Saving For Retirement

I was born in 1990, back when people still relied on pensions for their retirement. Remember those days? I don’t. So I digged up an old picture of a protest. Check it out. Fair pensions for all!

By the time I retire, there will be no social security and I will have to depend on my own portfolio if I ever want to retire.Young adults face some major challenges on our way to financial independence. High student debt and a weak job market is making it hard to increase our piggy banks. I have a friend who has 40K+ in student loans and doesn’t even have any job prospects.

Retirement is at least thirty to forty years away but thanks to the personal finance blog world, I know that if I start early, I will have more! Time is on my side here. And putting money away prevents from having lifestyle inflation. I think its, also, awesome that I am part of a DINKS couple! One of the many advantages of being married is combined retirement funds.

So, I am going to be aggressive on my retirement goal. I plan to max out my 401K. Yes, I am going to be putting $17,000 away. I, also, plan to max out my ROTH IRA ($5,000). I hope to use my bonus to fund my ROTH IRA at the end of the year. This won’t leave much left for my check, especially after taxes and my SPP contribution. It’s going to hurt this coming year, but that means any raises in the future can be all mine. I will not have to worry about increasing retirement contributions! This is a pretty aggressive move. I am not sure if I will regret it or not, but I think I need to do it. I can do this because we currently have no debts (school or cars). Some of the advantages of this plan are:

  • Paying less taxes now
  • Taking advantage of compound interest
  • Meeting retirement goals

Some of the disadvantages of this plan are:

  • Not being able to save as much for a house down payment :/
  • Not being able to buy more clothes or shoes (…maybe this is good)
  • Not being able to break away from the student broke life. It might improve a little bit.

Hopefully, I can become a millionaire sooner too! Because according to Northwestern Mutual, I am going to need more than $1 million to retire some day.

So what do you think? Do you max out your 401K? How old where you when you started? If you haven’t, do you want to?

SavvyFinancialLatina

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7 responses to “Saving For Retirement

  1. I was putting as much as possible towards my 401k and Roth IRA but now I kinda regret it since now I will have to take loans out for school. I have about $30k in savings but that will only cover 1.5 semesters. It’s $40k a year for 3 years :( I could have possibly waited until my 2nd year to take loans out since they got rid of unsubsidized loans for higher education. Now that everything is subsidized, interest starts building up from the day loans are disbursed. Totally sucks. I’d like to try to hold off taking loans out until the last minute but right now I’m out of options.

    I think it’s a great idea to contribute as much as you can towards retirement. My thinking was once you have children and a mortgage – it will be harder to save for retirement.

    • Erika! Thanks for the comment. You could still take out the original contributions from your ROTH IRA. Have you thought about that? It might be better for you to leave it and get a loan. I think it’s awesome that you have 30K in savings! Yeah, loans suck, but hopefully you will be able to pay them off after you get your law degree!
      Your right! Life is expensive. I honestly don’t know how families do it. I am working on our budget right now, and $3,000 is pretty tight. BAHHH

  2. I like Roth IRA the most. I would first like to max that out before tackling my 401K plan. But it depends. Company matching 401K plans are even better ヽ(^。^)ノ.

    • Yeah, my company matching program is really good. It helps reach that goal faster. I like the ROTH because once you retire, all your earning are tax free. Are you planning to max out your ROTH this year?

  3. Pingback: Retirement Contributions Here I Come! | SavvyFinancialLatina·

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