What percent of your income goes toward retirement and/or college savings? - Page 2

[Amys1st]

We max out the pretax retirement contributions annually. We contribute to the 529s monthly. I would like to max out roths for both of us annually but we cannot at this time. We have 130K in retirement and that is after the crash last year when we lost 80K. We are almost back where we want to be.
We are 37 and started in our 20s.

We are contributing to the college savings and when ever someone gives our kids $$ for gifts, that also goes right into the savings. At this point both are only about 5K. We would like to help with the education like our parents did us.

I am a sahparent and have been for almost 8 years. I plan on going back to work in a few years. We want to contribute more to the retirement and college as well as pay off our house in the next 10 years.

[Amys1st]

I should addd, when we started maxing out the pre tax contributions, our net paychecks went up instead of down.

[~Laura~]

We save more than half of our monthly income (total - retirement, fun money, college, etc.). We don't qualify for Roths, but do max our tax-advantaged accounts. The key has been to not increase our living as we have made more money! We could save more - I plan to work on that...

Laura

[O's mommy]

We are so behind! 130k in retirement WOW I'm amazed I think we have 14k. We better do something quick! I wish our mortgage wasn't so much that would free up alot of money but that not really possible. Thanks for the responses.

[mnnice]

Since becoming an adult with a job I have always saved at least 10% (I have always had jobs with old school defined benifit pensions and participating has not been a choice.

In the past 12 years we have saved varying amounts between 10% and 45%. When we were saving 45% we had two pretty decent incomes, relatively low child care expenses, and paid for house so it was actually pretty easy (we had a finite, but not particularly restrictive budget for gas, groceries, household, entertainment).

Right now we are only saving about 11% and as an anxious person it actually sort of stressful for me.

[Amys1st]

Originally Posted by O's mommy

We are so behind! 130k in retirement WOW I'm amazed I think we have 14k. We better do something quick! I wish our mortgage wasn't so much that would free up alot of money but that not really possible. Thanks for the responses.

Not sure how old you are or how much income you have. We started in our
20s and we are close to 40 now. DH also makes 100K or so and has for a while. I might add we live in a metro area and I sah so we are very frugal and live in the black with little to no debt at all times.

[TiredX2]

We save 25-28ish% of our gross income (only DP has a paying job) between retirement and college. Only about 4% of that is college, though (well, 4% of income, not 4% of the 25%).

Originally Posted by Amys1st

We max out the pretax retirement contributions annually. We contribute to the 529s monthly. I would like to max out roths for both of us annually but we cannot at this time.

Can I ask why you contribute to the 529s before you max your Roth? I like to know what other people are considering when they make their divisions.

[Amys1st]

Originally Posted by TiredX2

Can I ask why you contribute to the 529s before you max your Roth? I like to know what other people are considering when they make their divisions.

Mainly because we already have a head start on the retirement (more than most people we know in our age group and above) and we want to build up the college fund(s) for our girls. We know way way too many people now who are in their 20s and early 30s with huge student loan debt. An employee of my DH, her student loan debt is as large as our mortgage. If her spouse also has this debt, that is a bit crazy when you add housing, trnasportation costs, living etc.

We had a good start when we were in our middle 20s because I had no education debt, DH had very little that was settled and paid off before we even were engaged.

Also, I am home at this time and we will max out the roths when I am back working if we still fall in the income guidelines.

[mnnice]

Originally Posted by TiredX2

Can I ask why you contribute to the 529s before you max your Roth? I like to know what other people are considering when they make their divisions.

I wouldn't personally fund 529's before fullying funding Roths. Your can use a Roth to pay for college you can't a 529 to pay for retirement. I think there are lots of ways to pay for college. I can use my current income, my children can work part-time, scholarships, loans (ick), and I can use any savings I have in taxable accounts too.

I am also not convinced that having a first year student at a community or technical college is really any more expensive than having high school senior in a public high school (prom, graduation parties, senior pictures, and trips). People don't usually make any special savings for those things.

[kirstenb]

I contribute 15% of my gross pay to my 401(k) and my work matches 6% of that. I've been doing that since I started working there at 23 so I have never seen or missed that money. Even after all the stock market volatility I have a decent amount in there for someone who is 27. We just started a retirement plan for DH last spring. We have been counting on all his money so we are only doing $100/mo for now, but we'll gradually increase it as he gets raises. Right now we aren't contributing anything for college funds. I would like to put some money aside every month for college eventually, but my priority is retirement.

[kirstenb]

Originally Posted by mnnice

I wouldn't personally fund 529's before fullying funding Roths. Your can use a Roth to pay for college you can't a 529 to pay for retirement. I think there are lots of ways to pay for college. I can use my current income, my children can work part-time, scholarships, loans (ick), and I can use any savings I have in taxable accounts too.

My thoughts as well.

[O's mommy]

Originally Posted by Amys1st

Not sure how old you are or how much income you have. We started in our
20s and we are close to 40 now. DH also makes 100K or so and has for a while. I might add we live in a metro area and I sah so we are very frugal and live in the black with little to no debt at all times.

I am 30, DH is 33. We (I was saving too before SAH) have been contributing towards retirement since our early 20's. DH is making around 85k now, but will be making around 45-50k starting in Jan. when he starts working for himself. We are ALMOST debt free(except the mortgage) but our mortgage is huge-$1460.

[TiredX2]

Originally Posted by Amys1st

Mainly because we already have a head start on the retirement (more than most people we know in our age group and above) and we want to build up the college fund(s) for our girls. We know way way too many people now who are in their 20s and early 30s with huge student loan debt.

We would really like to pay for the kids' education for this reason as well. It is really hard to get ahead/a good start in your 20s when you have the equivalent of a large mortgage payment in student loans.

I *know* the rule is:
401(k) to match
Roth IRA
401(k) to max
college education savings

But we also started college savings first.

Originally Posted by mnnice

I wouldn't personally fund 529's before fullying funding Roths. Your can use a Roth to pay for college you can't a 529 to pay for retirement. I think there are lots of ways to pay for college. I can use my current income, my children can work part-time, scholarships, loans (ick), and I can use any savings I have in taxable accounts too.

We decided to go with this view after we were 30, basically. I would *love* to be putting away more for education, but since you can withdraw Roth contributions penatly & tax free at any time, it makes more financial sense to max the Roths. Then, if the kids need education money we can always tap that. BUT, the govt does not look at retirement savings when considering college financial aid.

[Hannah32]

We save 10% of my gross in a retirement account (this includes a match). I save 20% of my take-home pay as well. Hubby doesn't have a steady job at the moment, but the seasonal/temp work he has done goes into savings 100%, barring expenses related to the seasonal job. When our boy is born, we'll have to allocate some percentage of that 20% to college, but I'm not sure how much yet. I want to provide my children with opportunities, but I don't want them to have to support me someday either!

[freestylemama]

We're financial late bloomers because we've spent all of our lives until the last 2 years in school- currently we put about 10% of our income into retirement and DH's employer matches it. We have almost nothing saved for DD's college. DH currently works for a university and DD can go there for free if he still works there and she's admitted. It's an ivy and I feel kind of badly having that be her college option because most people who apply aren't admitted. Hopefully as our income increases we'll be able to put more away to give her some real options.

[Hey Mama!]

Dh works for a public school (community college) so he automatically has 6.5% of gross pay put into a retirement fund. I had the same amount when I worked at a public elementary school. When I become an actual teacher, I will have 13% of gross pay put into the retirement system. We don't save any towards college at the moment.

[Hey Mama!]

Originally Posted by freestylemama

We're financial late bloomers because we've spent all of our lives until the last 2 years in school- currently we put about 10% of our income into retirement and DH's employer matches it. We have almost nothing saved for DD's college. DH currently works for a university and DD can go there for free if he still works there and she's admitted. It's an ivy and I feel kind of badly having that be her college option because most people who apply aren't admitted. Hopefully as our income increases we'll be able to put more away to give her some real options.

Same for us, although dh works for a community college. But, it has an agreement with several other traditional 4 year schools in the area. So, if he is still there they can pick one of those schools for free or get grants and loans like we did.

[freestylemama]

Originally Posted by Hey Mama!

Same for us, although dh works for a community college. But, it has an agreement with several other traditional 4 year schools in the area. So, if he is still there they can pick one of those schools for free or get grants and loans like we did.

That's so nice! I think the plan at DH's employer is 100% there and then a much smaller percentage somewhere else. We're pretty sure that DH is going to be looking elsewhere in the next couple of years so we do need to get serious about saving for her. It's nice to know this option exists though, even if it's a lot of pressure for her.

[SophieAnn]

DH and I both save the max allowed (tax-deductible) each year towards RRSPs (Registered Retirement Savings Plan), which is 18% of gross income. Each of our employers match up to a certain percentage, so our 18% includes the employer contribution (employers give around 4-6% of gross).

We aren't contributing anything to a RESP right now (Registered Education Savings Plan) as we don't have kids, but I expect we will put away something for our kids (not enough for a free ride though) as both our parents helped us out a bit with tuition.

[SunshineJ]

Originally Posted by O's mommy

We are so behind! 130k in retirement WOW I'm amazed I think we have 14k. We better do something quick! I wish our mortgage wasn't so much that would free up alot of money but that not really possible. Thanks for the responses.

Really, while there are certainly better ways to do things, it's not an all or nothing situation. My dad, for example, never saved a dime towards retirement until he turned 50. Scary, huh? But when he was 50, all his child support payments stopped, the house was paid off and it took little to pay off the car. So at that point he was able to start slugging over $2k a month into a plan for retirement savings. He retired at age 63 and betwen the principal and interest has all that he needs and then some. It's not typical and certainly not what I would recommend, but just because you don't have xx amount by age 35 or 40 it doesn't necessarily mean you're totally screwed either. Just be sure to save back whatever you can per month and increase it when you can. When retirement comes you may not have quite as much as you wanted (or you may, who can predict the interest rates and returns of the next few years?) but at least you'll have something.