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I'm 25 and saving 6% with 4% company match. I wish I was doing more but I'm still trying to really cut down on my lifestyle and struggling with that. It's obviously more bitter than sweet, but I do have about 100k in retirement money already that I inherited from my father. So even though I know that gives me a big head start it's still stressful when you look at the retirement calculators. I'm on track in my career for my income to continue to increase though and no kids on the horizon for a few years so I'd really like to get up to 25% - although I'm a long way away!
And I'm definitely more obsessed than anyone else I know, so there's 2 of us out there! My boyfriend is also 25 and just started finally contributing to his 401k a few months ago because I forced him to (one has been available to him since he was 21!). But I have much different circumstances than others so I know that contributes to the difference...my father was a stockbroker/financial advisor and after a long disability and him subsequently passing away we were not left in financial ruins because he was so great with finances and planning for the worst (the best long term disability insurance for instance).
Honestly I want to retire early because I do want the "finer" things in life - I love international traveling (always backpacking staying at cheap hostels) and seeing new cultures, having new experiences. But it's a tough balance for me because life is short and you never know what's going to happen, so I also try to enjoy life now without being overly frugal.
I'm 25 and saving 6% with 4% company match. I wish I was doing more but I'm still trying to really cut down on my lifestyle and struggling with that. It's obviously more bitter than sweet, but I do have about 100k in retirement money already that I inherited from my father. So even though I know that gives me a big head start it's still stressful when you look at the retirement calculators. I'm on track in my career for my income to continue to increase though and no kids on the horizon for a few years so I'd really like to get up to 25% - although I'm a long way away!
And I'm definitely more obsessed than anyone else I know, so there's 2 of us out there! My boyfriend is also 25 and just started finally contributing to his 401k a few months ago because I forced him to (one has been available to him since he was 21!). But I have much different circumstances than others so I know that contributes to the difference...my father was a stockbroker/financial advisor and after a long disability and him subsequently passing away we were not left in financial ruins because he was so great with finances and planning for the worst (the best long term disability insurance for instance).
Honestly I want to retire early because I do want the "finer" things in life - I love international traveling (always backpacking staying at cheap hostels) and seeing new cultures, having new experiences. But it's a tough balance for me because life is short and you never know what's going to happen, so I also try to enjoy life now without being overly frugal.
It's good to know there are more people my age that are thinking about it. I think you are doing well for yourself even without your inheritance as a factor. Just keep plugging away and I think you will be able to retire early. Good luck!
Congratulations! You are so far ahead of most people your age! Most twenty-somethings don't even think about retirement.
When I was your age I always funded my IRA to the max and contributed the max (it was 15% then) on my 401k. Later on I had a job plus my own company, so even though I didn't actually take income from my company it still showed as income on my return. I would put 25% of that amount into a SEP-IRA.
We always had enough to live a comfortable (not luxurious) lifestyle, and best of all, I retired at 50. At the rate you are going I think you will be retiring early (if you want to). Keep up the good work.
Thank you! Believe it or not I have been contributing to my 401k since I was 21. I opened up a Roth IRA at 22 and also bought a modest house at 22. I somewhat regret buying the house before paying off my student loans, but once I finished my degree, I was able to get a better job in what I have always wanted to do. This is why I can pay more to my student loans now. I would also like to pay off the house soon, my mortgage is low relative to my income.
All of this I am planning before I have children, I hear they put a financial damper on your plans!
Started my pro career at 24 and from day 1, with employer match, putting 15k/yr away (401k). Now 26 and come new year will be bumping up to max 17k/yr 401k contribution. I have been saving quite a bit on top of that for plans of getting into real estate as a third source of income… I can’t wait! My goal is EARLY retirement, I really don’t want to be working for anyone other than myself within the next 15 years and then hopefully stop working by mid 50’s. By that point the goal is to have all my assets doing the work while I’m spending time with family, friends, hobbies and/or traveling and merely monitoring all income sources.
I live like a king but I am very frugal. How? Control your spending impulses. Avoid unnecessary debt. AVOID unnecessary debt. Avoid paying full retail. Learn how to effectively negotiate and negotiate every opportunity you can. Do your research. Purchase high quality items that last. Become an estate sale junkie. Learn how to use craigslist and ebay. Learn how to repair/restore/maintain everything you own (especially vehicles and homes). Keep close track of your small purchases, a lot of people “nickel and dime” themselves to death and then can’t figure out where all the money goes.
Rewinding to “avoid paying full retail” is bit of blatant secret. Granted there are quite a bit of things that you can't avoid this on... groceries, electronics, replacement parts, gifts etc. However there is an incredible amount of things that you can buy new or nearly new for a fraction of full retail if you are patient, do your research and look around. Second-hand/bidding websites, overstock stores for clothing/home goods, estate sales, business transactions where you can haggle… etc all these can slash your expenditures SIGNIFICANTLY I don’t normally encourage this behavior because the more people that do it, the less people like me, can gain from it. However fact of the matter is that most people, even when you explain how the benefits of these techniques are still too lazy to invest the brain power or time into carrying out with it.
First, anyone who wants some more discussion about retirement goals (both financial and otherwise) can check out the Retirement Forum here on City-Data.
Second, I have a fairly decent pension which was funded by a career-long contribution of 8% from my salary plus an employer match. Therefore, in this particular case, 16% of salary (which started on day one of my employment) was adequate over a 34-year career to fund a fairly reasonable pension.
I'm not arguing that everyone should consider a total (employee plus employer contributions) of 16% adequate. There are many variables including the number of years a given level of contributions is expected to continue.
Another variable is the amount of salary itself - lots of difference between a given percent of $50,000 and the same percent of $200,000 in terms of the total dollar amount available to fund a retirement. A further complicating issue is whether the high earner is aiming to continue the same lifestyle in retirement (granite countertops, designer clothes, late-model high-end cars) or is willing to move in the direction of more furgality after retirement.
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