Tales from the Wallet: Retirement Savings

retirement savingsLadies, how much do you save for retirement? Why do you do it? There was an interesting commenter thread about feeling saving burnout and wanting to splurge a little — do you count retirement savings as something you can cut back on, absent a strong need? We’ve talked about how much to save for retirement, what kind of tax-savvy investments exist to maximize your retirement savings, when to pay down debt vs. save, and where retirement should fit in your total money roadmap. 2018 Update: Check out our discussion on the FIRE movement (financial independence retire early) for beginners! 

(Pictured: Hobo ‘Taylor’ Glazed Leather Wallet, on sale at Nordstrom for $70.)

For my $.02, I didn’t get started saving for retirement in a 401K or other tax-savvy vehicle until my late 20s, and I regret that — as they say, there are few powers in this universe stronger than the power of compound interest, and this kind of chart always freaks me out. My husband and I have generally taken the view that saving for retirement is one of our top priorities, and we max out every tax-advantaged vehicle. Like most parents of small kids, I’ll admit that these past few years (yay, childcare expenses) have been tight, and we’ve been moving money from our other, non-tax advantaged savings in order to max out our retirement accounts. (In case that’s unclear — I try really hard for us to spend less than we earn, and I kind of freak out if our take-home earnings for the month are less than we need to pay our bills. But then I remember that our retirement savings and 529 savings are deducted before they get to our take-home earnings, so as long as I can use our other savings to make up for the shortfall, I feel OK about it — within reason.)

How about you, ladies — what are your strategies for retirement savings? Does anyone get a match or perk you’d care to tell us about (anonymously)? Any good tips on how to do it? 

Further reading:


  1. Kat…your earnings are less than your bills and you’re okay with that? Even with 401K and 529 contributions taken out, that is not a sound financial strategy and quick way to deplete your savings. Especially with a child, living within your means and an emergency fund are pretty essential.

    • Maddie Ross :

      Eh, yes, monthly inflow “should” exceed outflow, but I would tend to guess that Kat has uneven income since most of it is from ads, etc., meaning that it’s hard to exactly budget. And I also read that to mean that some months there were extraordinary expenses from which they pulled from savings (big ticket item, healthcare expenses). That’s what savings is for in my opinion…

      • +1, that was my interpretation. Our paychecks get direct deposited in multiple accounts, including savings. On big expense months, we may have to pull money from savings into the “operating” account. It’s not overspending per se, as much as it is saving at a lower rate for that month.

      • Wildkitten :

        I also think she’s paying for daycare for two small kids, and that expense will decrease soon.

      • Yep – there’s a pretty big swing in my income every month (some months are as much as double my average, some are below my average). Plus because I’ve been doing a SEP-IRA since working for myself, I never know the number I get to put away until tax time because it’s 25% of …. Net? I forget. It has a higher max than a 401k too so that’s another difference. (Including one of mindset – if we have a good year I want to put as much away as possible with the understanding that other years may not be so great.)

        • I get it, I do! I’m just very risk averse. If you have a bad month that’s lower than average, there’s no guarantee it will pick back up next month. It could continue to decline. I’m on the conservative end where my variable income means my budget is based on my lowest-possible month, but YMMV.

  2. Anon for this :

    I currently save 10% of my income into a 401k, which is less than the max. But, my employer contributes 50% of my contribution plus 3% profit-sharing, so last year 18% of my income went into the 401k. That ended up being $23,400. I’m 31. I currently have about $70k in a combination of 401ks and a Roth IRA.

    My husband will end up contributing about $5000 into a 403(b) this year. If he stays with this employer for two more years, they will contribute 12% of his salary, regardless of what he contributes. That would be about $6k. We would probably add to that. He currently has about $20k in retirement accounts. We have a fully-funded emergency fund.

    We can’t contribute more to retirement right now because we are paying about $1600/month toward low-interest debt and about $1500/month toward daycare. The plan is to pay off all our debt in a little over 2 years, and then we will contribute that $1600/month directly into retirement until we max out our tax-advantaged accounts. Once we max out those accounts, we will contribute more to our current 529 (that’s only getting a token $100/month). Assuming we max that account at some point, we will start other investment accounts.

    My current plan is to try and save at least $5 million in retirement by 2050. I think that’s realistic given our current plan.

  3. Sydney Bristow :

    I had a minuscule 401k at my first post-college job that I had to cash in during law school. After law school I maxed out a Roth IRA for 2 years. For the past 6 months I’ve had a 401k through work. I feel pretty far behind though. I’m 32.

    I currently contribute 6% to my Roth 401k. I started at 5% and increase 1% every 6 months so that I don’t really notice the increase. I’m planning to get to 10% then possibly sticking there until paying off my student loans. My firm also contributes 6% without requiring me to contribute anything. So right now I’m saving 12%.

    I feel behind but know it could be worse. Luckily my husband has a very nice pension as well so as a team we aren’t that far behind.

    • Syndey is so smart. I wish I had such a head for busness, but I don’t so I just let my dad do all of my financeal planning for me. Dad was MENSA eligible, so he alway’s knows the right thing to do. I know I have a 401K also, and a fund that he put up for me. That is good b/c I have NO husband to do this for me. YAY Dad!

  4. lost academic :

    I always feel like I’m doing retirement wrong. I’m maxing out my 401(k) contribution now that I’m at a stable firm that contributes, I’m paying down a small undergraduate debt (no grad debt) and I’m saving as much as I can on a monthly basis, but without a specific target. What else should I be doing in my early 30s, Hive?

    • lost academic :

      My other expenses are pretty minimal – no other loans or payments required, low bills/COL, planning at some point to replace my car, no kids yet but talking about TTC starting this year…

      • With that added info–ignore my response below. If you have a car purchase coming up in the next 3 years and are considering TTC, continue to max out your 401K, then split your money between bolstering your savings and paying down your debt. That will give you more security in case you suddenly need to buy a car ahead of schedule and for unexpected baby expenses :)

        But really, you’re doing great!

        • lost academic :

          OK, I just feel like I’m so far behind all the time! The 401(k) had no income and a tough hit in the market (like most did, I guess) while I spent years in graduate school. The debt is 9K and is a low interest/low monthly payment loan – It’s a minimum payment of 112 monthly and I pay 250 now. So I have a lot more in savings monthly than I repay the loan, but I feel a little better having more cash on hand than I do having that loan disappear a year early. I’m not sure if that’s really fiscally sound, though.

          • Not to be super personal–but how much in savings do you have in terms of emergency fund?

            And when you say your debt is low interest, what do you mean? If it’s anything over 3% and you have at least several months in savings, it’s worth it to pay it down–it’ll save you a decent amoutn of money and your money will only earn .8% (if you’re lucky) in a standard savings account

          • lost academic :

            No worries! It’s lower than 3%. I have more than 3 months saved right now. But I could conceivably pay it off this year.

          • If it’s less than 3%, I don’t see any rush to pay it off. It sounds like you’re in good shape, so that really comes back to you. Does that debt bother you? Meaning, do you stress about it, can’t sleep over it, etc? If so, pay it off so you feel secure and have peace of mind.

            Otherwise, at just 3% interest, I’d pay just the minimum and put the extra money split between savings and retirement.

          • lost academic :

            So if I do all that and then I can put in a max of $5,500 to an IRA annually … that’s good?

          • If you’re maxing out your 401K and have money left over to pay down low-interest debt AND build savings, that’s good.

            If you can max out your 401K, make minimum payments to debt, put some towards savings, AND contribute at all to an IRA (let alone maxing it), you’re doing amazing.

          • lost academic :

            You have reassured me a great deal! Always great advice from you, KT.

            And no, it doesn’t keep me up at night (like money did when I was a teenager, wondering where the electricity, gas, milk were coming from) but when I think about it I just feel inadequate. This will help! I’ve leveraged myself into a reasonably high paying job even though I’m not a lawyer or a programmer and I do my best to keep the costs low. But I work on nonprofit boards with guys who work in finance and do all sorts of investment stuff that is pretty far outside my expertise…. and I wonder if I could be doing more.

          • Aww thank you, personal finance is my thing–after being so poor for so long, I was determined to learn as much as I could so I could make the most of my money.

            Don’t feel inadequate–you are heads and shoulders above others in your age group (and much older!).

            And while lots of people who work in finance know their stuff investing their own money, some of them are really…really bad at it. I can’t tell you how many people I’ve met who were account managers for huge investment firms but were dead broke themselves and living on credit. Not saying that’s always the case, but just keep in mind that elaborate investing isn’t necessary (or even recommended) for the average person.

    • If you’re maxing out your 401K, you’re on the right track. Keep doing that, but assuming you have some savings (3 months-ish), really focus on getting rid of your debt.

      Once you’re debt free, if you have money after maxing out your 401K, contribute to a Roth IRA or an IRA. If you max THAT out, you’re doing awesome and just sock money away in savings, or, if you won’t need the money for 5-10 years, consider investing in ETFs.

    • Anon for this :

      Why do you feel like you are doing anything wrong?

      • lost academic :

        Just because! I came from an extremely poor background, so since there was never ANY money to manage I didn’t learn a thing about it, nor anything about retirement saving (you’d have to have a job to plan for retirement…. so I didn’t have any adults in my life that ever talked about that…)

        I just look at the numbers I have in my 401(k) and feel like they aren’t large enough. I remind myself when people here talking about their savings that they make a LOT more than I do and have generally for awhile, but I just generally feel like there must be something I am missing.

        • You’re doing really well. There are people in their 50’s who plan to retire in the next ten years that don’t max out their 401Ks. Most 30-somethings right now have tons of debt, little savings, and low if at all retirement, so you’re doing great!

          And I hear you. I grew up poor, and money management really wasn’t a thing because there was no money to manage! It can be daunting and overwhelming when you actually have money to make decisions about.

          • lost academic :

            Part of me thinks, well, if I work till I die, who will care what I saved for retirement? But it doesn’t work that way. Maybe I can’t work after a certain point because I get laid off and I can’t make a new position at my level work for me. Maybe my husband needs care that requires me to not work at some point. Maybe I have a kid that ends up needing that kind of care. Maybe I become ill or injured and have to stop! So I have to plan. I saw this happen to my biological father. He was not prepared to ever quit working and then he was forced to.

          • All true. And things change! What if in 30 years you’re just dog tired and want to just chill out? When you’re 30-something, the thought of WANTING to just chill out can be a foreign concept, but that can change!

            And absolutely, illness, spouse, kids–shit happens and it’s good to be prepared. If you are planning on TTC, make sure you also get a term life insurance policy :) At your age, you can get a plan for $20 a month to give you security as well.

        • I felt the same way for a long time. Didn’t really start anything until my late 20’s and then realized I was behind…way behind. I’m 40 now and my husband and I have sorted it out – lots of research and reading, talking to friends who seemed to have a plan, and then executing on a few things we felt we were missing/not doing enough of. We feel pretty confident now that we’ll have a decent retirement. We won’t be rich, and we won’t be retiring early, but we will be able to retire. Woohoo!

  5. Wildkitten :

    I save 5% and my company matches 5% so 10% total. I’ll bump to 10% (15% total) when I finish paying off my credit cards – probably at the end of this year.

  6. Anonattorney :

    Follow-up question: do you all have a target number for retirement? I.e., $5 million by age 65? If so, how did you land on that number?

    • Sydney Bristow :

      I would love to know the answer to that. Those calculators are all so different.

      I think the book Your Money or Your Life suggests getting to the point where the income from your investments exceeds your expenses. But that doesn’t really suggest a specific number to aim for.

    • I determine the salary I’ll need to live my hoped-for lifestyle (I look at my current expenses for that–while not working will cut down on clothing/commuting costs, I leave those in to account for increased medical bills), and multiply it by the years left from target retirement age until my life expectancy (most women in my family die between 79-82…I’ll pad that by a several for security’s sake)

      Then I tack on 15% of that final number to give some cushion for inflation.

      So for example, if I plan on retiring early at 55 and think I’ll die at 75, I’ll round up to 80. I think I need $50,000 a year to live comfortably, so 50,000 x 25 years until I’m 80=$1.25 million. Adding in 15% for inflation is 1.43 million.

      This gives you just a ballpark to work for. There are more scientific calculators out there, but they require a lot of detailed information. This formula just gives you a broad goal to help you figure out how much you need to save.

      • If you intend to travel, summer down south, etc, make sure you account that for that too in your total! (i.e.e a 10,000 vacation every year from 55-80 would tack on another $250,000)

      • I think many people will live well beyond 80 in this day and age. I would plan till 90, but absolutely have no desire to be alive till then especially if I am dependent on others.

        • Oh absolutely! Just for example’s sake :) But if I’m going to make it to 90, technology better have made me bionic.

      • Anonymous :

        These calculations are way off. ~1.43 million will only buy you a 25-year 50K NPV annuity if a) these 25 years start today, and b) annual inflation rate is <1.5%.

        • Anonymous :

          So how would you change KT’s methodology to make it correct? (No snark, I actually want to have a methodology to account for these things to arrive at a target number!)

          • Anonymous :

            Assume that you desire an annual income which is equivalent to 50K today for 25 years. Suppose your 25 years start today. 50K today is exactly 50K today. But what is the equivalent of the same amount next year? If inflation is 2%, that’s 51K in year 2.What about in year 3? It’s $52020, etc. If you want to have a pot of money that will be sufficient to last for 25 years in this fashion, you’d need 1.6M at the beginning of year 1. But that is under the conservative assumption that you just sit on that 1.6M pot and start depleting it in year 1. You need less at the beginning of year 1 if this pot is still earning interest after you start depleting it.

        • Hmm when I ran it, 1.25 would be the present value annuity for 25-year 50K; 1.43 would account for the higher inflation rates above and beyond the usual inflation rate of 3.22% annually.

          Obviously i can be wrong and saving for retirement is absolutely an inexact science.

          My formula is just meant as a ballpark to work towards as a MINIMUM to strive for.

          • Anonymous :

            Your “formula” is not correct. 1.25M is not a 25-year 50K NPV annuity, it’s just 25x50K without taking tame value of money into consideration at all. While saving for retirement is certainly a function of your personal preferences among other things, financial mathematics is in fact very exact. 1.43M would only account for <1.5% inflation annually. This is not a value judgement, just plug the numbers into an excel sheet. If you want the %rate in the calculations to be 3.22, then the number is almost 1.9M in todays dollars (again, under the assumption that the 25 year target period starts today).

          • Anonymous :

            I don’t mean to sound harsh but you are all over this thread, KT, and you seem unfamiliar even with the very basics of financial math.

          • Anonymous, could you outline the excel inputs? Genuinely curious. Using a “/” rather than comma for the formula

            =PV(rate / 25 (years) / 50,000 (annual payment) / $1,250,000 (future goal) / 0)?

            What rate are you using?

            Just curious… trying to run my own calculator. I think I got the same number as you, or $1.897 mil.

          • Oh rate = inflation. Duh. Yea, when I use 1.5% inflation I get $1.897.

          • Anonattorney :

            Holy crap. I just did the math and I’m totally screwed. If I take $100k in today’s dollars, and adjust it using 3.22% inflation to the amount $100k will be worth when I retire (roughly 2050), then my retirement will start at $293,745 per year. If I continue the 3.22% inflation for 30 years, I will need–TOTAL–$19,327,988 to retire. Is that right? I mean, that takes into account inflation, so it will be $19,327,988 when I presumably die in 2085, but that just seems insane.

          • Anonymous :

            You are using the PV formula incorrectly!

          • I just figured if I want $150,000 when I turn 60/retire, 3% more each year thereafter, I would need $4,432,295 in my retirement account by the time I retire assuming a 1.5% inflation rate. Can someone check my math?

          • Anonymous :

            How old are you? Cannot check anything without this info.

          • 31.. I already think I did it wrong.

          • Anonattorney :

            @Anonny: I don’t think your math is right. What I did is take 100,000 as of 2016. I won’t retire until 2050. Assuming 3.22% inflation, $100,000 right now will be worth about $293,745.40 in 2050. In 2051 it is worth $303,204. In 2052, it is worth $312,967.20. I just continued the math (using simple formula in excel, previous year * 1.0322) until I reached 35 years. Then I summed the years from 2050 until 2085. The sum is $19,427,988. Granted, my savings will also earn interest, so my $100k in retirement savings right now would be worth $890,647.80 in savings in 2085. But presumably the amount I will consume in retirement is nearly $20 million.

          • Anonymous :

            You can safely use a much lower inflation rate than 3.22%. 2% is plenty.

          • Anonattorney :

            Okay, so I think that if I want $100k a year, assuming inflation of 2% per year (which also means that my money in the bank will earn 2% interest per year), I will need approximately $7 million in the bank to retire in 2050 and live for another 35 years. And that means that I need to save the equivalent of $38,000 per year, adjusted for inflation each year and assuming my savings will accrue 7% interest until I retire.

            That said, if you are a couple, and you are maxing out your 401ks and doing a little extra into retirement, you can expect to retire on the equivalent of about $100k per year measured in 2016 dollars.

    • I have a different kind of target. I can retire when everything I have listed below is done:

      1. Fully own the house (no mortgage).
      2. Children’s college education fund enough pay for the tuition (they have to earn their living expenses).
      3. Have 100K per year passive income (I don’t even know if 100K per year is even possible).

      As far how I reach there, I am not really sure. I don’t even know if I will stay in this country or go back to my home country. So everything is up in the air.

      • 100K in passive income is definitely possible.

        -You could have invested enough that 100,000 is earned in interest (obviously that would require significant savings).

        -You could have rental income

        -you could author a book/ebook that generates income for years

        -you could be a silent business partner (provide start-up funds and get 30% royalties in perpetuity, for instance)

    • Diana Barry :

      Probably $5-$10M liquid, but I am just guessing.

    • Anonymous :

      This is how I calculated how much we need to have for retirement:

      Step 1: Average the past 3 years of living expenses. If there are any large one-time cash outflows, take them out (e.g. moving, buying furniture, wedding, house down payment – but not vacations).
      Step 2: Figure out in today’s dollars what will be going away (e.g. day care, mortgage). This is your base spending in future years, at today’s dollars.

      Note: Some people say that you will spend 80% of your base spending in retirement. I don’t necessarily believe that, based on my parents experience. Their expenses are pretty fixed and have not decreased in retirement. So in my case, I’m assuming spending our current base amount, but that the buckets may be allocated differently in the future (fewer clothes & shoes/ higher medical).

      Step 3: Estimate future inflation. This is the really important b/c inflation is a killer to your buying power, it is the evil cousin to the power of compounding. I toggled between L-T Treasuries (as a proxy) and historical rate.

      Step 4: Estimate mortality. I used NWM Lifespan calculator (there are plenty) and it estimates that I will die when I’m 96 (based on variety of risk factors like cardiovascular disease, smoking, seat belt……). Which is consistent with my family history as my grandmother is 92 and still drives and lives by herself.

      Step 5: Take your base spending (in today’s dollars) and compound it annually with inflation to your mortality year. (e.g. $50k of 2013 buying power at 2% annual inflation equals $76k in 2034 (retirement) and $130k in 2062) Meaning that 76k in 2034 buys the same standard of living as 50k does today.

      Step 6: From the time you stop working to the time you pass away – that cumulative amount is what you need to fund.

      You can fund it many, many ways and in different chuncks including: social security (I am assuming nothing for me as it will be either means tested or will be offset by health premiums); 401k, Roth and other pre-tax savings; post-tax investment accounts; income from rental property; defined benefit plan ……

      Remember at retirement, you don’t need the full amount, as your accounts should continue be in the stock/bond market and garner returns.

      The three biggest pieces of advice I have are: 1. have a healthy emergency fund 2. live beneath your means. 3. work to expand your long-term earning power.

      Apologies for the long post, but this issue is important to me.

  7. Anonymous :

    DH and I are 31/32. We have been contributing to retirement in some way since our first jobs, even though grad school (I went first, then he did, so w always had *some* income). I have about 120k set aside, with 65k of that already taxed (Roth). DH has about 150k, 10k of that Roth.

    This year, DH is maxing out his 401k and with a 50% match on the first 6% it turns out to be about 24k. He and I will both max out IRAs this year, and I will be contributing some, but not sure how much, into a SEP.
    Goal is 10k.

    We have not always been 100% maxed on contributions, but we wanted to start early and get in the habit. We didn’t max 401ks the year we bought a house, and didn’t fully fund iras while in grad school, but we DID try and cram $ into the Roths when we had one person in grad school and therefore qualified. At the time it seemed like paying the taxes was silly but now that we have hit our steady-state income and it is almost 3x what it was then, I know we made the right call.

    Fwiw we have a LOT of childcare expenses. We have a pretty lean budget in order to make sure we can hit these retirement goals. We aren’t saving as much as we should in the 529s, but the kids are <5 and we are determined to take care of ourselves first.

    • Anonymous :


      • I read this as applesauce for some reason…

        • I had this problem with the lady gaga song (applause) that came out. I just kept on hearing the chorus as ‘I live for the applesauce, applesauce, applesauce …”

  8. Anonforthis :

    I’m 33, husband is 36, we both max out our 401Ks and I save an additional 12K a year. Both mid-levels in BigLaw so neither of us gets a 401K match. I clerked for 1 year, him for 3 years. I have about 70K in my 401K (maybe less after the market crash) and 5K in an old pre-firm Roth IRA, my husband has about 50k in his 401K .

    I know we are behind on retirement savings, but I think we’ve made a ton of progress since graduating law school. Together we graduated law school with about 400K in law school debt but no car loan or credit card. We have about 100K left on the loans and plan to pay it off this year. We also bought a house in a HCOL area, paid for a wedding, and bought an inexpensive car. We have about 36K in an emergency fund that we are growing to around 50K, and money in other targeted savings accounts, such as new car, vacation, etc. Additionally, I have about another 120K in savings and my husband between 20 and 40k. We probably should dump the savings and pay off the loans tomorrow but they are all at low interest rates and we both like knowing we could quit our jobs and be fine for a good long while.

    • Anonattorney :

      BigLaw doesn’t match 401k contributions?

      • Anonymous :

        Not for attorneys, but typically yes for staff.

        • Anooooooooon :

          I have noticed this, but am so confused about why it is. Any insight? My firm matches for staff and partners, but not for associates. It is confusing to me.

          • My assumption is that because no BigLaw firm does it there is no “need” to do it. Typically, BigLaw only does something if it perceives it will lose talent to another BigLaw firm if it fails to act. That is why bonuses tend to be the same for a given class year in a given geographic area.

  9. Diana Barry :

    I max out my 401k and DH maxes out his SEP every year. I also get a 4% match (woo?) so in total we probably put away 50K or so every year in the retirement accounts. We put small amounts into the 529s right now, but when we are spending less on childcare (right now counting our employer contributions I think it is 40K/year) I will increase that.

    I have always maxed out my contributions and DH has also (since paying off his student loans, right after I met him).

  10. corrosive effects of not working :

    My husband has a sister who dropped out of working about 7 years ago and is supported by my MIL (doesn’t work, plays on the computer a lot). She just turned 50.

    His BIL had a company go under in the recession and has gotten into selling real estate. I think he does sell some houses, but husband thinks that he just loafs around the house (like the sister above, BIL is married to a different sister). Who knows?

    The sister married to the BIL is heavily helped out by my MIL.

    My husband now talks of why work? Why when all of these people don’t bother to? Why save for the future when these folks don’t and they still get taken care of?

    Seeing people not work when you are working is totally corrosive (but not to me: I will probably live into my 90s and intend to do so with a roof over my head and a healthy bank account. Can I guarantee it? No, but I can be assured that I won’t have it if I sit on my butt all day not even trying.) I wish all of the these people woudl get religion before I wind up taking my MIL’s place supporting all of these people (but who knows about the BIL — he is a nice guy and may do well in real estate in the long run).

    • Unless they have a disability, there’s no reason they can’t attempt to support themselves. Your MIL is a fool and you would be too if you enable this type of thing.

    • lost academic :

      Sure, he could do that, but what if MIL was hit by a bus tomorrow? Where will they be? They won’t have anything to fall back on and not necessarily any easy re-entry to the workforce. Maybe she’s saving/has some life insurance to help them but maybe not.

  11. I max out my 401k every year (no match) and have done so since graduating from law school. In addition, I save in an index fund and have an emergency fund. I tend to add to the emergency fund before adding to the index fund, as I’m pretty risk averse when it comes to money and like to have a bunch of cash available. The e-fund also serves as my F*** You fund in case I ever decide to up and quit my job.

  12. I am fresh out of college, young, and at my first job (not law, and making much less than a young lawyer). I have nearly $200k in undergrad loans, most of which are around 8% interest. I contribute 6% to 401k, 10% into company stock (through a discounted employee stock purchasing program), and pay pretty much everything I can manage into my loans each month (well above the minimum payment). Because my loan interest rates are so high and I don’t expect my 401k to grow faster than that, I think it makes more sense to put my excess cash into knocking out the loans quicker. However, it makes me nervous that I won’t be aggressively saving for retirement until my loans are gone, which I estimate to be about 6 years from now.

    Anyone have advice for my situation? Should I be prioritizing retirement over paying down my student loans?

    • I should clarify that my company does not do 401k matching. If they did, I would probably try to max that out.

    • Sydney Bristow :

      I don’t know that I would be investing so much into company stock. My financial guru Clark Howard normally recommends against it.

      • Sydney Bristow :

        Oh and personally, I think you’re right to prioritize paying your loans. 8% is a killer.

    • Ouch. That’s some brutal loan interest. I would absolutely focus on your student loans first–that’s an appallingly high interest rate.

      Do you have at least 2-3 months of savings?

      Your return on retirement investments is going to average much less than 8% for at least some time, so your money will go farther if you knock out those loans if at all possible.

      I would probably recommend cutting down on purchasing company stock and put that money against your loans. You’re very young, so waiting until your loans are done to start aggressively savings isn’t a deal breaker and is actually going to help you save money in the long run.

      • Anonymous :

        8.5% was the interest rate for GradPlus loans when I was in law school. The student loan interest rates are horrible. I’d look in to refinancing if possible, though you lose some benefits with federal loans.

        • That’s horrifying, seriously. 8.5%?! That makes my old 6% loans look like a downright bargain.

          At 200K in debt, I would hesitate before refinancing. If anything were to go wrong–job loss, for instance–not being able to defer would be HUGE.

    • Curious to hear what others say, but I think you’re doing the right thing. It’s true that $100 that goes to loan repayments diminishes your interest liability by $8 for the year (and any subsequent years) and that the return on your 401k will probably be lower than that. BUT 401k contributions are pre-tax. So even if you’re in the lowest federal tax bracket (10%), by contributing that $100 to your 401k instead is saving you $10 in taxes (though only for that year – so the calculation becomes different if you expect to be paying off your loans for years and years and years).

    • Have you looked into refinancing your loans at a lower rate? Of course, you have to consider the possible benefits you might be getting under your current loans (ability to defer, etc.) and whether it makes sense to give that up in exchange for a lower interest rate.

      • refinance :

        I think certain companies like Sofi let you defer to an extent so there are some protections there. I JUST finally bit the bullet and went with Sofi for a refinance and went from 7.9% to 4.5% (7 year loan), which is going to lighten my interest burden immensely. Just a thought for you!

    • Thanks for the responses! Much appreciated, ladies.

      I haven’t really looked into refinancing my loans, but it’s something I know in the back of my head that I should delve into. I don’t have multiple months of savings right now (maybe a month tops), but I’m not too concerned at the moment, I guess. This sounds terrible, but I know if I lost my job, or had a terrible medical/car expense, etc, my parents would loan me what I need to get through a rough time. Not something I should rely on, of course, but it makes it hard for me to justify letting money sit in a bank when it could go to loans.

      • Not trying to be snarky, just putting this out there…how intimately do you know your parents’ finances? I’m assuming since you said they would loan you what you need they’re relatively well off, but what does that exactly mean?

        Are they still working, or are they retired? If retired, how many years of money do they have saved? Do they own their home outright or are they carrying a mortgage? How is their health? How was THEIR parents’ health? Does heart disease, cancer/etc run in their families that would cost a lot in medical bills? Do they have any debt?

        I only point this out because unless someone knows intimately the facts behind their parents’ money, it can SEEM like they can afford to give you a loan when they really can’t. They may have the money to give you, but it can jeopardize their health, retirement and their home.

        I know I have a lot of cautionary tales, but I’ve known too many people who SEEMED to have it all together and were actually drowning in debt. And too many parents who were ashamed to speak up and tell their kids they just couldn’t afford to bail them out.

        Point being, if your parents can help you, great. But you should never rely on anyone else to help you–you’re the only one whose financial picture you really know!

  13. Anonymous :

    Did anyone else start saving later than their peers/what the books recommend?

    I’m 30 and due to a long series of unfortunate events, including mental illness, family problems and unemployment, I’m only just starting my “real” career. I’m single and don’t have anyone helping me. I feel so behind and it scares me to think of my future. I’m going to work on paying off debt and establishing an emergency fund before I can even think about retirement. I’m not a lawyer and don’t make a high salary so it’s hard.

    • Anonforthis :

      I’m Anonforthis from above with 400k in law school loans. This is my husband and I. Husband graduated from law school at 31, I was a bit younger at 27. Due to immense loans and clerking we didn’t really start saving for retirement in earnest until 29 and 34.

      Don’t lose hope. 30 is still very young in the grand scheme of things. My parents used to tell me that they had no idea how they were every going to be able to retire until they reached their early 50s and around that time the years of saving started paying off and it started to look possible. That’s more than 20 years from now for you. A lot can happen in 20 years.

    • Anon for this :

      Yup, I started at 28 with zero in savings, zero in retirement, and $65k in loans. I’m 33 now and have $35k in savings, $95k in retirement, and am debt-free.

      I’d prioritize an emergency fund first, then split your money between retirement and debt. Keep your fixed expenses low. I’ve always had a roommate and lived in older apt buildings. Minimize your commute so you’re not paying for gas. I haven’t had a car in years, but I realize that can be tough to do depending on how good the public transportation is in your area.

      Have you read Mr. Money Mustache? I highly highly recommend the blog. It was a huge inspiration to me — convinced me that saving money was going to be exciting and empowering and even fun, rather than some sort of long awful slog. I use the YNAB budgeting software (love the iphone app) and that’s what I would recommend for actual budgeting logistics.

      For increasing your income, read “I Will Teach You to be Rich.” You’ll do best if you can figure out both how to increase both your savings rate and your income.

      In sum, I was completely terrified about my finances 5 years ago, but I now feel financially secure, my savings rate and income are both continuing to increase, and I feel great about the future. You’ll be fine, really.

      • mustachian :

        I just started reading MMM and I am super intrigued. Also congrats on the awesome savings over 5 years! How much of your take home are you saving if you don’t mind me asking?

        • Anon for this :

          I’m saving about 60% of my take-home income right now. I could boost it by eating out less, and that’s my next area of focus. I can live very comfortably on $50k, so my goal is to get to $1.25m in the next 10 years or so. I’ll also likely keep earning money once I’m financially independent, just doing part-time things that I like doing, so I’m comfortable with the fact that $50k isn’t going to be $50k in 10 years.

    • Hey there–it’s really possible.

      My parents were dead broke growing up. They were 35 before they had jobs good enough to live off of. They really didn’t start saving for retirement until 37ish. Then they buckled down and really focused on saving. It meant they had to sacrifice more since they had lost time, but they cut corners and managed to save quite a bit. They’re retired now very comfortably, with plenty of money in the bank.

      30 is still very young. If you have high interest debt, that needs to be the priority. How is your job now? How is your health? If everything is relatively stable, I’d save just $1,000 or so, then split all extra money between debt and retirement funds so you begin earning compound interest.

      If you qualify for a Roth IRA, that would probably be a good avenue for you. In your situation, a Roth could double as an emergency fund, since you could withdrawal the principal you contributed without penalty if something pops up.

    • anonymous :

      Totally. My parents had years when I was growing up when they would sit down at the end of the month and decide what bills they could afford to pay. Salary increases happened, my mom found work, and now they’re happily retired in their mid-60s with a second home. (They’re government workers, what it’s worth, so it’s not like they acquired some crazy salary).

    • Thanks for the kind responses, ladies. It’s intimidating but I’m feeling a little more hopeful. I will start doing some research and reading that you’ve recommended.

    • Know Better Do Better :

      Life happens to all of us. I’m 40 with no retirement savings but I have a small pension that I will receive for the rest of my life. Getting ready to start my second career with the knowledge that I must kick it into savings and investing overdrive to ensure my future. I don’t beat myself up over it, it’s my reality.

  14. So I do contribute to my retirement savings (Canadian so an RRSP) but don’t come anywhere close to maxing it out. I’ve been trying to bump up my emergency fund which is almost at $15K and am maxing out the TFSA contribution room before I max out my RRSP. (I’m late 20s so I think this is ok).

    But my boyfriend does not. He switched careers a few years ago and emptied out his RRSP at that point to go back to school. He’s been working his way back up to a decent salary but the last time we had this conversation (I think about a few months ago), he wasn’t contributing to a RRSP.

    I don’t want to push him, especially because there is a clear income differential between us and I don’t want to make him feel it but I’m worried – he’s 30. Any idea on how I can encourage him to do so?

    • Pam Beasley :

      S, I am also Canadian. For encouraging your significant other have you tried pointing out to him that he will get a tax refund for rrsp contributions? That way he can take the refund every year and throw it into his Tfsa, or emergency savings account :)

    • Hi,
      I’m Canadian too and am curious why you are choosing TFSA over RRSP if you still have room in your RRSP? We are doing RRSP to get the tax refund, which we then flip back into the RRSP. From what I can tell the difference is really that in a TFSA you get no tax benefit today, but also pay no tax when you take the money out (because you have already paid tax on it), but in an RRSP you get a tax break today and pay tax later (hopefully when you are in a lower tax bracket at retirement).
      Any other Canadians out there who can weigh in on this? I sort of go back and forth on whether I think we are doing it right.

  15. I’m giggling because I was the OP that brought up savings burn out. And why am I giggling? Because I’m less than 6 hours away from boarding a plane for my first splurge! Talk about timing. YOLO ladies!

  16. I’m an obsessive saver – out of fear that one day I’ll wake up hating my job and needing to get out; fear of layoffs or being fired; etc. Saving gives me peace of mind. So I max out my 401k and save more than half of the remainder. (I realize I’m in a relatively fortunate position. Law-school loans paid off (also due to obsessive repayments the first few years out of school), no kids or other large financial obligations, kind of cheap tastes in apartments, restaurants, clothes etc. )

  17. anonymous :

    Early 30s. I max out my 401k and get a 9% salary match. So that’s probably about 2k/month. I had a Roth I started late in grad school that has about 15k in it. Between that, matching, and my 401K I currently have 27K in retirement. No debt. Probably save about 40% of my gross salary when you lump in emergency fund contributions but always feel behind because my 20s were a financial wash in terms of savings.

    • anonymous :

      ETA: my salary is 75k, so 40% of my gross income probably comes to less than some people make in bonuses on this site! Makes me feel better to think of it in terms of percentages, though…..

      • Wildkitten :

        And my take home is less than you put into your 401k. This s i t e takes all types.

  18. Anonymous :

    I’m always floored and disappointed in myself when I see these threads. I don’t understand how people can have retirement savings like this unless they have spouses or NYC biglaw salaries or no school debt. I’ve been out of law school for 5 years. My student loans are finally under 6 figures and I have a decent liquidable savings cushion (~$20k), about $65k retirement savings, and a modestly-priced house that saves me $$$ compared to renting. I also have a used car that I’m paying down, but the interest rate is so low it’s basically free money so I’m not in a rush to pay it off.

    I don’t have some crazy spending habit. I don’t take extravagant vacations or spend a ton of money on shoes or going out. I live a frugalish but comfortable lifestyle. I just don’t get where people get all this money! What am I missing???

    • Anonymous :

      I think it sounds like you’re doing pretty well! A lot of women on this site make a lot, a lot of money. It can warp your sense of what’s normal. The trade off, I guess, is working in Biglaw, which is not something I would ever want to do.

    • Anonymous :

      If it makes you feel better, I’m also 5 years out of law school and your numbers are much better than mine. And you have a house.

    • I worked in Biglaw in New York for four years and still didn’t even save the kind of money the women on this site talk about . . .

    • You’re not missing anything. I am the first to admit that the main reason I have been able to pay off $200k in law school loans and save for retirement is due to my biglaw salary, which, even as a first year, was more than anyone in my entire family has ever made in a year in income.

      That said, as hard as it is, try not to compare yourself to others. The right amount to save for retirement is the right amount for you, based on your spending habits, life goals, etc. And fwiw, you sound like you’re in good shape to me.

    • anonymous :

      Also, you’ll probably need less for retirement because you’re used to a less expensive lifestyle. I mean, my monthly budget is 2k, after I take out savings and retirement. It just wouldn’t make sense for me to wish, like an earlier poster, to hold out on retiring until I could guarantee 100k/year. I don’t even make that now!

      • Anonattorney :

        That’s a great point. I did NOT factor that in – the fact that I would not need the same amount of money because I wouldn’t have to spend X amount saving for retirement, paying off mortgage, saving for kids’ college, etc. I feel like an idiot. Whoops.

  19. Meg Murry :

    TL:DR version – do you care that tied up somewhere in your portfolio are companies that you really don’t believe in, for instance, a tiny percentage of my money winds up going to Haliburton and companies heavily invested in the frack gas industry, which I am really, really opposed to?

    Long version: does anyone here take into account what companies are included in your investment portfolio when buying funds, or do you just accept that sometimes your money is being invested in companies that you don’t really believe in but you can’t take the time to do individual research for every single fund?

    It’s not so straightforward with my newest company’s 401k fund options, as they really are pushing the products that are basically a Fund of Funds – but do your ethics come into play at all? For instance, the recommended investment vehicle to me, when I filled out the profile is the “JH Lifestyle Moderate – Active Strategies”. Within that fund is Prudential Jennison Natural Resources Fund, Inc. at a small percentage. The Jennison fund is made up of companies that “companies that own, explore, mine, process, and develop natural resources commodities” – including Halliburton, Exxon Mobile, etc.

    On one hand, I don’t have time to go down the rabbit hole of researching every single company with every single fund.

    On the other hand, it puts a terrible taste in my mouth to give my money to companies I am actively opposed to.

    And on my magical 3rd hand, I don’t want to give up any money left on the table with 401k matching, so I’m going to put some of my money given to my by my company into the limited Fund options I have.

    Anyone else feel this way?

    • Yes, I do index fund investing so I one a little of everything, including the evil corps of the world.

      I think of investing as the only way that not-wealthy people can get a little bit of the ginormous profits of these companies. I’ve seen my earnings go flat, drop, and stagnate since starting my career as an attorney. (My specialty was commoditized during the 2008 recession.) Investing is, frankly, the only way to stay afloat.

      I like to think that, on balance, I try to not be evil. I donate to charities, volunteer, vote for referendums and candidates that seek to help the disadvantaged.

      So like a defense attorney representing murderers or a geologist hired by an oil company to identify new (pristine) sites to drill, I’m just doing what I need to do to navigate(?) the crummy system I’m stuck in.

    • This sounds horrible, but when it comes to investing, I only look at results. I feel like the dad in My Fair Lady “I don’t have morals, I can’t afford them”.

      Most of my investments are in index funds or ETFs, though I do invest in some individual vice stocks (gas companies, casinos, etc). They outperform everything else year after year. Even when the economy hits, people still hit their vices, so they’ve been outstanding performers.

      I volunteer and make donations to charity but this is one I mentally struggle with but keep doing. I also do Lending Tree though where I loan funds to individuals looking to restart their lives or launch a business, so that soothes me a bit.

    • Spirograph :

      I also do index fund investing, so I have tiny bits of many companies I don’t necessarily believe in. I know there are mutual funds that specifically try to market themselves as “ethical” but I don’t see how that’s necessarily realistic (plus they often have such high fees that I would never consider them, and their value as an investment is questionable from a return standpoint). Like KT, results are more important to me.

      Maybe I’m rationalizing, but I figure there are few all-evil empires out there. Many companies I think of as oil giants are actually “energy companies” and also do a fair amount of work/research in renewables. While some mining companies are deplorable, exploitation of commodities is necessary for my way of life. It’s hypocritical of me to hate the companies but use technology that relies on rare earth metals (medical stuff, cell phones, computers, hybrid cars etc). Many tobacco companies are owned by giant conglomerates that also make snacks I enjoy.

      So I guess the TL/DR answer is : No, I don’t worry about it.

    • Meg Murry :

      Thanks for the replies, and I’d be interested to hear anyone else’s opinion. I’m with everyone else in that right now I just suck it up and fall into the “can’t afford morals” camp. But it strikes me as so wrong sometimes – here I am on one hand fighting corporate personhood and fighting everything this company believes in, but then I am giving them my money, so they can give it to political candidates I don’t support.

      However, I also am wary of the market in general (I watched family members end up screwed because the markets took major nosedives at the times they most needed the money, like the 4 years their kids were in college or the years they had intended to retire) so I am trying to hedge my bets with other investing options like real estate and hope to get into Lending Tree someday once we have less debt and more money to utilize.

      • Anonymous :

        I’m somewhat amused that you are so concerned about giving them your money, but don’t appear to be concerned that you are becoming an owner of this company and vested in their future success. It seems pretty hypocritical to me to be “fighting everything this company believes in” while simultaneously profiting from their success. But I also doubt you are actually fighting everything they believe in, as you appear to be using a computer that requires power from some source. You appear to be saying that it is okay for you to invest in questionable (by your standards) things because you want to make money, but it isn’t okay for a company to make the same choice.

        Personally, for the things I am concerned about morally (and the energy industry isn’t one of them), I make the choices that I’m going to based on what I can do and I figure out how to help the world in the ways that I can make a difference. But then I wouldn’t say I’m fighting the company or majorly opposed to its business because the fact of the matter is that I’m not.

        • Meg Murry :

          Ok, maybe my rhetoric was a little strong. It still squicks me out to give them money to run their businesses and then for me to take that money, but my only other choice is to leave part of my compensation on the table (my employer contributes a flat percentage, not a match).

          But since I’m not gettig rid of all my worldly possessions to live off-grid in my yurt with my artisianal goats to provide me with milk and wool, I suppose I can’t complaint too much.

          It still makes me feel like a hypocrite though, damned if I do and damned if I don’t. The companies above are only a few examples – I also don’t really like that some of my funds invest in Walmart, for instance, and I’m sure if I dug deeper into all the holdings there would be things in there that I really didn’t like.

    • Anonymous :

      I do not care. I feel like maybe I should, but I do not. I don’t have the time or energy or skills to take that on.

  20. I have a Roth IRA that my dad set up for me when I was 16 and have been contributing the max to that every year since and so I feel very fortunate that he did that. Now that I’m in my career, I contribute 15% of my salary, plus I get a 3% safe harbor (fully vested) and a 3% match (vested after 5 years, I’m about six months in with no plans to leave before five years but who knows). I’m hoping to bump it up more as I earn more, but who knows how or when that will be.

    My bigger issue is my husband is much farther behind on retirement savings. He’s just starting to save, he puts in 5% and gets a 5% match but makes about half of what I do and has some pretty significant student loans we’re trying to pay off. I’m hopeful we can start to bump up his savings as we start aggressively attacking his loans but I just don’t know. This post has inspired me to talk to him this week about what we can do, he’s a bit more head in the sand about our fiances than I am.

    • tooidentifying :

      Same here, my dad also helped me set up a Roth IRA when I joined the military at 18 and insisted I set up direct deposits to max out my contribution every year. Best financial move ever. My husband is lucky that we started dating when he was 23 and I told him to start one, but he put away only small amounts every year but he didn’t contribute to his retirement accounts aggressively until we got married and I took over the budget. We now both have private sector jobs with enough income to comfortably max out our 401ks, and we also contribute to our Roth IRAs in years that we have lower income (hooray for unpaid parental leave?). I have almost $200k toward retirement, DH has a bit less than $100k. We’re both 32.

      Luckily, neither of us had student loans to worry about. Daycare costs are killing us right now, but we still prioritize minimum retirement savings of max pretax 401k contribution (which we do for tax purposes as much as retirement savings). I feel like we should probably be saving at a higher rate, but we’re not willing to make the lifestyle sacrifices right now. Besides, I can’t imagine we’ll retire in our HCOLA, and in 5 years the daycare costs will be gone, so we’ll take another look then.

  21. I’m 27 and contributing the max to my 401k that my employer will match. I just opened a Roth IRA last year and plan to put in the max every year. I have $7k in car loan debt but no other debt. I pay my credit cards off in full monthly.

    My issue is I’m trying to save that 3-6mos of my salary that is recommended so I have something to fall on just in case. I guess I just need to more actively budget because I’m having a hard time cutting back on my spending but at the same time I don’t spend beyond my means. I’m a consultant in an in demand field so I’m not too concerned about job security but I also want to retire early. No idea if I want to have kids or not. Fortunately my boyfriend of 4.5 years is a big saver so there’s that but then I think I end up spending more to make up for his stinginess. I got a 9% raise last August that I’m finally starting to feel the effects of so hopefully I can build on that. I just sometimes feel like I don’t know where my money’s going even though I log into my accounts almost daily lol. I need to be more vigilant and have more self control I suppose.

    • I think that’s where something like Mint.com comes into play to help you see where your money is going. It puts all of your accounts in to one spot and it categorizes your spending. It’s MUCH easier to log in and see “ok this week I spent way more on Restaurants than I realized, so maybe I should cut back next week” than just a laundry list of charges on your credit or debit card. Mint isn’t great for investments, so I use Personal Capital for that, but it’s so great to have everything in one place.

      I’m a little obsessive with my Mint account, I check it every morning, but I never merged mine with my husband, so the other thing I do once a month is use Mad Fientist’s spreadsheet to put all spending into: http://www.madfientist.com/financial-independence-spreadsheet/. I’ve altered it a little bit so I can see what percentage of our spending each month goes to what categories but it helps tell us (me, because he doesn’t really care about the details) where the money goes.

    • As AW said, keeping track of your budget with Mint.com or just obsessively going over your credit card statements and writing down where you spend cash can be mind-blowing.

      For a long time I made a REALLY good salary, but never seemed to have cash. I had pretty modest taste, didn’t make big purchases like on clothes or makeup or jewelry, had a modest apartment and a entry-level car..I couldn’t figure it out.

      Looking at all of my transactions, I realized I was a horrible fritter-er. $4 for a magazine there, $7 for a lipstick, $10 for takeout, god knows what from Target, etc. I was frittering away hundreds of dollars on really ridiculous “small” purchases, and that really added up. Once I realized that and nipped it in the bud, I suddenly had hundreds of dollars to invest every month.

  22. Both 30 years old. DH contributes 7% and gets 3% match. I contribute 6% and get 3% match. We have ~$75k in 401ks and rolled over IRAs. We have $20k cash emergency savings, and another $20k in general savings (when it gets closer to $50k we will invest in funds that can be easily liquidated). No kids, but a mortgage. No other debt (apart from nomial car loans with super low rates) to speak of. Until the new home 9 months ago we were saving like mad for the down payment. We are now TTC and are anticipating increased expenses in 12 months. I wish we were contributing more to 401k, but given TTC we are really focused on growing liquid savings (the $20k to $50k account) in the short term, while also increasing 401k contributions 1%/year in the near term.

    Neither of us had retirement savings until 26, one by choice/naivety the other didn’t have one available. I, too, feel like we are so far behind when I read this b!og, but then when I talk to friends I think we are so far ahead of them. We are just going to keep doing us, I suppose.

  23. Pam Beasley :

    I’m in my late 20’s. Currently I have 9 months worth in an emergency fund, and am working towards a year. I have 20k saved for replacing my older vehicle when it dies. The sum of my retirement accounts (personal and employer matched) is 107k. I am pretty financially conservative and want to save as much as I can early in my career, in case their are road bumps later (layoffs, kids, etc).

  24. We are both 38. I have a TSP (federal retirement savings plan) with approx. $30K and old 401ks with about $100K total, and a Roth IRA with about $70K. I just started a new in-house gig but am maximizing my 401k contributions and getting a modest (3%) match. My husband has $70K in a Roth IRA and $100K in an old 401k. He is now self-employed but not saving for retirement because he is not bringing in significant income. We also have about $100K in cash savings (I am paranoid about job loss because I am making most of the money) and have set up 529s for our three kids with about $30K total so far.

    We are both attorneys but our combined income has never been more than about $180K, and is more often $100-150K. I think the key for us is that we minimized student loan debt by getting scholarships, then paid off our loans pretty quickly with my clerkship bonus. We drive old cars and live pretty frugally except I like to spend money on kids’ lessons and camps rather than going on nice vacations. We live in a semi-high COL city (think Chicago, not NY).

  25. I am 42 and max out my 401k at $18k per year. So does my husband. However I took ten years off work when we had kids and was contributing NOTHING.

    We have about $400k-$450k in retirement accounts and I think we are very behind. The good news is our $1.2m house is just about paid off…but we also have college education to pay for…which we only have $75k saved :(

  26. lucy stone :

    I am not as baller as the rest of the ladies on here, but I’m sharing in hopes it will inspire a few people. My first job I was 25 and earning about 60k. I started out saving 10% of my income in my deferred compensation plan (I’m government so it’s 457 for me) and stuck the small raises and COLAs I received in there as well. My state changed our pension plan and I took a paycheck cut because of that, but I kept saving 10%. In 2014 I got a big promotion with a big raise and now earn around 95k. I’m 32 now and I’m maxing out my 457 and my employer also has a pension plan that saves ~12% of my income, in which I’m fully vested.This year between pension and 457 I’ll save 31% of my income for retirement. Our next goals are to build up an emergency fund and then start aggressively paying down the house. I pay $800 in student loans every month (PSLF will kick in for me in 2009). My husband started a business during this time and we did a pretty decent job at living way below our means except for a few splurge vacations. We clip coupons, drive old cars, and won’t buy clothes if they aren’t at least 20% off. I hate doing this sometimes but we have no debt besides our house and student loans and I feel like I’ll be able to walk away from law a lot earlier than my peers by not having golden handcuffs.

  27. Anonymous BigLaw Associate :

    My husband and I are mid-30s. I have no debt except a very low interest car loan that I treat as installment payments. He has ~150k in student loans, but I think we have a plan to pay those off in 3 years.

    We max out out 401k (neither of us gets a match). The bulk of his would be savings go to his loan servicer. The bulk of my non-retirement savings (50-60k/year) is currently going to saving for a down payment on a home. It would be lovely to not have 4 people in a 2 bedroom apartment, particularly when both adults work from home!

    • Anonymous BigLaw Associate :

      I meant to mention that one thing that makes me nervous about retirement is my (good) genetics. Many people in my family appear to live at the limits of human lifespan. All of my immigrant grandparents lived past 100 (and two past 110!), and my parents are in their 70s and without any health problems at all.

      If family trends hold true, I may be retired for as long as I am working. I know this makes me really lucky, but how have others taken this into account when planning for retirement?

  28. I’m really late with my retirement savings. I did well over the last two years and feel that I have a fairly solid plan going forward. But that plan only works if I stay at or around my non-NYC large law firm salary, which makes me feel handcuffed. Right now I am maxing my Roth 401k (almost all in ETFs), paying a bit more than minimum on student loans, and throwing everything else into what will be 12 mos of emergency fund by the end of the year. I get no match but do receive profit-sharing in my 401k, though I don’t know how much that will be at this point. I am also maxing out an HSA, which I don’t expect to spend, but of course will if needed. Beginning next year, I will max the Roth 401k and HSA again, figure out how to structure my emergency fund to get the best no-risk return, and throw every extra penny at loans. I expect to have the loans paid within 3 years. After that, the plan is to add an IRA every year, save a down payment, and then invest remaining funds in the market. I may be nearly 50 by the time I own a house. The calculators say it is feasible for me to have a retirement income essentially equivalent to my current income if I can hold steady at this rate of saving for 25 years, but that feels like a long slog.

  29. I started saving for Retirement immediately with my first job out of college and now am saving 12% and enrolled to up it 1% every year. My company matches 7% (1:1) and also gives us 10% profit sharing every year. My boyfriend and I work at the same company so, same matches and profit sharing. I am not in law so do not make the salaries like most here, but am doing well. I am 32, owned my house (on my own) for 6.5 years and refinanced so i’m in a 15 yr mortgage and feeling like it actually will be an investment property one day now that i’m not in an FHA loan. I also started a Roth when I graduated and max it out every year. I am fortunate to have no student debt (thanks dad), and my car is 0% interest and more than halfway paid off. The market is obviously rough so my 401K is taking a hit but is around $220K, and Roth around $25K or so. My boyfriend is 8 years older and I have more than he does, and he has student loans. This tends to worry me, but honestly I never feel like I’m doing as well as I should be with saving either… wondering if that is normal or just me being a stress case! I have a decent emergency fund but you just never know.

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