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?