Retirement? Never heard of it

[childofgodharrison]

Finally figured out how to make one of these. We figured we were under-contributing to retirement but yikes... suggestions? FYI - two DINKS under 30 that really like to buy things.

Edit: we are currently in the process of hiring a financial advisor as we are still new to making real people money. It's been fun buying things but need to get it under control with the future in mind.

Edit: jk not getting a financial advisor, thanks everyone! Sitting down tonight to reallocate funds to focus on retirement. Y’all are great!

Edit: miscellaneous spending is me being lazy and not providing granularity on everything we buy (personal products, clothing, pet things, home things, etc.) but generally every month we spend quite a lot on fun things.

https://preview.redd.it/mb5pckbnp7g...bp&s=33a9aa25c38eaa090f368b12af513862bc5b90d1

 

[ladydenise226]

@childofgodharrison If I understand this correctly, you (combined) are earning $174,108 gross salary, plus an additional $45,948 in untaxed benefits (I am not sure what this entails). But you are contributing $6,000 a year to your Roth IRA and $2,040 a year to your 401k. How much do you have in retirement savings right now?

You need to be contributing at least $34,740 annually ($2,895 monthly) to your retirement accounts to retain a similar lifestyle in retirement as you have now.

 

[blueorchid]

@ladydenise226 The extra 46k is probably per diem

 

[childofgodharrison]

@ladydenise226 The 401k should be $322/month and my partner doesn't have a 401k (contractor position). VA benefits. We in total have around 30k in retirement savings, all invested. Still new to being higher earning adults with parents that won't retire so learning slowly.

 

[ladydenise226]

@childofgodharrison I would recommend seriously cutting back miscellaneous spending. Create a 3-6 month emergency fund with your savings, then divert the money you are saving to your 401k and/or IRA; unless you have a major expense coming up.

You each should have an IRA.

I reran the numbers through NerdWallet’s page and it shows that you need $6,125,414 in retirement, based off your income. You will need to save $2,983 a month to meet this. At the moment, you are projected to have $1,875,645 in retirement.

 

[sharone]

@ladydenise226 They likely need less than 6M because the VA benefit will likely not go away but they are not prepared to live on just that and social security and are not investing near enough for retirement.

 

[soapboxer]

@ladydenise226 I always question those calculators because their house should be paid off and that is a large part of their financials. I would think they can retire just find on $4M, do they really need $6M?

But yeah, they are behind on the retirement for sure. And even if partner can't do a 401k there are other retirement options where they can put the money

 

[ladydenise226]

@childofgodharrison Okay, thanks! I also do apologize, I hope I didn’t come across like I was being rude in my comment! If I did, that was not my intention! Tone is hard to convey in text.

 

[kameaux]

@childofgodharrison I’m assuming you have the savings to knock out the home improvement debt, what are the details on that?

Also $170 a month Combined(!!!!) is insane are you shitting me

 

[childofgodharrison]

@kameaux Oops - it should be $322/month (still terrible). It's a 4% match and I contribute 5%. Partner doesn't have a 401k (contractor).

Home debt is a new roof and new HVAC system totaling $38,500. Paying it off in chunks but this is the monthly minimum.

 

[kameaux]

@childofgodharrison Apr%? Might be worth tackling that faster

 

[cbaker06021984]

@childofgodharrison Your partner might be able to use a solo 401k! It's definitely worth looking into.

 

[scientartist]

@childofgodharrison Making roughly $240k a year and only putting $170 a month into a 401k? Biggest face-palm ever.

 

[sharone]

@childofgodharrison you have 3k unaccounted for? All of that should turn into retirement. Ouch. You are way behind. Your husband is a contractor and needs to open up a solo 401k or other vehicle. You don't need roth at these incomes you need more traditional.

 

[childofgodharrison]

@sharone Currently in the market for a financial advisor as we desperately need one lol

 

[sharone]

@childofgodharrison No you don't. You need to put in 15% pretax before the match each on your incomes and invest in a target date fund or a broad index like VTSAX. If you have less than 500k invested you are wasting money on a guy who will be trying to make a commission on your money.

 

[childofgodharrison]

@sharone The current 401k money is going to broad index funds. But, we need to contribute more is what you're saying.

 

[sharone]

@childofgodharrison Yep

 

[qubit]

@childofgodharrison And possibly look into SEP-IRA for spousy.

 

[trailblazer50]

@sharone Why pre-tax vs Roth ?