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daddyjaxx
First Time Poster
Cash: $ 0.25
Posts: 1
Joined: 22 Aug 2006
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| Shouldn't I have more money by now? |
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I'm 40 years old and have been contibuting about 4% of my income to my compay's 401k for about 20 years. My income has gone from ~17000 when I started to ~60000 right now. I currently have right around 200,000 in it with a loan balance of around 20k.
Up until 1998 or 1999 the company match was extraordinary, at times reaching 1.50 per 1.00. That is until the bottom dropped out when we became the first Enron. We bought a company that was fudging their books, needless to say our stock went from over 100 per share to 30 in one day. (We made the front page of USA Today Money that day.) People that were ready to retire canceled their plans for obvious reasons.
Things were bleak for awhile with the stock hitting less than 15, but we are back to over 50 now.  They have cut back on the "extras" they used to give us longer term employees, so I don't see the great growth spurt I used to.
How on Earth am I ever going to use this for retirement? Even if I more than double the amount to 500k, I'm sure my income will be over 100k when I'm ready to retire. Wow....5 years of income.
I keep seeing all these...if you save this much money for this much time it will grow exponentially. I just don't see it......
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Tue Aug 22, 2006 10:15 pm |
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coaster
Senior Advisor
Cash: $ 1357.80
Posts: 6686
Joined: 11 Oct 2005
Location: Wisconsin
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Well, first of all, you won't need nearly as much income in retirement as you think. Second, as your income grows you'll be able to save and invest more. Third, you should be more diversified so you're not tied to the success or failure of your own employer. If they're still giving a match, take it. And then when those shares are vested, diversify into other investments.
If you can use a spreadsheet, run a what-if both on how you've done so far and how you'll end up at retirement age if you keep doing the same. Maybe things aren't so bad as they seem. You should have an increase of 10% per year on average.
To really set your mind at ease and/or to see what you need to do better, you should see a financial planner. See a fee-only person. Look for some letters behind the name like CFP or CFA.
~Tim~
Eye Candy : Why Whimsy
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Tue Aug 22, 2006 11:11 pm |
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BlankenshipFP
Money Talk Advisor
Cash: $ 79.56
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Joined: 05 Oct 2004
Location: Illinois
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Strangely enough, I was able to follow muneepenee this time, and he's right...
First and foremost: You should make sure that you're diversified in your stock positions, and don't hold more than 5% to 10% of any single company.
As coaster says, you may want to consult a financial planner - you can find one near you by going to www.NAPFA.com or www.GarrettPlanningNetwork.com - each of these websites has a "Find-A-Planner" section.
Hope this helps -
Jim Blankenship, CFP®, EA
Blankenship Financial Planning, Ltd.
www.BlankenshipFinancial.com
Standard IRS Circular 230 Notice Applies
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Wed Aug 23, 2006 3:51 pm |
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oldguy
Senior Member
Cash: $ 309.30
Posts: 1481
Joined: 21 May 2006
Location: arizona
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It takes more than 4%, invest the maximum. And use the tax break from the 401k to invest $4000/yr into a Roth IRA.
It takes diversification, don't put it all in one stock. Limit your investment in the company stock to 10%. In 20 years, you could easily have a million.
Mine went from $30k to $868,000 in 15 years. I contributed the max each of those 15 years. That was w/o a company match.
And I didn't invest in individual stocks, I used a Total Market Index.
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Fri Aug 25, 2006 12:38 am |
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jkratze1
First Time Poster
Cash: $ 0.20
Posts: 1
Joined: 29 Aug 2006
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You are doing fine, just increase the amount you save to at least 10% from now on. I'm your age with a similar amount saved. I am saving 13% which includes employer match and should retire a multi-millionaire at age 65. Use one of the financial calculators on the web to check your progress. My favorite is on bloomberg.com at http://www.bloomberg.com/invest/calculators/retire.html .
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Tue Aug 29, 2006 3:16 am |
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more freedom
Full Member
Cash: $ 16.20
Posts: 80
Joined: 12 Jul 2006
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First of all, the money that you are saving will be taxed.
The typical employee’s income looks like this:
Work --- Pay Taxes --- Spend what is left over.
The typical business owner's income looks like this:
Work --- Spend --- Pay taxes on what is left over.
You can have tax advantages if you own a business. Are you tax wise?
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Thu Jan 04, 2007 11:04 pm |
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