We save 18% of my husband's gross pay to retirement. I'm starting to wonder if it is too much. Only because I've been watching YouTube videos of people following Dave Ramsey and saving 15% gross on Baby Step 4.
Our plan is for my husband to retire from the Army with a full retirement pension. This is equal to 50% of his base income, which if calculated today would be about $3,840 per month. It will be higher as he will get promoted at least one more time before he retires. He might also be eligible for more than 50%, but not sure. If so that will make a huge difference in pay as he will have over 32 years of service.
Obviously, there is risk that something could happen that he won't get to full retirement. He is already eligible for a reserve retirement check that would pay out beginning at age 60, possibly sooner. That check would be far less.
I think part of me is wanting to adjust to 15% so I can use the other 3% (which is just under $300) towards the Big Goal. And I suppose I don't have to change anything, as more than half of our retirement is invested in our Roth IRAs. I can take those contributions out any time.
Just thoughts. How much of your gross income do you/did you save for retirement?
18% Gross To Retirement
June 30th, 2017 at 11:30 am
June 30th, 2017 at 12:28 pm 1498825739
June 30th, 2017 at 12:48 pm 1498826917
15% is a number that I use, but I didn't keep good records in those years. We just saved as much as we could once the kids were through school.
June 30th, 2017 at 11:23 pm 1498864984
I think most people get started saving for retirement later than they should, so I would would stick with what you're doing if it's already relatively pain-free.
July 1st, 2017 at 04:29 pm 1498926570
July 1st, 2017 at 06:26 pm 1498933616
July 2nd, 2017 at 03:15 am 1498965342
I have seen some instances of "retirement poor." You can certainly over-do it. & as Carol says, saving up for a home is a retirement savings of sort. Maybe just not as tax efficient.
We do save 15% right now for retirement, but it has nothing to do with any general rule of thumb. It just works out that maxing out our retirement vehicles puts us at 15%. I would be okay with 15% to retirement plus maxing out ROTHs (because ROTHs are easy to access). Anything much more than that, and we'd be too retirement heavy. Even if we didn't have kids/college to pay for, tying up all our money for age 60+ just doesn't make much sense. We'd need other savings sources for early retirement, so I wouldn't tie it all up in retirement funds. I could see backing off in your shoes (given pension and house goal). I personally wouldn't save so much for retirement if we were also saving for a house.
July 2nd, 2017 at 11:45 am 1498995938