Retirement savings- weird "are we on track" question

[aspentosh]

This seems really weird to ask, because based on all the calculators ever shared here or found on Google we are way ahead... But since I am a SAHM and don't intend to go back to work, I am not sure how (or if?) we should account for two people living off "one" retirement account. 

Deleted numbers

On paper we are doing great. I know that. But is there something we should do to account for two people living off the savings? Or since we are living off one salary now and because expenses like mortgage, 529 savings, etc will be gone by the time we retire, is it ok following the tables? 

[Deleted]

If you can live off one salary now, you can live off one salary then. You could just as easily be two people making $half the very private amount your husband makes each. Unless you plan to magically ramp up your lifestyle when you retire (lol), you're fine.

Now take your bragplaint and sit in the corner.

[aspentosh]

I swear I wasn't trying to post a bragplaint! :-#

I knew we were doing really well, but I am so paranoid about retirement that I have been stressing about this a lot and figured I'd bite the bullet and ask. What you said makes sense, and what I was hoping for

[ssmjlm]

Is the 10% outside of the govt match?

What did you do with your retirement when you left work? Is that rolled into something now?

[aspentosh]

Dec 22, 2014 9:59:41 GMT -5 ssmjlm said:

Is the 10% outside of the govt match?

What did you do with your retirement when you left work? Is that rolled into something now?

10% is what he puts. I think he gets 3 or 4% on top of that?

My retirement account is still in the same place as when I was working. I've been meaning to roll it over to a rollover IRA. H did that with his old 401k.

[aspentosh]

Dec 22, 2014 10:02:18 GMT -5 @starry said:

Well part of the equation is how much was your income and how much savings was derived from that. If I quit today our retirement would look awesome vs my husband's solo income, kwim? My general gut feel philosophy is if you are saving and actively investing 20% of your income to retirement you are about as well prepared as possible.

lol to this question I made $x when I quit.

H has always earned 2x what I have and has always had MUCH better matching. 10% from one company, 18% from another. We've been very lucky, and hence the higher $$ amount at this age.

[SJ]

I think you are doing a great job. I would keep maxing the Roth accounts, and just bump up his contributions slowly as you can.

Do you save outside of these retirement accounts as well?

[thatgirl2478]

Dec 22, 2014 9:52:37 GMT -5 @tokenhoser said:

If you can live off one salary now, you can live off one salary then. You could just as easily be two people making x/2 each. Unless you plan to magically ramp up your lifestyle when you retire (lol), you're fine.

Now take your bragplaint and sit in the corner.

THANK YOU!  LOL

I've had the same question (though we don't make anywhere near x) and this is a good way to look at it!

[aspentosh]

Dec 22, 2014 10:06:24 GMT -5 SJ said:

I think you are doing a great job. I would keep maxing the Roth accounts, and just bump up his contributions slowly as you can.

Do you save outside of these retirement accounts as well?

We do, but not a lot. About $x per month (sometimes more sometimes less). We were able to put a decent amount back into savings after selling our house, so we have a good cushion.

H has actually been saying we shouldn't increase retirement until we can increase general savings, and I just don't know which is right. lol

ETA: we used to do $x per paycheck ($x a month, on average) but had to scale back with the new job due to benefit differences. I would really love to get back to that.

[aspentosh]

Dec 22, 2014 10:13:04 GMT -5 @starry said:

SJ. Hijacking here. Do you think it sometimes makes sense to invest outside of retirement even if you aren't maxing tax advantages and have no specific financial goals? If we have a second we won't be able to save a dime beyond maxing both 401k, Roth, and tax advantaged 529 (I realize FWP). I would prefer to save 5% elsewhere for flexibility. Thoughts?

I support this hijack, although we're not maxing 401k. This is a question H and I debate all the time for our situation. 

[thatgirl2478]

Dec 22, 2014 10:02:18 GMT -5 @starry said:

Well part of the equation is how much was your income and how much savings was derived from that. If I quit today our retirement would look awesome vs my husband's solo income, kwim? My general gut feel philosophy is if you are saving and actively investing 20% of your income to retirement you are about as well prepared as possible.

Starry - are you talking about 20% before matching or after?  We save 15% in my DH's TSP, but then he gets 5% matched by his employer.  Should we aim to increase his savings to 20% so his total savings is 25%?

[SJ]

Dec 22, 2014 10:13:04 GMT -5 @starry said:

SJ. Hijacking here. Do you think it sometimes makes sense to invest outside of retirement even if you aren't maxing tax advantages and have no specific financial goals? If we have a second we won't be able to save a dime beyond maxing both 401k, Roth, and tax advantaged 529 (I realize FWP). I would prefer to save 5% elsewhere for flexibility. Thoughts?

Sure. My hesitation would be if the non-retirement savings aren't earmarked for anything, I would personally prefer the tax benefits and tax-deferred growth of retirement accounts, knowing that you can always pull Roth contributions at any time for any reason with no penalty or taxes. Because that way if you don't need the funds, you are still getting the benefits of retirement savings.

That is assuming you are in good shape and don't anticipate needing a DP or anything else. You also want to make sure your cash flow/budget provides adequately for things like travel, gifts, etc. If it doesn't, then you should probably save more in general savings to cover these things.

Or if you are getting close to the Roth IRA limits, once you hit them you could start saving/investing the $11K in nonretirement vehicles instead of switching over to Traditional IRA contributions. There are lots of options here.

I can tell you that we personally have sacrificed non-retirement "general" savings in favor of the other vehicles, and I have no regrets at all. I haven't run numbers for a second child or anything, but I also wouldn't beat myself up if down the road we ease back on retirement savings. We have pre-loaded them as much as possible for so many years to allow ourselves that flexbility and freedom. I like to live on the edge though and am comfortable with a pretty small amount of pure cash in order to "sleep at night."

[thatgirl2478]

Dec 22, 2014 10:27:03 GMT -5 @starry said:

Dec 22, 2014 10:18:52 GMT -5 thatgirl2478 said:

Starry - are you talking about 20% before matching or after?  We save 15% in my DH's TSP, but then he gets 5% matched by his employer.  Should we aim to increase his savings to 20% so his total savings is 25%?

I don't know really. I feel like 15% is the minimum I would feel comfortable with after match but 20% does so much better on simulations. I basically feel like if you saved 20% (with match) consistently and invested relatively wisely and it still isn't enough, everyone is fucked so who cares. Charming theory I realize.

LOL yeah - I pretty much feel like that every time I think ahead to having to pay for college and even thinking about retiring... of course DH is older than most here.

[AmyRI]

Dec 22, 2014 10:02:10 GMT -5 aspentosh said:

Dec 22, 2014 9:59:41 GMT -5 ssmjlm said:

Is the 10% outside of the govt match?

What did you do with your retirement when you left work? Is that rolled into something now?

10% is what he puts. I think he gets 3 or 4% on top of that?

My retirement account is still in the same place as when I was working. I've been meaning to roll it over to a rollover IRA. H did that with his old 401k.

His match is 5% so long as he's contributing at least 6%. (Feds get 1% automatic contributions, the first 2% you put in is matched 1:1, the next 4% you put in gets matched 1:0.5.)

[Deleted]

great job!

[aspentosh]

Dec 22, 2014 10:36:36 GMT -5 AmyRI said:

Dec 22, 2014 10:02:10 GMT -5 aspentosh said:

10% is what he puts. I think he gets 3 or 4% on top of that?

My retirement account is still in the same place as when I was working. I've been meaning to roll it over to a rollover IRA. H did that with his old 401k.

His match is 5% so long as he's contributing at least 6%. (Feds get 1% automatic contributions, the first 2% you put in is matched 1:1, the next 4% you put in gets matched 1:0.5.)

That rings a bell. The booklet said something about the 1% automatic and I couldn't figure out if that was on top of the other contributions. I gave up trying to get it out of H since he couldn't explain it well, lol.

[bowies]

Dec 22, 2014 10:23:13 GMT -5 SJ said:

Or if you are getting close to the Roth IRA limits, once you hit them you could start saving/investing the $11K in nonretirement vehicles instead of switching over to Traditional IRA contributions. There are lots of options here.

I don't want to threadjack either, but where would you put money if not in a trad IRA?  And where would you put money if you want to save for a DP?

I feel like we should have a New Year's Financial Stupid Questions thread. I would benefit even if no one else did.  

[SJ]

Dec 22, 2014 10:44:03 GMT -5 bowies said:

Dec 22, 2014 10:23:13 GMT -5 SJ said:

Or if you are getting close to the Roth IRA limits, once you hit them you could start saving/investing the $11K in nonretirement vehicles instead of switching over to Traditional IRA contributions. There are lots of options here.

I don't want to threadjack either, but where would you put money if not in a trad IRA?  And where would you put money if you want to save for a DP?

I feel like we should have a New Year's Financial Stupid Questions thread. I would benefit even if no one else did.  

In a non-retirement investment account. So like an individual or joint brokerage account somewhere like Vanguard.

[Yankees21]

I just wanted to say nice work! You guys are on a great track

[aspentosh]

Dec 22, 2014 10:06:55 GMT -5 thatgirl2478 said:

Dec 22, 2014 9:52:37 GMT -5 @tokenhoser said:

If you can live off one salary now, you can live off one salary then. You could just as easily be two people making each. Unless you plan to magically ramp up your lifestyle when you retire (lol), you're fine.

Now take your bragplaint and sit in the corner.

THANK YOU!  LOL

I've had the same question (though we don't make anywhere near $) and this is a good way to look at it!

Sorry to be a scrooge, but could you delete the $ amount?  (heart)

[thatgirl2478]

Dec 22, 2014 10:57:04 GMT -5 aspentosh said:

Dec 22, 2014 10:06:55 GMT -5 thatgirl2478 said:

THANK YOU!  LOL

I've had the same question (though we don't make anywhere near $) and this is a good way to look at it!

Sorry to be a scrooge, but could you delete the $ amount?  (heart)

No problem.  Also deleted the x/2 amount .

[aspentosh]

Thanks for deleting numbers, ladies. I am paranoid about this since I know a lot of IRL nesties and the whole GOMI thing freaked me the fuck out.

lcap- yes, we both max out Roth IRAs. That's all I can do for myself, which blows.

[oswin]

Dec 22, 2014 10:16:07 GMT -5 aspentosh said:

Dec 22, 2014 10:13:04 GMT -5 @starry said:

SJ. Hijacking here. Do you think it sometimes makes sense to invest outside of retirement even if you aren't maxing tax advantages and have no specific financial goals? If we have a second we won't be able to save a dime beyond maxing both 401k, Roth, and tax advantaged 529 (I realize FWP). I would prefer to save 5% elsewhere for flexibility. Thoughts?

I support this hijack, although we're not maxing 401k. This is a question H and I debate all the time for our situation. 

I think it depends a lot on how much of your kids college you want to pay for and when you want to retire. As far as I know, the way college financial aid calculations are done they will happily drain your non-retirement investments before giving you a dime in help, so if you wanted to use that money for retirement it's now gone (or severely depleted). We currently have a surplus in our budget so we do investments with Vanguard, but I've been doing some calculations lately and am realizing we should scale those back and contribute a lot more to 529s for DD and DC2.