Retirement Contributions - How Much?

[TommyIV]

Investment returns are a huge factor when working towards financial freedom or a comfortable retirement; but even returns are contingent on how much was invested in the first place. Saving for retirement is not talked about enough especially to the younger crowd who can't imagine that far down the road.

I am curious how much everyone here contributes to their retirement savings as well as where you are in your career. Has your contribution amount changed throughout your career?

I am early on in my career and I currently put away 20% of my income. That percentage has grown over time from a flat 0% a few years ago.

 

[Frixxxx]

Has your contribution amount changed throughout your career?

I am early on in my career and I currently put away 20% of my income. That percentage has grown over time from a flat 0% a few years ago.

Loaded question as goals/setbacks affect everyone differently throughout their lives.

Kudos for you 20%. Hopefully it is diversified according to the risk you are willing to take.

I'm currently above the 50 line and using full catch-up contribution with my 401k efforts, plus some other side stock purchases.

I will retire in 6 years with no bills and a new address....Then sail as much as I want on my boat!

 

[Bullitt]

Sure is a good idea to put the savings in now since the faster you can get to the $100k mark the better you'll be later on. One huge lesson I've learned in investing is the importance of a good savings rate. If one thinks trading or market gains will make up for lack of savings, they're in the wrong state of mind - RE: State pension funds. When someone needs consistent 10%+ returns over the long run to reach their goals, they have not prepared and should consider some cutbacks. Many who come here get it wrong with market timing. Market timing isn't meant to shoot the lights out, but instead it should help to avoid those big March 2020 or 2008-2009 draw downs.

20% is very, very good. Do it for as long as you can but don't put yourself in the poor house like these FIRE lunatics who live off a can of beans a day.

THE book that got me going on investing was Automatic Millionaire. While his math takes only the rosiest scenario into consideration (12% annual returns), his concepts are spot on and it certainly is worth reading. The match really makes a difference over the long term.

Ideally, Bach says you want to hold onto at least one hour a day of your income, which works out to about 12.5 percent of your pretax income, to save and invest. But keep in mind that if you have an employer 401(k) match, you can end up setting aside 15 percent just by taking advantage of the match. Many employers will match 50 to 100 percent of what you contribute into your 401(k) dollar for dollar, up to a certain percentage of your income (often 3 to 6 percent).

https://www.forbes.com/sites/jennif...onaire-david-bach-has-some-tips/#310f927b1128

I maxed out TSP a few years by going with a dollar amount, then when kids came, ended up backing off some and contributed to a Dependent Care FSA for childcare. Also took a different job for quality of life around this time and my earnings didn't catch up to where they were until around 5 years later. (I have no regrets leaving). These numbers do not include the match, but I think I was around 12% back then. Also I cut back contributing to my non-TSP investments until childcare was done. I think I stopped contributing to the Roth IRA for like 8 years. (Yes, the costs involved with raising children are quite shocking.)

Currently TSP is at 15%, Roth IRA was maxed the past three years and will continue. We also contribute to 529's and taxable investing accounts. Earliest I can go is 10 years, but I'll cross that bridge when I get there.

 

[rangerray]

The advantages of contributing early cannot be stressed enough. Early on, I only contributed 5% of my income to take advantage of the matching funds and NEVER moved my money between the funds. About half-way through my career, I began contributing 10% and started paying attention to the market. That's where I've been for the remainder. I've got less than a year to go until retirement, so I don't plan on making any changes at this point. I will likely reach my goals with my account, however, so I'm not complaining and I will continue to manage my account for several years after contributions are halted.

My biggest regrets: Not contributing the max from the beginning and not managing my account until crunch time was nearing. I missed several opportunities, such as what we're living through right now in 2020.

 

[evilanne]

I contributed 10% from the start in TSP, it was maximum you could contribute until about 2000 when they started to increase it and then moved limit to IRC. I think I raised contribution to 14% in 2005, a few years I was able to do the max and then one year with IRC max + catch up contributions before I retired early. I started Roth in 2013 in addition to TSP...I wish I had done this sooner when it first became available. Life is good.

 

[jimijr]

Give til it hurts, your future self will thank you.

 

[dave123]

The max you can afford, assuming your high interest stuff like credit cards are paid off each month as well!