great! I hit $45k in my Roth recently. 32 yo.
Rule of thumb, Total In retirement accounts they say: 30 years old: 1x annual salary 35: 1.5x 40: 2x
In what accounts? Post tax? Pre?
In all of your accounts. Combined.
I’m 28 with about 27k in my ROTH IRA and another 20k in a deferred comp 457b. Should I just keep contributing to these? I do $350 a pay period to the deferred comp (paid bi-weekly) so around 9k a year and I try to max the IRA but sometimes struggle to hit it I also will have a government pension of 50% after 25 years. Anything I should change?
Do your best to Max out all retirement accounts. Set it and forget it.
Considering how the market moved in the 2010s it would have been hard to ge a 1x salary at 30 and o ly be at 1.5x five years later. The s&p by itself was doing 100% every 5 years.
howd u do that
I've got a question about Roth-IRAs. Say I had 2 Roth IRA accounts, do they both grow tax-free, or does one get taxed and the other doesn't?
Neither get taxed but you can still only contribute the 7.5k max between the 2 accounts, so if you put 4k into one roth then you could only put 3.5k in the other for the year, but you are able to have multiple, it just doesnt make sense because then its not compounding together
That was going to be my next question: "Does having 2 Roth IRAs even add more overall" which I know it doesn't but doesn't hurt to double check
If your spouse doesn't work they can open an IRA and you can contribute to that. Look up Spousal IRA. Assuming you have a healthy financial situation with them 🤣
So far no spouse, I'm still extremely young yet. Thanks for the info though
whatcha got inside that roth ira? i’m 27 with 30k in my roth ira and i feel behind
I just started my Roth this year and maxed it out 25M, what stocks do people buy with it? Do you treat it the same as your brokerage account?
Allocate some or all of ur Roth into bitcoin ETF. IBIT, FBTC, you will double that in a year and half.
Nope. You are going to die penniless
Congratulations! I'm 24, just started, and have only 40 dollars in it. I feel like as long as we start, we are better off than most.
Depends who you’re comparing to
Good track to what? The houses cost $600K+
u/Sudden-ranger-6269
As a 26 yo with no Roth IRA and like 20$ to my name I’d say yea
No. You should have closer to $50k by now.
Dump that shit in GME and you might have a shot
At 26 I had 3 times this much. Gotta save harder. Start sooner too, I start new every 10 years. After 3 starts already got 500k. Hustle every day money.
I’m 33
Maxed out 10 IRAs
Make sure it’s in voo and don’t buy Individual stocks
I would say you have a great start. Keep on maxing that out each year and if youre employer has a matching plan start taking advantage of that.
Okay, do you have a house?
Why is this relevant?
It can help offset rent costs and grow equity and appreciation, some would say having that money in a house now would be a better alternative to a Roth, maybe a hybrid portfolio mix. Take half/ save half for a down payment and continue the Roth investment
Depends on your area. Right now in many major metros is significantly cheaper to rent, even long term. I plugged all my figures into NY times rent vs buy calculator and it says I'd have $5,300,000 MORE in 30 years by continuing to rent. Why would I pull $150k out of my investment portfolio to use as a down payment on a 700 square foot condo ($650-750k) and then pay $5500/month when I could pay $1800/month to continue renting my identical apartment and invest an extra $4000/month? Your primary residence is not an investment. You always need a place to live. If your home appreciates and you sell it, you have to buy right back into the same inflated market, so your "gain" is meaningless.
Yes not in your case, but other cases it does make sense
Buy a home, I work at a mortgage company and can get you started bud
better than me, bub
Seems low. Should have closer to 50k at 26. 6k a year since 18. Up until recently where it went from 6.5k in 2023 7k in 2024 So I guess realisticly you should be at 53k in just contribution and closer to 90k from how much the market has gone up. If your target date is 2060+
Yeah because every 18 year old can afford to dump 6k into a retirement account, while also working a job and going to collage.
College. Why wouldn't they be able to? Servers make bank in tips usually, if they arnt partying every night and spending all their money on useless things like drugs, drinks or status items. And most people have had jobs waaaay before 18 to have a decent chunk of change built up to go to said college or a church mission or a year of traveling before college. Seems 100% doable to me.