How to plan for retirement/savings?

Question

My fiance n I are planning for our future. We dont have any debts/car payments pending and plan to get married n buy a home.

We both earn 130K per annum...before taxes...our monthly expense comes at around 2500$ out of the 7400$ we make per month after taxes....we need to make sure that we can save enuf for our retirement.

Could any one suggest what percetage of our per month income should be spend on home mortage/househodl expense/savings/retirement etc?

Thanks!

Answer 1

You're already one step ahead of most people because you're developing a plan for your income, savings and retirement.  Since each family has a unique situation, it can be helpful to speak with a financial planner.  Here are a few tips for you:

* If you and/or your fiance have a retirement savings plan offered through your employer where you can make contributions, you should give consideration to participating in this plan. It can be especially helpful if you do not have a lot of tax deductions because many plans offer you the option of putting in money pre-tax.

* You should consider one where you a pay a fee for his/her services so you are getting unbiased advice (some planners get paid commissions and may "push" products).  See if you can get recommendations from family or friends when looking for a financial planner.

* Check out all the different calculators on the website bankrate.com.  You can play with numbers to see what happens when you allot your funds in different ways.  It also has suggestions for how to budget (% for housing, % for food, etc.) your money.

Hope this helps.  Good luck!

Answer 2

A good book to read is "Rich Man, Poor Man".

A good way to live your life is to pay everything in cash, use credit cards and payments to build a credit base, and to invest your unused income in mutual funds.

Once you have started a savings program do not ever touch it. Just forget about it!

Answer 3

Sorry, but to calculate how much you have to save for retirement, we have to know how many years from now it will be. Anything else will be guessing.

Answer 4

Just plain and simple. 15% of your income.

If you want to learn more visit this website DaveRamsey.com

Probably the best financial tips you will ever find are here.

Answer 5

Congratulations for being debt free.  Isn't is wonderful to have so many choices?   Firstly, make a budget.  A budget isn't a punishment, it is a tool that you can use so that you never have to worry about money ever again.  Put everything in your budget.  Don't forget the annual, biannual, and "sometimes" expenses like car registration.  Add a line for savings and another for cars.  Save up for your cars and pay cash.  Never finance anything that loses value over time.  You car loan becomes"up-side down" the moment that you drive off the lot and you owe more than the car is worth.  Save up, negotiate, get the best price, and pay cash for your vehicles.  That way you are getting the interest instead of paying it.

In order to give you a "comfort zone" and allow for those future choices (like maybe staying home with a child), I think that a house payment should be no more than 1/4 to 1/3 of your monthly net  income.  In your case that would be between $1800-$2400 per month, INCLUDING taxes and insurance.  While there are those that will tell you to buy the biggest house that you can afford, with the biggest payments,   I don't agree.  I think it is better to buy a bit smaller and pay off the house as soon as possible.  You can always get a bigger house later with the equity.  I know that people talk about the tax deduction but I would rather pay the income tax on my earnings and have no mortgage payments then get a write off that is worth less and less each year.  You don't want to be house poor and unable to actually live your life and have some fun. Also once the house is paid for, it frees up that money for YOU to invest and collect the interest rather than pay interest.

  As far as your retirement, you should be contributing the maximum allowable to your 401(k) or 403 (b) plan at work. The maximum is $15,500K per year each.   Since you are both over the income limit, you cannot do a Roth IRA ot a traditional IRA so that is why it is even more important to fully fund (contribute) to your 401(k).

  I, personally, believe that 15% of your net pay should go into savings and if that is too much for you, then at least 10%.    Since you two are such high earners (congrats on that too), you need an emergency fund of at least $50K (6 months take home pay) and preferably $75K (9 months), in liquid or easily liquid form in case of an emergency like a job loss or a new transmission.  Having an emergency fund means that you don't have to turn to credit cards and the high interest that they charge.  Bank of America has a "no-risk" CD that allows you to take the money out before the CD term is up without penalty if you need it.   You can "ladder" the CDs so that  one of them comes due each month.  That  way you are protected from fluctuations in the interest rates.  All of your money won't come due at the same time.  And if interest rates go down you only have 1/12 going in at the lower rate.  After you get that emergency fund in place, then it is time to think about retirement.  You should talk with a fee-only Certified Financial Planner or three.  Someone who isn't selling something for comission. Have them draw up portfolios for you, and then pick the plan and advisor that you like.

  Don't go into debt for your wedding.  Have the wedding that you want, but within reason.  Do you really want to still be paying for your wedding on your 1st anniversary, or your 2nd? Stay out of the credit card trap.  Credit card debt is like quicksand only the death is much slower.

  You both sound like very nice and intelligent people.  Congratulations on your upcoming marriage and have a very happy life.

Answer 6

As much as possible!! That advice of saving ten percent of your income and investing it is just a myth  That will not be enough for retirement.  Save for today so you won't be working at McDonald's tomorrow.

Answer 7

You  need  to  speak  with  a  financial  advisor  or  make  an  appoint  with  the  accountant  who  does  your  taxes,  they  will  be  able  to  guide  you  financially  and  help  set  up  retirement  accounts for  you  and  your  spouse.  Good  Luck.

Answer 8

Hi,

This might help you:

http://where-to-invest.blogspot.com/sear...