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What else should I be doing for retirement?

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jcp988
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What else should I be doing for retirement?  Reply with quote  

My wife and I have always tried to live below our means so that we can set ourselves up for success later in life. I'm wondering if there is anything else we can do to set ourselves up better. We are both young, 28, and started saving for retirement 4 years ago. Although at that time we could only afford a little over $100 a month. We don't have debt, expect a mortgage which we always pay extra so that we can pay off our house sooner.

Here's what we are doing:
- I put $5,780 a year into a 403b (includes employer match)
- My wife puts $3,600 a year into a 401k (includes employer match)
- I have an other 403b from a previous employer. Should I roll that over into my new one?
- My wife has another 401k, should she roll that over?

Is there any benefit/downside to rolling old accounts into new accounts?

Is there anything else we can start doing?
Post Thu Dec 15, 2016 1:52 pm
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oldguy
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quote:
$5,780 a year into a 403b (includes employer match)
- My wife puts $3,600 a year into a 401k


Start by determining your goal. Eg, is the goal $5M at age 65, $2m at age 55, etc. Than back calculate thew required input.

If you keep investing $9380/yr, and using the longterm average return of 11%/yr you will have $3.2M at age 62.

quote:
I have an other 403b from a previous employer. Should I roll that over into my new one?
- My wife has another 401k, should she roll that over?


No. Instead, open a Rollover IRA at a fund company (such as Vanguard or Fidelity). That gives you the freedom to buy whatever you want (w/o the usual 401/403 constraints). Everytime you chage jobs, roll the 401/403 to your IRA. Ultimately, you will roll your last 401/403 into that account. (You don't want to leave a trail of old 401/403 accounts - 20 years after retirement you'll see old employers in the News - mergers, name changes, closures, yada - you don't need that).

quote:
Is there anything else we can start doing?


You are doing great, the keys to the magic of compounding is 'time & return' - you have 30 or more years for wealth-building before you transition to wealth preservation. Just set your family goal, adjust the $9380/yr to meet it, and be sure to use 11%/yr products (or adjust accordingly if you choose 10%, 8%, etc).

You might read 'The little book of common sense investing' by John Bogel'. (As I read it, I realized that's what I did for about 40 yrs to become wealthy). It's a quick read, costs about $15, and it's an excellent summary/recipe of how it's done.
Post Thu Dec 15, 2016 4:05 pm
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ken-do-nim
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If you have any kids, don't forget the 529 plan. Actually, if you plan to have kids, I think you can start a 529 plan in your own name, then when the first child is born, switch the plan over to him or her. I don't know anyone who has ever done that though.
Post Thu Dec 15, 2016 6:49 pm
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bob5000
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I'm a new member and plan to ask my own question in a few minutes, but your question rang a bell.

You're doing well now. I'm retired now and my wife is getting ready to retire. We also lived beneath our means all our lives and saved the difference. In fact, we lived cheap to very cheap. For example, expensive nights out were rare, as were expensive vacations. While we plan to travel soon, because we can afford to now, had we spent on wasteful events or vacations that flushed thousands down the drain, we probably couldn't afford to today. Learn to shop, buy some things used, get an education in things so you don't pay retail for everything and waste a lot in the process.

With Trump hopefully flushing the Federal Reserve so that they go back to theories that allow interest to be paid and earned once again, you will be able to earn a safe return once again. The stock market may hopefully return to a place that reflects investment values rather than asset inflation. If this happens, you can expect to see your savings grow using mutual funds.
Post Tue Jan 10, 2017 1:41 pm
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