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Old 11-29-2017, 06:39 PM
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Default Is this a good amount of saved money?

I have been almost 3 years into my 1st professional job and I've calculated my total savings including retirement accounts is just around $100,000, roughly half between savings and half between retirement.

Does this sound like I'm on the right track? Assuming my income was static/only followed inflation, linearly I would need to continue working another 60 years to save up about $2 million in combined savings / retirement accounts (assuming $33,333 a year saved total). That takes me far past the high end of retirement, far older than 67. Does interest from capital gains and dividends really make up for that, otherwise I don't see how even late retirement is possible.
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Old 11-29-2017, 08:07 PM
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Whether that's a good amount to have saved depends on how much you earn. What percentage of income are you saving?

Your math is off on your projection. If you save $33,333/year and earn an average of 6%/year, in 30 years you'll have $3.4 million.
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Old 11-29-2017, 11:13 PM
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Seth, Sorry about the string of questions but there are some really knowledgeable participants here and they need facts to offer helpful suggestions. Are your retirement contribution invested in an employer's plan? Does your employer offer any matching contributions? How much are they charging to manage your account? When is it 'vested.' HR can tell you those facts. What is your specific investment allocation of retirement sums and general [non retirement] savings? Are you also operating a ROTH account to the allowed income criteria?
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Old 11-29-2017, 11:28 PM
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I don't know how old you are, but that sounds like a fantastic start. Pat yourself on the back and keep it up! Compounding is considered one of the wonders of the world. You just want to make sure you are saving smartly and I'm sure folks here would be happy to help with that.

One thing to always remember is if at all possible, ALWAYS sign up for short and long term disability insurance through your job even if you have to cover the cost yourself. Take this advice from someone who was at the peak of their earning when a chronic debilitating illness hit. I left my office at around 10-11AM and never walked in again. No one ever knows what will happen to them.
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Old 11-30-2017, 07:44 AM
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Yes, gains and dividends really do make a difference. I stopped contributing to my retirement fund 18 years ago and the balance has doubled since then. I'm positive that I could have done a lot better if I had paid attention to it, but I have only recently rebalanced and moved money around.
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Old 11-30-2017, 08:12 AM
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Quote:
Originally Posted by Gailete View Post
One thing to always remember is if at all possible, ALWAYS sign up for short and long term disability insurance through your job even if you have to cover the cost yourself.
Be careful with that. If you have to pay for disability insurance yourself, look into buying your own coverage instead of getting it through work. When you own the policy, the proceeds are tax-free. When your employer provides the coverage, the proceeds are taxable. Run the numbers and see which way makes more sense.
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Old 11-30-2017, 10:30 AM
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I'd say that $100,000 saved in three years is pretty good.

Unless you are retiring in 6 months or you earn $20 million a year, then I'd say you are doing well at saving.
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Old 12-01-2017, 07:37 AM
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Compounding of interest is a powerful tool, more so if you are young and have a lot of time.

Whether or not you have a good amount saved depends on your age, your income, your expenses (lifestyle), your net worth (do you have debts?), etc.
There are a lot of variables. But at a glance, if you are young, have an average income and average expenses, and no debts, then I would say that yes you are off to a good and early start.
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Old 12-01-2017, 09:38 AM
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Compounding of interest is a powerful tool, more so if you are young and have a lot of time.
It does certainly add up over time. This isnt a compounding interest story but does reflect how important it is to start early. The markets have been on a tear this year so its a little out of whack...but for the month of November my accounts grew by $16,000. I only contributed $1500 to my retirement accounts that month. Around 3.4% returns on $473k (retirement/taxable.)

The way I look at it even if I cant continue to max my 401k each year...realistically I probably dont have to. Im young enough and theres enough money in the pot to grow over the next 20 years.

Again...I realize the market isnt always like this so its easy to say how great things are...but you can see by starting early how beneficial it is.
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Old 12-01-2017, 10:57 AM
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Compounding is powerful. 12 years ago we had $2k and now we have around $775k in retirement savings. Maxing out yes the 401k and 2 IRAs. But still that's a lot of heavy lifting done for us. We're definitely on pace to be completely FI in 5 years.
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Old 12-01-2017, 11:44 AM
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Compounding is powerful. 12 years ago we had $2k and now we have around $775k in retirement savings. Maxing out yes the 401k and 2 IRAs. But still that's a lot of heavy lifting done for us. We're definitely on pace to be completely FI in 5 years.
Dang, I probably had $50k 12 years ago and I'm only up to $690k now. Of course I only have a 457 account and one IRA, but still you're making me feel like a slacker.

Of course if you add in my taxable accounts, I'm up over $800k, so maybe I shouldn't feel too bad.
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Old 12-06-2017, 03:56 PM
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Originally Posted by disneysteve View Post
Be careful with that. If you have to pay for disability insurance yourself, look into buying your own coverage instead of getting it through work. When you own the policy, the proceeds are tax-free. When your employer provides the coverage, the proceeds are taxable. Run the numbers and see which way makes more sense.
You are right about that Steve. I was able to sign up and get Short Term Disability through my job, but I paid the full cost myself (I was a contract employee) so mine wasn't taxable. I think I got something on the order of $10K+ over 6 months. The absolute most that I had paid for the policy was $460. I think it was a lot less, but don't have the paperwork to double check the numbers at this point.

My husband had a Short Term disability policy when we married that he was paying himself. When I saw what he was paying and what the benefit would be, and how hard it would be to prove he was disabled, we ended up canceling the policy. It just cost him too much for a potential $400/month. On my policy I got just about $1700 (with no taxes or any kind of money taken out of the check) each month. I felt bad that I hadn't had a chance to get a Long Term Policy but that wasn't being offered.
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Old 12-06-2017, 04:59 PM
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My husband had a Short Term disability policy when we married that he was paying himself. When I saw what he was paying and what the benefit would be, and how hard it would be to prove he was disabled, we ended up canceling the policy.
I pay a stupid amount for my disability coverage but at this point, I'm not dropping it. I'm more likely to become disabled the older I get. The bright side is that I know I can drop it and lose that expense when I retire.
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Old 12-06-2017, 05:21 PM
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I pay a stupid amount for my disability coverage but at this point, I'm not dropping it. I'm more likely to become disabled the older I get. The bright side is that I know I can drop it and lose that expense when I retire.
You are so right about that. I had gotten hit with a virus as well as shingles about two months before my whole body tryied to implode on itself and didn't help to have a doctor not entirely ambitious to try to figure out what was wrong with me. As one point we asked if I might have fibromyalgia and he just said it was too hard to diagnose. Case closed. Guess what my RA doctor says I have along with the RA? LOL except it isn't really funny. When I left my office in horrible pain one day, I sure never expected that I would never come back again. That is why we get insurance. At one point I had a discussion with a young lady who declared that since she took good care of herself, exercised and ate right she didn't need STD. I guess she never thought of what could happen if she went skiing or all those other sports that healthy folks do and get injured doing them!
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Old 12-06-2017, 07:27 PM
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I had a discussion with a young lady who declared that since she took good care of herself, exercised and ate right she didn't need STD. I guess she never thought of what could happen if she went skiing or all those other sports that healthy folks do and get injured doing them!
The same can be said for all of the folks who think they don't need health insurance because they're young and healthy. That's true, until the instant that they're not anymore. A simple slip and fall at home can have devastating consequences. A perfectly healthy person can suddenly develop appendicitis or a kidney stone. My cousin was in her 20s when she was diagnosed with her breast cancer. Stuff happens. That's why insurance exists.
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Old 12-06-2017, 08:01 PM
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The same can be said for all of the folks who think they don't need health insurance because they're young and healthy. That's true, until the instant that they're not anymore. A simple slip and fall at home can have devastating consequences. A perfectly healthy person can suddenly develop appendicitis or a kidney stone. My cousin was in her 20s when she was diagnosed with her breast cancer. Stuff happens. That's why insurance exists.
You've seen it all and I've seen alot. My oldest worked at the same place I did and when he called off sick, my mommy spidey sense jumped in. He was my kid that went from normal to a temp of 105 in about 5 minutes flat. Finally I went to his place to check him out. He was complaining of pain on his entire right flank. I finally took him to the ER where we sat forever and he just kept getting sicker. They finally saw him and sent him in for a scan and when he came back people were hopping around at that point. I knew it was bad when the doctor poked hie head in the door and asked when he had his kidney removed - UH NEVER! Next thing I know I'm hearing the sad facts, that not only did he have appendicitis, he was born without a kidney on that side, and several other very bad pieces of info. The whisked him off for surgery at 2 am and when the surgeon came out to talk to me, he said my son had the largest appendix he had ever seen, it was so large it went all the way up to his gall bladder and then looped around on it's way back down! He had heard of only one larger! My son looked like he had had open heart surgery as they had to completely open him up to get it out. He then spent a week in the hospital on antibiotics. The point of all this? Can you imagine his hospital bill? He had just that weekend become eligible for health insurance through work and my boss spent I don't know how many hours on the phone getting him signed up retroactively to 1-2 days before the surgery. It was nice to know that he only had one kidney when a few years later he called with kidney stone symptoms where they had to do surgery to get them all out so he didn't lose the kidney he actually had.

We all need health insurance! One of the nicest things about going to college in Canada as I was on socialized medicine for those 4 years. Didn't have to worry about booboos.
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