How many people actually put money away for retirement each month/year?
 

Not under your mattress or by buying a couple nice cars. Not playing the stock market or buying gold etc...

But actually max out IRAs each year, 401Ks if you work for a company, or do Annuities, or other investment products that grow tax deferred, year after year.

I started an IRA in January :thumbsup

Traditional IRA or Roth IRA?

Traditional

I have a 401(k) and have been thinking about a Roth IRA but I'm going to hold off until I take care of a few more things.

SEP-IRA here.

I don't. IRA's at minimum is something I definitely need to setup in the near future. Just read your other thread on the GFY Educational Series, definitely a good read filled with lost of valuable information. Thanks for sharing! :thumbsup

Have been for years,gotta always think of the future

I have two union pensions coming to me when I retire, but knowing me,I'll work till I'm 80

I used to store money away in my 401k like a good lil squirrel. Did the max amount allowed for about 3 years. The ballance dropped down to less than 50% of what I put into it when the market tanked the other year. I tried to pull it out of the individual funds when things started going south and just let it float as a ballance (usually they shift it to a money market until you reinvest) but the paperwork on that shit takes a dogs age, especially when everyone else in the world was going crazy at that same time ;)

About this time last year I was really fucking pissed about it, because as much as I saved in my 401k I also put a bunch towards the principal on my mortgage. If I had put it ALL down on the mortgage, I wouldn't have had a mortgage payment anymore. Hindsights 20/20.

I pulled half out last year, the other half has bounced back a little, but I'm still at a net loss. Thinking about closing the account and shifting it to an IRA with TD Ameridtrade, this way I can have more control over it and can move it around as I see fit.

The market hasn't been that good to me lately, but it hasn't really been that good to many. I haven't totally lost faith in the market, I still think there is money to be made, but I don't really have any time for research at present. I still think VICEX looks good, I think ait's poised to snap back as the economy grows- http://finance.yahoo.com/q?s=vicex

Anyways, that's my two cents.

NP, trying to get a good feel for where everyone is at here before I start typing up the next one.

Any financial planner worth anything will tell you that you have to protect yourself first. Health Insurance a must, Disability Insurance, and Life Insurance.


Those of you doing a traditional IRA. Do you really need the tax deduction? If you are self-employeed you have a lot of other things you can write off for the deduction. Instead of a traditional IRA do a Roth IRA.

I'll explain the differences between the two types of IRAs.

Traditional IRA
Tax Deductible
Grows Tax Deferred
When you take it out, you pay taxes on it.

Roth IRA
Not Tax Deductible
Grows Tax FREE
When you take it out you pay no taxes on it at all.
Can't do a Roth if you make over 160K a year. However, the rules have been changing and you can now convert traditional IRAs to Roth IRAs.

You can't beat a Roth IRA. It's the best retirement plan offered. The only one that you don't pay taxes on the gains and since you didn't take the deduction on the principle, you pull it out 100% tax free.

In previous years I did Traditional IRAs because I couldn't do a Roth, but I am converting them all over to a Roth IRA this year now that you can do a conversion. There is a little more to it but that is the gist of it.

IRA, stocks mutual funds CD's

I had a SEP plan until now. With the collapse of the affiliate model last year I made 200,000 dollars LESS than I did the year before. Soooo....I just cashed in my SEP to pay my fucking 2008 taxes. And now I still owe $40,000 on my 2009 taxes, and I haven't yet been able to put aside money for my first quarter taxes.

So no. I no longer have a retirement fund. That was a luxury for the time before piracy ended the need for people to buy porn. If and when that situation is rectified then yes, I'll re-up my SEP plan again.

Funny how I had to take that money to pay my taxes...and of course got PENALIZED for taking the money on this years taxes!!! And now they are going to raise my taxes because "people that make more than $250,000 can afford it"

Did I mention our govt. sucks?

Sep-Ira which isn't doing the best

I max out my RRSP's (your 401k equivalents) every year and have a corporate pension plan setup as well now.
WG

I've never had a 401K but everything I have learned and heard about 401K's is ONLY do the match, if they offer one. If they will match your contribution up till a certain point then do it, you can't pass up free money. But any amount beyond that invest in something else.

One of the problems with 401K plans if that you don't have any control or very many options. What was your 401K invested in, sounds like mutual funds? You live and die by the market.

There are other options you can invest in like fixed and equity index annuities. Equity Index annuities are cool because they give you a range (floor with a ceiling) but you have to keep them in for certain periods of time etc... One I am looking at now has a 7.2% guarantee each year with a max of about 12% with a 10 year commitment. So as long as I keep my money in for 10 years the market can tank and at worst I will double my money.

Investing money is good, but don't forget the big picture. You have to take everything into account.

Ouch that sucks. You can build it back up. How old are you ?

That's the wild card when it comes to retirement, your Age... because of the power of compounding interest. The younger you are the more time you have for your money to compound. It's like what the credit card companies do to us but reverse in our favor. The money snowballs the longer you let it keep compounding.

Here is just a rough example to show the power of compounding interest. The interest rates don't matter, look at the difference between each age.

20 year old (8% rate) saves $217/month for 45 years.
Total Contributions: $117,000
Total at age 65: $1,004,767

30 year old (8% rate) saves $500/month for 35 years.
Total Contributions: $210,000
Total at age 65: $1,033,836

45 year old (8% rate) saves $1,833/month for 20 years.
Total Contributions: $440,000
Total at age 65: $1,006,745

Note the spread between total contributions and total amount. The 20 year old will have his money double 10x by 65 where as the person starting at age 45 will have it double once (basically).

Robbie, and the others who took a beating in the market, you can invest in fixed or equity index products and not have to risk it all. Sure when the market is kicking ass it is nice to make 15,20,25% but when it crashes, so do you. If you want to play it a little safer you can.

Also, it is your retirement, so if you are several years away from it then just leave it alone and dont think about it. I have some money in mutual funds and I watched them go up in 03,04,05,06,07 and then tank and now go back up again. But i am 33 and many years from wanting to get my hands on that money, so don't worry about it, plenty of time for the market to go back up and down again, probably several more times. Over time, we should be fine though.

CDs are good for short term money if you need to stay liquid and potentially get your hands on the money in 6 months, a year etc... If you don't need to touch the money I wouldn't put it in a CD, the rates on them these days can hardly beat inflation plus you have to pay taxes on the interest you make each year (doesnt grow tax deferred).

i do ...

I think a Roth IRA is the best first step for anyone:2 cents::thumbsup

not something I've planned for yet but something I definitely need to start thinking about soon, I'm still fairly young at 32 but the earlier you start the better

Oh christ, people on GFY have turned into my mother.

Roth IRA since 99

lol how old are you? why you say that? do you save any money for retirement ?

Earn a dollar. Save a dollar.

roth is a great id, amazing how many people have no idea what one is

So, you are gonna vote for fiscal conservatives in the future?

I'll be making a lot of investing / retirement planning / insurance type posts in the future, so hopefully more people will learn about it and many other things you can do to save money, tax advantages, protect yourself, etc...

building a site as we speak as well so I can put a lot of helpfull info there too.

I had one a while ago for a few years but then I cashed it out. I need to get one going again as I still have enough time for it to be worth something. I regret cashing out the previous one as it was started at a younger age but I was a dumb kid and needed the cash at the time. It really makes a difference if you start them at an earlier age especially if someone is matching what you put in.

I have an IRA that started off as a 401k. Used to be pretty nice, but fucking VZ cost me tons of actual and much more potential. So no, I do not max that out any more.

Not much, looking to do much more though.

I've never been lucky enough to get a true employer match. One company matched a percentage (something insultingly small, like 2%) and it was instantly converted to company stock. :disgust As shitty as that sounds, in the years before I worked for a public company my employer had a profit sharing plan, which was 100% funded by the company and you became vested based on your term of employment. That was amazing.

I've had 401ks w/ at least 3 different retirement fund management companies. I am not sure how the funds you can invest in are decided, if the employer has any hand in that or
that's all the organization has to offer, but I've only been offered mutual funds. My account that was with The Prudential did the best. I was bringing in on average 20% gain year over year. I can't remember the individual funds I had, but I know most of them were Jannus and Gartmore. That account was forcibly closed prior to the market tank due to the dissolution of the prior parent company that was through, so I chose to roll that into a newer 401k I had through my current employer at the time through The Hartford. This was a mistake. The Hartford's funds that were available really REALLY sucked, some of them were sucking wind in 06.

Since I wasn't getting match I should have set something up to roll the funds into an IRA that I could control, but I was lazy and I have paid the price for it. Probably the biggest bitch of it now is almost anything I do to the account I need to get signed off on by the plan manager and since I'm solo now and no longer working for that company it is a huge hassle. If you aren't an employee and you're not face to face in the office you're no longer a priority. Last time I had to do something I practically had to make threats to get shit signed.

I'm not saying saving for retirement isn't a good thing, just sharing what my exp has been this far with 401k plans in this market. I am confident the markets will return to surpass the high watermarks of just a few years ago and I do feel that if I keep the $$ in there long enough the money will come back to me.

Long term annuities seem to be the best right now since they guarantee growth and have the best rates I have seen. The more money you can move in a lump sum and the longer you are willing to commit to leaving it in there the better you will do. The flip side of that coin is if you need those funds before the maturity date the pentalties are HUGE. If you can pull it off IMHO it seems to be the best safe bet around. Right now there are too many variables in my financial situation, I don't see my situation as stable enough where I can commit to having funds somewhere that I can't touch for a lengthy period of time.

Sep-Ira since 2001

Sorry to hear. Fortunately I haven't had to learn the "in's" and "out's" of 401K first hand. I've just heard stories and been taught about them. The one thing that I've heard every time a 401K was brought up was "ONLY DO THE MATCH". Whatever they are willing to match, do it. You can't beat free money. Anything beyond the match invest into something else.

I'm going to be rolling my IRAs into a Roth IRA using an annuity. The annuity is an equity index annuity with a guarantee of 7.2% a year and a max of 12%, with a 10 year commitment. So at worst, you double your money every 10 years. If you take it out before 10 years there is penalty, but more importantly is you lose the guarantee and would get market value (which could be lower or higher than your principle depending on how the index did that you invested in.) If the index makes 15% you would only get 12% since that was you ceiling but if the index made 0% you would still get the 7.2%.

There are 3 types of options with annuities depending on your risk tolerance.
Fixed - fixed rate (usually lower like 3% and driven by bonds) safest
Equity Index - fixed range (min and max) based on entire index - middle
Variable - no guarantees (no min or max), based on mutual funds, more risky.

You mentioned "if you can pull it off". You HAVE to look at your retirement money as retirement. Once you allocate money to it, forget about it. Don't over do it at the same time. If you have 50K in your bank account, don't put 40K into an annuity for retirement. You need to stay liquid too, have reserves in place, have HEALTH and Disability insurance (see sig ;) Cover your bases with insurance, set up a reserve, then put what you can afford away and forget about it. Then no matter what don't break it.

Personally, if you are self employed and make under 160K a year I would max out your Roth Contribution which I believe is currently $5500 an individual per a year, if you can afford that. Try to put aside $500 a month if you need to. You can't tax write it off like a traditional IRA or most other retirement plans but it will grow tax free. Not tax deferred but 100% tax free. If your Roth makes 100K's over the years in gains you don't have to pay any taxes on that when you take it out like you would in other retirement plans.

sounds like a bunch of well set up bachelors around. Mind spending extra $5 month to fill up my retirement plan? No, seriously you all so kinda believe you are not getting fucked up in the future. Locally we dont trust banks.

what's the penalty for cashing out early 10%?

how are we getting fucked up in the future? Our retirement money isn't in banks btw.

In most cases, yes. Plus you paying taxes on the money as income for that year.

I am diversified between several assets

Brokerage account that is invested 20% in stocks, 60% in Muni Bonds, 20% in High Risk Foriegn Funds
401k Diversified with the majority in income funds, I put in the max up to my companies match.
4 Rental Properties
1 undeveloped lot

This year I will continue to put money in my 401k, plus will be adding at least 2 more rental properties that I pick up foreclosed properties, rehab them and then rent them out. Also, continue to add to my brokerage account.

Well, when the US dollar significantly loses value thats how you get fucked up.

Within the next 5 years I plan to legitimize a portion of my income... At that time I'll open an IRA for tax reasons.

Until then, I'm pretty happy making money and hiding it :1orglaugh

What if I consider myself retired now?

it really is... so much money made in not paying tax on interest earned over the lifetime of the ROTH

You can consider yourself retired now, but will you still be retired a couple years from now :winkwink:

I look at "retirement savings" as Plan B. My business income and other investments like real-estate are Plan A. Plan A can disappear or be sold, money spent etc...

I spent the majority of my money and time on Plan A, making money and investing in real-estate today. A take a smaller portion of my income and sock it away into secure long term retirement plans. If all else fails and my business falls apart, I lose my real-estate because the value tanked and I owe more on it then it is worth, or I can't rent it, sell it for a big loss and blow the money, etc... A lot can happen in the next 20,30,40 years depending on how old you are. However, if you put aside "x" amount each month into a retirement plan, no matter what happens with plan A you still can retire in the future, at which ever age you targeted.

If there is one thing that people in our industry should have learned over the last 5 years is that your income can drop drastically and even your offline investments might become worthless or worse become a liability and cost you money. Just because you making a lot of money today doesn't mean you can retire. To be able to retire you need to have enough SECURE money set aside to pay you "XXXXX" a year to live off of for the rest of your life.

So for you ballers who make (or made) bling bling and dropped 100K on a cool sports car, if you would have instead put that into a deferred annuity, for example one with a min guarantee of 7.2%, your 1 time, $100,000 contribution would be worth:

10 years: $200,416.00
20 years: $401,673.00
30 years: $805,037.00
40 years: $1,613,472.00

So a guy, 25 years old that dropped 100K on a car, or boat, etc... something that is an expense and will become worthless eventually and cost you more money in insurance and upkeep.... if he would have taken that money and invested it as explained above, he would have right then and there guaranteed himself a millionaire at retirement. Even if his business went to crap a couple years later because of piracy or whatever, if the market crashed and he sold off his house pennies on the dollar and lived off of that money for 5 years and then ended up at mc donalds. If the worst worst happened he still retires a millionaire and doesn't have till work till the day he dies, move in with family, etc...

so think about that a little before you go buy that expensive car and enjoy it as much as you can because it didn't cost you the sticker price you paid for it, it costs you millions of times more than that.

I cashed out my 401K years ago. I don't plan on an IRA. I'll be dead long before I retire.

Unless the financial system collapses, banks close, companies go bankrupt,real estate drops to the ground, and the stock market implodes. And that can and does happen.

I am SOOOOOO happy I didn't listen to my accountant 3 years ago and put even more money in the market. I would have taken a severe, severe beating.

No, and I rent too. I dont want to own.
I put my extra money into promoting and improving my 1 main business and its working. I'm making more money and easier, and my bank account is growing bigger and bigger.

I'm too much of a control freak to rely on stocks. You buy them and then have no control over what happens. And looking at the chart above, who wants to wait 40 years to make a million dollars? fuck that.
A solid business that you treat seriously will make more money way faster and be a lot more fun. And someday Ill be able to buy a home and pay cash, instead of putting that money into a mortgage payment. It grows faster for me in my business.
Plus Ill never have kids so no reason to leave anything behind.

Robbie, you can put money into the "market" without taking all the risks. It doesn't have to be in mutual funds, and even if it is there is riders that you can use to guarantee your principle. There is thousands of ways you can do things and a lot of them can give you guarantees or protect your principle. It's all about the financial planner sitting down with his client and finding out their risk tolerance, what they want to accomplish and advising them as best as possible on all of the "what if's".

A financial planner should look at your whole picture as well. They should know how much money you have in the bank, what your expenses are, liabilities, etc... and never have you over extend yourself. You never want to put in more than you can afford. If you get a big lump sum from something else not related to your regular income, then in that case you can take a nice portion of that money and lock it away in retirement. But from a year to year type deal, you need to sit down and take your whole situation into account, plus how much you want to retire with and at what age and figure out a % or amount of money that you need to put away each year.

If someone wants you to put everything you have into retirement they are not looking out for your best interest. :2 cents:

that is how i thought 10 years ago. How old are you by the way?

When I was making 30K a week I laughed at "retirement planning" but thankfully I still paid into it. Retirement is a long ways away, a LOT can happen to YOU and your BUSINESS in the next 20,30, 40 years. You don't think so now because you are doing well. If you don't plan for retirement then you are saying you don't need a Plan B. If you don't need a Plan B then you putting all your eggs in one basket and you better hope that it doesn't fail.

I also am not saying this is " running your business " vs " retirement planning" you have to choose one or the other. Still grow your business, do everything you can to make it succeed and make you more money, but take a small portion of that and diversify and lock it away for retirement. If you still kicking ass 40 years from now and don't need that couple million you saved away over time for your retirement then go take a nice vacation with it or something. But if your business dies off at some point, your expenses increase, you blow money on bullshit, etc.. and then you realize 10 years from now, where the fuck did it all go, I need to go get a day job.... right about then you will realize what I am saying.

Also the numbers I gave above was about buying a sports car vs investing the money for retirement. Trying to show people who BLOW money who haven't saved for retirement yet what impact that money could have if they used it for good instead of just for fun.

You seem to have the "I am indestructible" mentality. I know that one well, it typically happens to guys in their 20s who are making really good money. I was there. It is a great attitude to have for ambition and motivation but really really bad for financial matters.

I've been doing a monthly payment into an investment fund since early 2000, plus a yearly contribution to my RSP's PLUS a few odd contributions to other investments.

After fully retiring from my former career in '98, at a hospital where as it happens I had a very good benefits package and government-matched retirement fund. I soon realized that by being in business for myself no one was going to look after my future for me... and that that was now solely my own responsibility. I hired an investment guy who then handled the transfer of what I had in my retirement fund into a locked-in fund of my own, and he's been working with me ever since to build on it.

A good mix of no-risk, medium risk and yes, even some high risk investments. For me they're all long-term so it matters little to me if some of them aren't doing well at any given time. I've noticed over the past decade that the markets always cycle back.

Will is right. As as a matter of fact I've posted similar threads to this in the past and am always amazed at how many working in Adult come in such threads to argue about it and seem to have little to no regard or care for their own future. "Live like a rockstar today! Fuck yeah! Who gives a shit about 20 or 30 years from now!?"

Not this cat.

if all of that happens, dude we all fucked no matter what. Chances of that happening, very very slim. AND if you don't invest money because you think it might happen, then what happens if it doesn't all crash. You old and broke and working at walmart and everyone else who saved is off on the beach enjoying their golden years.

I also just noticed you said "listened to my account" i wouldn't be taking any advice from an accountant other than on tax issues. Go see a competent financial planner and he can help you.

you made $30k a week? from Hoes? damn. I still dont make that in 2 months.
and whats the assets thing in your signature? are you working as an assets planner now?

and i agree with you on planning in case business goes sour, luckily I always change, i have mainstream stuff too thats growing. If I was only in adult I'd be fucked right now.
I dont need a nice lifestyle, dont have a drug habit or buy nice cars. im perfectly happy living in 700sq ft apartment and driving a honda and taking a few trips a year.