SavingsTalk.com

sox · 10-31-2007, 08:25 PM

I graduated college last year, this year I will be maxing out my 401k and my Roth IRA. Every year after I will also be maxing it out. I was advise that I should only contribute the max my company will match, which is up to 10%. However, the vesting period is 5 years. The only thing I really want right now is a house but buying a house in California is impossible at my age. Therefore, I have the mentality of just saving for retirement for now. But as I get older and make more money I can max out my retirement and save for a house. Any advice?<br />

alien · 10-31-2007, 08:25 PM

I would say max out the retirement savings now, while you can. Assuming, of course, that you are not incurring debt to do so.

Housing is likely to stay flat and probably continue to go down for the next year or two. Additionally, the more you save now for retirement, the better off you will be, since it has longer to grow.

The money in a retirement account looks good to a mortgage lender, they consider it to be reserve money. There are also provisions for borrowing against a retirement account for a hosing down-payment, but I don't recommend this.

save123 · 10-31-2007, 08:25 PM

Well, you shouldn't be worried about retirement! You barely started working! You will have a whole lifetime to save for your retirement! It is important, but not so soon!

jeff · 10-31-2007, 08:25 PM

you can never save too much for retirement! but make sure your still having fun durring your working life. you don't want to work your whole life and save every penny and retire and have to give it all to your siblings when you pass away.

this life is for you to have fun!

buying a house isn't impossible. fannie mae mortgage programs do not care what age a borrower is. i've done 40 year mortgages for 80-90 year old borrowers. its not an issue.

jeff · 10-31-2007, 08:25 PM

I don't think you can really save too much for retirement. The sooner in life you put money away, the longer it has to compound and grow substantially. 5k invested for 35 years at 10% ROI reaches 154k, but that same 5k invested for 40 years comes out to 249k. Quite a difference in those 5 years, huh? That is the power of compounding.

As you get older and closer to retirement, the deposits you make will have less of an affect on your final balance when you retire because money from later years does not compound as long, even if it is a larger deposit.

Thing is, you should not ignore other short and long-term financial goals, either. Saving for a house, a family, etc. should all be kept in mind. Take a look at a copy of a chart below. Strategy B includes those other saving goals you should consider.

Also, you are never too young to save for a house, even in California. As a first time home buyer, you can use up to 10k from a tax-advantaged retirement account without penalty for your down payment.

from URL below---

Within Strategy A: Reduce Expenses, there are four basic sub-strategies:
A1 ? Run an Economically Productive Household
A2 ? Avoid Overspending and Overpaying
A3 ? Reduce Consumer Debt
A4 ? Reduce Taxes

Within Strategy B: Reduce Liabilities, there are six basic sub-strategies:
B1 ? Utilize Insurance
B2 ? Implement Retirement Plan
B3 ? Create Emergency Cash Cushion
B4 ? Create Will / Trust for Heirs
B5 ? Reduce or Remove all Debt
B6 ? Family Planning and Goal Setting

Within Strategy C: Increase Income / Net Worth, there are four basic sub-strategies:
C1 ? Own / Partner in Businesses
C2 ? Stock Market
C3 ? Real Estate
C4 ? Career or ?W-2? job

Be blessed,

50cents · 10-31-2007, 08:25 PM

I don't think u can ever have to much money for retirement..

dotru · 10-31-2007, 08:25 PM

NO WAY!!! I am only 22 and though I am not yet maxing out, I give all that I can afford and then some. Many financial advisors will say that our age is the biggest asset that we possess. Keep doing what you are doing. You will probably be able to retire early and maybe even start a new career.

kevin · 10-31-2007, 08:25 PM

Saving for retirement now is a GREAT idea! Keep up the good work. IT shows a real maturity that most people (your age or older) dont have. Most people want to spend more than they get thinking they will worry about retirement when they retire, bad idea! Keep with the 401K and Roth IRA.

Think about putting some $$$ to the side in a good Mutual Fund or Money Market as a down payment on a house. If you can stand to wait a few years before buying a house, then having a big down payment will help a lot. Just dont go house crazy and buy the biggest thing you can get, and dont do 40 year loans! Keep it to a 15 year fixed thats no more than 25% of your income.

avitse1341 · 10-31-2007, 08:25 PM

Well done for considering your retirement so young. Lots of people don't and it is so worth it. It sounds to me like you pretty much know what you are at. I'd stick with it.

10-31-2007, 08:25 PM	#1 (permalink)
sox Piggy Bank Join Date: Jul 2006 Posts: 59 Rep Power: 3	I'm 23, am I saving too much for retirement? I graduated college last year, this year I will be maxing out my 401k and my Roth IRA. Every year after I will also be maxing it out. I was advise that I should only contribute the max my company will match, which is up to 10%. However, the vesting period is 5 years. The only thing I really want right now is a house but buying a house in California is impossible at my age. Therefore, I have the mentality of just saving for retirement for now. But as I get older and make more money I can max out my retirement and save for a house. Any advice?<br />

10-31-2007, 08:25 PM	#2 (permalink)
alien Piggy Bank Join Date: Jul 2006 Posts: 63 Rep Power: 3	I'm 23, am I saving too much for retirement? I would say max out the retirement savings now, while you can. Assuming, of course, that you are not incurring debt to do so. Housing is likely to stay flat and probably continue to go down for the next year or two. Additionally, the more you save now for retirement, the better off you will be, since it has longer to grow. The money in a retirement account looks good to a mortgage lender, they consider it to be reserve money. There are also provisions for borrowing against a retirement account for a hosing down-payment, but I don't recommend this.

10-31-2007, 08:25 PM	#3 (permalink)
save123 Greenhorn Join Date: Jul 2006 Posts: 20 Rep Power: 3	I'm 23, am I saving too much for retirement? Well, you shouldn't be worried about retirement! You barely started working! You will have a whole lifetime to save for your retirement! It is important, but not so soon!

10-31-2007, 08:25 PM	#4 (permalink)
jeff Greenhorn Join Date: Jul 2006 Posts: 28 Rep Power: 3	I'm 23, am I saving too much for retirement? you can never save too much for retirement! but make sure your still having fun durring your working life. you don't want to work your whole life and save every penny and retire and have to give it all to your siblings when you pass away. this life is for you to have fun! buying a house isn't impossible. fannie mae mortgage programs do not care what age a borrower is. i've done 40 year mortgages for 80-90 year old borrowers. its not an issue.

10-31-2007, 08:25 PM	#5 (permalink)
jeff Greenhorn Join Date: Jul 2006 Posts: 28 Rep Power: 3	I'm 23, am I saving too much for retirement? I don't think you can really save too much for retirement. The sooner in life you put money away, the longer it has to compound and grow substantially. 5k invested for 35 years at 10% ROI reaches 154k, but that same 5k invested for 40 years comes out to 249k. Quite a difference in those 5 years, huh? That is the power of compounding. As you get older and closer to retirement, the deposits you make will have less of an affect on your final balance when you retire because money from later years does not compound as long, even if it is a larger deposit. Thing is, you should not ignore other short and long-term financial goals, either. Saving for a house, a family, etc. should all be kept in mind. Take a look at a copy of a chart below. Strategy B includes those other saving goals you should consider. Also, you are never too young to save for a house, even in California. As a first time home buyer, you can use up to 10k from a tax-advantaged retirement account without penalty for your down payment. from URL below--- Within Strategy A: Reduce Expenses, there are four basic sub-strategies: A1 ? Run an Economically Productive Household A2 ? Avoid Overspending and Overpaying A3 ? Reduce Consumer Debt A4 ? Reduce Taxes Within Strategy B: Reduce Liabilities, there are six basic sub-strategies: B1 ? Utilize Insurance B2 ? Implement Retirement Plan B3 ? Create Emergency Cash Cushion B4 ? Create Will / Trust for Heirs B5 ? Reduce or Remove all Debt B6 ? Family Planning and Goal Setting Within Strategy C: Increase Income / Net Worth, there are four basic sub-strategies: C1 ? Own / Partner in Businesses C2 ? Stock Market C3 ? Real Estate C4 ? Career or ?W-2? job Be blessed,

10-31-2007, 08:25 PM	#6 (permalink)
50cents Greenhorn Join Date: Jul 2006 Posts: 16 Rep Power: 0	I'm 23, am I saving too much for retirement? I don't think u can ever have to much money for retirement..

10-31-2007, 08:25 PM	#7 (permalink)
dotru Greenhorn Join Date: Jul 2006 Posts: 16 Rep Power: 0	I'm 23, am I saving too much for retirement? NO WAY!!! I am only 22 and though I am not yet maxing out, I give all that I can afford and then some. Many financial advisors will say that our age is the biggest asset that we possess. Keep doing what you are doing. You will probably be able to retire early and maybe even start a new career.

10-31-2007, 08:25 PM	#8 (permalink)
kevin Greenhorn Join Date: Jul 2006 Posts: 26 Rep Power: 3	I'm 23, am I saving too much for retirement? Saving for retirement now is a GREAT idea! Keep up the good work. IT shows a real maturity that most people (your age or older) dont have. Most people want to spend more than they get thinking they will worry about retirement when they retire, bad idea! Keep with the 401K and Roth IRA. Think about putting some $$$ to the side in a good Mutual Fund or Money Market as a down payment on a house. If you can stand to wait a few years before buying a house, then having a big down payment will help a lot. Just dont go house crazy and buy the biggest thing you can get, and dont do 40 year loans! Keep it to a 15 year fixed thats no more than 25% of your income.

10-31-2007, 08:25 PM	#9 (permalink)
avitse1341 Greenhorn Join Date: Apr 2007 Posts: 17 Rep Power: 0	I'm 23, am I saving too much for retirement? Well done for considering your retirement so young. Lots of people don't and it is so worth it. It sounds to me like you pretty much know what you are at. I'd stick with it.

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