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Retirement savings?

I have $8k in a roth IRA now. I'm 23, just starting out and I'm a long way from getting there... How much do I need to save to retire at around 50 with an income of around $50,000 in today's dollars?

Public Comments

  1. What I'd recommend is that you use a retirement planner such as Quicken builds into their programs. Many investment houses also have retirement planners. Too many variables for us to answer.
  2. they say you should take no more than 5% of your nest egg out per year.......so you would need about 1million in savings....BUT this changes if you retire early......retiring at 50 is a great goal but very hard to do......good luck thinking about this at 23 make you a smart man..
  3. Here are some links from the Suze Orman site that should easily help you. Good luck; and You are very smart for beginning early!!!
  4. Yahoo! Finance 'retirement' calculator http://finance.yahoo.com/calculator/retirement/ret-02
  5. First _ BIG KUDOS for thinking and acting now. You don;t know how many 45-y/o couples are sitting exactly where you are - which 2 kids about to enter college. Bad news: You can't get there with a Roth alone. The max you can put into a Roth each year is $4k (until you are 50, then it rises to $5k). Run the numbers in a calculator or in Excel: start with $8k add $4k/yr compound it by 8% (achievable rate of return) do it again and again for 27 more years, until you are 50....the total is about $450k. Not enough to take $50k/yr out for life. Also - $50k in 2034 (27 yrs from now) is worth about $19.7k in today's dollars (assuming only 3.5%/yr inflation). Best formula I've seen, and again Excel is handy for playing around: put away pre-tax AT LEAST 10% of all earnings for your entire life. Invest it 80/20 stocks/bonds. NEVER touch it. Start at age 25 - when you retire at 65 you should have enough saved to replace your paycheck at retirment and live on the money another 30 yrs before running out. If you are not saving at least 10% of your paycheck, you will regret it later - and 15% is better. Pay yourself before you buy that BMW.
  6. How long does that annual-50k need to last? Until your 100? Until your 80? There is a 40-year investment calculator at the URL below. Enter your age, current savings level, annual additions, ROI, and an inflation rate and it predicts your spending power when you want to retire. It is absolutely the best calculator I have found on the net for calculating this. Good luck!
  7. It's all about assumptions. Yours given above, starting with $8k, assuming you are making 50k now and want to retire on the same 50K in today's $$$s at age 50 and want it to last till you are 85. You need to put away 17.5% of your annual income every year, starting at $50k now assuming you'll get raises and still contribute 17.5%. So that's $9750 the first year. You need to have an aggressive 12% return until you are 50 and a 6% return after you retire. This also assumes you'll get no social security.
  8. You can go to http://www.josephsangl.com/wp-content/uploads/Tools/Calculator%20Retirement%20Nest%20Egg%20Required%202007-02-21.htm to calculate that number. In quickly running your numbers, with$50,000 with 4% inflation in 27 years will be $144,168. If you estimate that you will be receiving 8% interest on your money and 4% inflation every year, you need $3,604,211 in your nest egg. If you gain 12% on your $8,000, you will need to invest an additional $1,411/month to achieve the $3,604,000. Have fun! Great start! You are in the top 1% of your peers on retirement savings!
  9. You need to watch your spending as much as your savings. By spending wisely you can actually save hundreds and then thousands over a period of time!
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