Tag Archives: retirement

Mint’s "Goals" Depress Me.

It’s been a while since I’ve written on here because I’ve been so busy lately. Which is a good thing. I’m working a full-time job, spending some time on a side project, and not spending all that much money. All in all, I’m doing “good.” Heck, I’m doing amazing right now in relation to how I’ve done at any point in my life before – financially, personally, etc.

Yet I feel so far away from reaching any of my goals. Mint’s new Goals feature makes my future look terribly bleak. Especially given that my current salary — of about $120k per year, give or take — is temporary at best — and even WITH that salary I can’t save enough to reach my “goals.” At least according to Mint.
I made four different goals for myself…
Emergency Fund — I have my $8k in that, and it’s the only goal I’ll reach.
Save for Grad School — I need to save $110k, I’ve saved $1.4k. Yikes. At this rate I’ll go to to grad school by the time I’m 90.
Buy a Home? Yea, right. I need to save $207k for a downpayment. I haven’t really saved anything for a downpayment yet, but I’m counting my various non retirement investment as savings for a downpayment (which, it is if I ever want to buy a house.) Ok, so how much do I have saved now? A whopping $13k. Mint so nicely reminds me that I’m “4 years and 10 months behind” my savings goal. Granted, I wrote that I want to buy a million dollar house – but that’s not unreasonable where I live. That’s a pretty small house where I live. And I’ll never do it. Ok, so I’ll rent forever. Or I need to more to Kansas (I guess I’m renting forever.)
Retirement? Well, I’m doing OK on that goal. It doesn’t LOOK like I’m doing ok since according to Mint I need to save $6,362,665 by the time I’m 65 to hit my retirement goals. Yikes. Yea, so that’s giving me $80k per year in retirement income and I doubt I’ll need that much money when I retire, but I wouldn’t mind having it. I have $22.8k saved so far, at 26. You may say I don’t REALLY have $22.8k saved because that money will probably have to go to the down payment on my house one day when/if I want to buy one. Which SUCKS because I don’t want my retirement savings to go back to zero.
I know it’s good to be honest with yourself about your goals and how much you have to save, but really this is just terribly depressing. And as I contemplate seriously applying for graduate school next year, I am forced with knowing that grad school will make my goals even further from ever becoming a reality. It almost makes me want to give up. I’ll never own a house and never have enough for retirement. I’ll be lucky if I can buy myself another car when this one dies.

Early Retirement, What it Means to Me

I’ve been thinking a lot lately about the concept of early retirement. From reading blogs like Early Retirement Extreme and Free at 45 I’ve begun thinking about the true meaning of life. Not from an existential standpoint, which I’ve already thought about long and hard, but from a view of what every waking moment of my day is worth from now until my death.

My parents and their friends are getting old now. By old, I mean they’re in their late 50’s and they are really starting to look old. My dad is dying of cancer so he looks even older. When I was a kid, I thought, well, I want to live forever. I never wanted to be young forever. I guess your late 20s is when that thought pops into your head. I don’t really want to be “young” forever. I feel like one’s 30s are the perfect mix of being young and old. And the 40s aren’t bad either. But once you hit 50 your body does start to seriously age. You can definitely work hard at keeping up your body through physical exercise, eating right, etc, but the years take their toll on every body.

When I think about early retirement, I don’t have a dream of retiring to some desolate island and relaxing on a beach. I dream of working hard but doing what I want, when I want. I want to get to a point where working freelance or part-time on my own hours won’t kill my bank account, where my savings are large enough that the long-term stock market gains will provide a substantial portion of my income.

So over the next few weeks, I’m going to work on calculating exactly what all this means from a financial standpoint. What year could I “retire” from 9-5? How much do I need to earn now and in upcoming years to obtain this goal? How much do I need to save? And when exactly can I retire “early?”

My current plan is to try to save $6,000 per month while I’m fortunate enough to have a job that pays well and low living costs. I’m not sure if this is maintainable over the long term. I’ll update in the near future with some further calculations to determine how much I will need to save each month to meet my early “retirement” goals.

Trying to Get My Parents to Budget is Like…

What would be the correct metaphor here? I don’t even know. My parents are way worse than I am when it comes to finances and both of them are in massive denial over their spending problems. It doesn’t help that my dad likes to blame my mom for everything and sees no fault in his own actions. Ever. Trying to get them to agree on a serious budget is like… impossible.

Towards the end of 2008, I made my mom sign up for a Mint.com account so I could see exactly what they were both spending all the money on. My father would never let me spend time on his Quickbooks, where he says he carefully tracks all the finances. When I visited home recently, I sat down with my mom to review their 2009 spending. What I saw didn’t shock me, but it scared me a little.

They spend $13k a month, on average, not counting my sister’s tuition, which they pay in full as well. Neither of them are working. My dad receives a sizable pension and disability right now, but not enough to support that kind of spending. This year, he told my mother that they should be spending $6-$7k per month at most. The 401k will be available next year, so he keeps saying “once we get the 401k we will be fine. We just cannot spend a lot this year.” I’ll talk about the 401k issues later. But for now, simply, my parents need to spend no more than $7k per month on just the two of them and their house. That sounds like it should be do-able, right?
My dad told my mom that she can spend $2.5k on all her stuff per month, he’ll spend $1.5k, and the remaining $3k will go towards the mortgage, taxes, insurance, and other necessary costs. So I sat down and worked out a $2.5k monthly budget with my mom. I think this helped her start to understand how much things actually cost. She spends so much money on clothes and other random things. Not really nice things usually. My dad spends most of his money on medical (he has terminal cancer and is being treated in the city so pays a lot for transportation and his co-pays, pills, etc.) Both of them spend way too much on food per month (about $1,000 total for two people!) though I let my dad’s food spending slide to an extent because he earned the entire household income for his entire life, is dying within the next few years, and loves food more than he could ever love anything or anybody else. He won’t get to enjoy his 401k/retirement years, so I’ll let him spend a little too much on food without being picky. He deserves at least that.
My mom, however, looks at the budget and says “ok, that helps a bit. I don’t think I can stick to that. But it helps me understand how much $2,500 a month is worth.” Ugh. She doesn’t understand that she has no choice other than to stick to the budget. Granted, my dad has about $1M in the 401k, and even with the $300k left they owe on the house, they still are doing ok spending too much, for now. It’s hard to put everything into perspective, because the nitty gritty of the situation is that my dad is going to die within the next 10 years and my mom could live a very long time… so she’s the one who should be worried about having enough to live on for the rest of her life. And given her spending habits, I’m not so sure she will.
The unfortunate thing is — the $1M in retirement plus pension may be a good retirement amount for this day in age, but my father’s health costs may continue to rise before he passes. With terminal cancer, you just don’t know how much the treatment will all cost, but it’s going to be expensive no matter how you look at it. My mom will surely be left with a decent amount of retirement savings, but not the $2M my dad had hoped for them both to retire on before he became ill and before the stock market crashed. So she’s going to HAVE to budget eventually. She can’t just be in denial about her spending forever. Or can she?
It’s not just her, though. I went through their entire budget and figured out that, not counting things like food, clothes shopping, medical, and other purchases that should fall in my mom and dad’s personal budgets, last year they spend about $9,000 per month (!!!) on everything else. Between the mortgage, home taxes, insurance, utility bills, cell phone bills, they spent about $3k per month (which is how much more they should be spending beyond their personal budgets.) But then it gets messy. Where does that extra $6k per month go? Well, it goes to a lot of things… house cleaning (every week, last year it cost about $10k for the whole year!), home improvement (painting rooms, new furniture, fixing the air conditioner, etc), and then other random things that we couldn’t categorize, even after all of the checks were in order and labeled.
Right now, I’m mostly concerned that my mom will not have enough money to live for the rest of her life. I’m hoping that once my dad is out of the financial picture she will let me sit down with her and plan a serious budget. Because currently my dad won’t openly discuss all the finances with her (he calls her stupid, etc, and doesn’t have patience to explain to her the reality of the situation. He just says “spend $2,500 a month and no more”) so once all that’s left is my mom and all the banking accounts, I can help her seriously budget. It’s really not a place I’m comfortable being in. My father has always been set on leaving behind money for his kids, when I talk about my own retirement savings he would say “why are you saving for retirement? You’ll be fine with what we will give you and your sister after we’re gone.” Or something along those lines. I didn’t listen to him, I’ve been saving, but it just is unfortunate that in the end, I’ll be the one to budget that dream of my fathers out of the picture. I know if my dad was budgeting, he’d factor in what he’d like to leave behind for his heirs. My mother won’t do that. Or even if she does, she’d somehow manage to spend it anyway and use it as her yearly cushion. I don’t want to have to convince her whether she should save money for my sister and I, that is just an awkward place to be in. That’s the least of my concerns, but it all factors into my parents extremely poor financial habits and ability to think about anyone else by themselves when it comes to money or anything else.

Paying Yourself a Salary

In my last post, an anonymous user advised that I should put all of my income into a business account and pay myself a set salary out of that account. While that is not a terrible idea, I believe it is not the best approach in my situation. Mr. or Ms. anonymous, I would like more information on why you feel this is a good idea, based on the following information. And for the rest of you, I’d love to hear your opinion in a comment about if this concept would make any sense.

If all goes as planned this year (which, chances are it won’t)…
1. I can earn up to $120k net for the year in a W2, hourly position.
2. I can earn up to $40k in 1099 freelance income if my side projects remain consistent throughout the year. I’m thinking it will more likely be $6k.
3. I may earn much less than this on either or both areas of my income streams.
The concept of putting all of my earnings into a business account and then paying myself a salary makes sense only if all my income were 1099. But there is no benefit to setting up an LLC and a business account for my business income if my major source of income is now W2.
Thus, instead, I’ll be looking for ways to shelter as much of my income from taxes as possible. That means in a way I will pay myself a set salary for “spending money” and the rest will be put places that I can’t touch now or for a while, unless absolutely necessary.
Do you think this is the right way to go about this?

Dear Investing Newbie and Simple in France

Since both of you left such great comments on my last entry, I thought I’d follow up in another entry to clarify, while still being vague enough to hopefully keep anyone who finds my blog from knowing who I am. (It’s getting tougher and tougher to do that while being 100% honest on my earnings!)

Simple in France recommends that, since I don’t know exactly what my income will be over the year, I budget for one that’s “shoestring” and save everything else. There’s no harm in saving. And I agree. I have a feeling my income this year will double, if not triple the $60k I was making last year. Yes, there is a chance, albeit a small one, that I could even hit $200k. I could also “hit” $10k – if for some reason after a week into the job they end up hating me. Not saying that’s going to happen, but anything is possible. And it’s so easy for them to say so long when you’re not a full-time employee. I can’t count on anything.
I’m trying to continue my goal of having diverse income streams, but it is difficult to maintain more than one job when one is a major 40+ hour-a-week commitment. The good thing about being on an hourly contract is that you’re pretty much limited to 8 hours a day of work. That means you probably won’t be working 60 hour weeks at one job, or if you are, you’re getting paid for those extra hours. So that leaves room for picking up (or keeping) other freelance gigs. My biggest concern, though, is that I’ll be asked to work those extra hours and I’ll struggle to keep the balance of my diverse income streams. At least when I’m in a contract position I feel like it’s fair to accept other work (unless the contract is salaried and specifies they own you for a set period of time). I never want to only have one income stream, I know I can be laid off at any time, or a company could go under. I don’t care how much I’m making at one job, I need something else that at least covers the rent and minimal food just in case. At the moment, I have a part-time contract gig that moved from 8 hours a week to 16 hours a week recently. That pays slightly less than the 40 hour a week gig, so if I had to chose one to keep it would definitely be the 40-hour-a-week one. But there’s no harm in working 4 hours extra 4 days a week (or spreading out my time even more) to save more money. And that’s my goal. Save as much as possible this year. I’ll probably — best case scenerio — get myself into a ridiculously high tax bracket, have to pay self-employment tax on some of my income, and end up earning not as much as I could have at a lower-paid, full-time job with benefits. But, I think it will work out ok, as long as I can keep this all going. And I’m going to make this work somehow. To prove to myself I can. And to save a lot of money. Because right now I’m either look at going to grad school or buying a condo (???) in the next 1-2 years and I don’t mind keeping my spending low to increase my savings.
Investing Newbie asks if I know what I’m guaranteed as income, and that I should budget based on that. Yes, and no, is the answer. As stated above, in a contract role “guaranteed” for only half the year, the most I’m guaranteed for — even if I am amazing at my job — is 6 months worth of work. They also are perfectly free to tell me that they don’t want me to come back in to the office at any time. They could even tell me that before I start my first day. I doubt they will, but I accept weirder things have happened. Then, my other income streams, while smaller, are a little bit more predictable. I have a blogging gig which, at the most, can bring in $500 a month. That I’ve been doing for a while. I got behind badly in Feb but did well in March. I just need to get up early and spend about 30 minutes to write a blog post for 20 posts a month. It’s totally do-able. That gig is probably the most stable of them all, but the company that runs the blog could chose to shut it down at any time. Then there’s the 16-hour-a-week project I noted above, which is sort of guaranteed at 16 hours per week for the next two months. It’s with a stealth startup where I’m doing some writing work that I can basically do whenever (ie, night time, after work, weekends.) That also could end at any time. So the simple answer is — I have no idea what my gross income will be for the year. There’s a good chance it could be way more than I’ve made in the past. There’s a chance it will be less. I don’t know what to plan for. Other than to plan for a little bit of income ($35k about) and budget off of that.
Investing Newbie also writes that I could open up a plain savings account with a good rate and save up money for 40+ years or to invest if I feel comfortable with it. I do have savings accounts and investment accounts, and I plan to split my earnings among those accounts. Since I started working, I’ve put $5,000 a year into my Roth IRA, but if the best-case scenario works out this year, I won’t qualify for a Roth. Again, not the worst problem in the world to have, but I would like to put money away for retirement. I also don’t want to put everything away for retirement because — as I said — I either want to buy a house or go to grad school in the next 1-2 years. So where does that savings go?
Up until now, I’ve been fairly aggressive in my Sharebuilder investment account, in terms of stock and ETF purchases. I started slowly and was down a lot (like everyone else) when the markets crashed, but kept investing when they were down (bought a lot of a few companies I thought were on sale) and am now up 25% and have an account worth about $10k total. Still, I only invest $100-$400 a month. It would be a lot harder to put $2000 a month into my volatile stocks and ETFs. I also have a Vanguard account (besides my Roth IRA) that’s just a mid-cap index fund. It’s doing ok. I could put more money into that (or open up another taxable Vanguard fund) but I’m still a little nervous for shorter-term investing. Granted, I’m young enough where if my networth goes down I can recover. Maybe I’ll have to take out a bigger loan for grad school or not buy a house in the near future, but it wouldn’t kill me. I’m fine renting and living with roommates. I don’t need a lot to be happy.
So, yes, I could just put whatever extra money I make over my shoestring budget and put it directly into a basic savings account or FDIC-insured laddered CDs. I’ll probably lean more towards investing anything over my monthly expenses. I think for the first time in my life I’ll have access to a 401k plan (though I’m not sure how good it is) so it probably makes sense to put some money away pre-tax. It’s SO HARD to figure out if that makes sense, though. If my yearly income is less than $80k (or whatever the cut-off is for a single person this year) I am better off funding the Roth IRA first. But if it’s more than that, the 401k makes a lot of sense. I probably won’t know until next December which of those will be accurate. I guess there are ways to fund one thing and move money around until the year is over, but that’s a huge pain. I’d like to just pick something and stick with it. The Roth IRA has been the no-brainer for the last few years, but it sounds like I should take advantage of the 401k while I have access to it.
Other places I could stash my cash? The 529 plan (which has, like, $1200 in it right now (enough for – what – one month’s worth of MBA textbooks?) which is only free from federal taxes… I could buy a condo now and give up on my grad school dreams… and also trust that I can continue earning some decent income for the next 50 years, I could put about $2500 more into the HSA plan which I may or may not continue… I’d have to get it in there before I cancel the insurance, and pay a yearly fee forever to keep the account open, but that’s a place where I can put pre-tax money and not have to pay taxes if I use the money for health expenses… and that makes more sense than the FSA which is also available with my new employer. I don’t like the idea of FSA’s since you lose the money if you don’t spend it at the end of the year.
Anyway, I’m going off topic. I’m in a good situation right now all things considered, but the way I look at money, and savings, is drastically changing. I don’t understand how to lead a six-figure lifestyle. Especially one that isn’t guaranteed to be a six-figure lifestyle. It’s fine to live this year like I’m making $35k and ignore anything above that I make. But when in my life will it be ok to stop and live a slightly nicer lifestyle? Go for a massage every once in a while? Buy a good road bike? Get a better car (mine will die soon, so I will need to invest in another car anyway)? Sign off on a condo or small house? All these luxuries… at what point in income and income stability do I need to be at before it’s ok to spend more than a shoestring budget? Or is the key to never do that, no matter how much money you make?

Shooting Through My Glass Ceilings

This year has been full of fiscal ups and downs. After making a solid salary at a full-time job, I was laid off in February and ended up picking up part-time gigs which, while paying great by the hour, didn’t cover enough hours to meet my prior salary. And then I interviewed for a bunch of jobs and got a few offers. In the end, I landed a six-month contract with very strong hourly pay.

It’s almost funny how just a year ago I was writing about how what I was making then would give me so much extra to save, and then I quickly found that I while I had money to save, the cost of doctor’s bills and life kept my savings per month low. And now, looking at the next few months of income, I’m more excited than ever about helping my networth move out of being stuck in $35k. My goal, by the end of 2010, was to have a networth of $50k. Now, I’m aiming for $75k.
What will that take? Mostly, being amazing at my job, which I plan to do. Also, I can’t look at the number I’m taking home and get as much out of my bank account into savings accounts before I have a chance to get near a mall or travel website.
I’m not going to complain about how much I will make because I’m thrilled that I’ll be able to save for grad school and a house (MBA, here I come), but it makes savings a lot more complicated. I don’t know how many of you can relate because there’s a chance this year I’ll hit six figures. I’m not sure it will happen — I will only really know for sure next winter. It’s certainly possible for the first time in my life.
With that type of income I move out of the average American household and hit what many people in America would consider rich for a single person. In the least, there’s a chance I will make over the limits for a Roth IRA. For the past five years my Roth IRA has been my primary retirement savings vehicle. I’m not really sure where else to save money for retirement. I might be able to set up a 401k but it’s going to be kind of messy to do that since I’m a contractor. None of the companies I’ve worked for in the past have had 401k funds, so if I am able to participate, even without a match (there won’t be a match), I will. I probably should put a good amount of my monthly income into a 401k if I can open one. I can always max out my Roth IRA at the end of 2010 if I don’t end up making the higher end of my potential earnings. Or a traditional IRA if that makes more sense. I also may put a lot more into my 529 plan for grad school, though I’m nervous about putting too much in that account as there’s a chance I’ll never end up going to grad school. I do want to have children, so I’d like to think if I don’t spend my 529 plan for me, I can pass it on to my children one day. But that’s a long time off, it’s tough to put more than $100/month in that account without worrying about wasting money on that account. I can always take it out for something else, but I’ll have to pay a fine. And in my state the money put into that account is only tax deductible on the federal level, not state. Still, it’s probably worth it this year to put a larger amount than normal in that account, since I may not have access to a Roth IRA.
It is hard to plan when the amount you may make over the year is not set in stone. On one hand, it’s kind of exciting. It makes me want to work extra hard to prove myself and earn as much as possible. As I grow in my career, my blog title becomes more and more misleading. I’m not going to be overconfident with this as so much is up in the air. When I’m 10 years out of undergrad (in 2015) I will write a post on how my income fluctuated over the years. I’d love to know what will be in that post, but I like being surprised by life too.

Is Grad School Worth It? Financially Speaking.

I’ve been obsessed with the idea of applying to / going to grad school lately. Not for the earning potential post graduation, but for the chance to focus on an area of study and build up my skills so I feel like an expert in an area (at least until those skills are out of date.) But then I wonder… financially speaking, is grad school worth it?

Really what I need to look at is how much I will have when I retire. I figure I should have at least $1.5M in my bank account when I “retire” (although I plan to work at least part-time well into retirement, but at this point I want to be able to travel and freelance and not have to worry if I get sick and can’t work.)
At the moment, if I can live up to my quasi-frugal savings plans for the year and maintain my current job and occasional freelance income (say $70k per year pre tax) and save $20k each year, according to the compound interest calculator if I start with $30k today and save $20k a year for 30 years at a modest average interest rate of 3% I will have $1.052M in savings by the time I’m 56 and $1.65M by the time I’m 66.
It almost seems silly then to add in the cost of grad school, which will put me into debt and for many reasons, not guarantee I will make more than I am now later and certainly will not allow me to comfortably save $20k anytime during or after graduation from a graduate program.
Additionally, if/when I have children, it will also become increasingly difficult to save $20k per year, if not impossible. This variable could effect both the non-grad school and grad school potential scenarios. And since my 27-year-old boyfriend refuses to work a full time job or put an ounce of his occasional earnings into a Roth IRA, it’s likely that I’m saving for the both of us and our families. Which makes that $1.65M, esp with inflation, seem like a few dimes and a penny.
That brings me to wondering if I should just keep living like I’m living now for the rest of my life. No kids (they’re expensive.) Roommates. A small room. Living in an area where heat isn’t necessary. Cheap bills otherwise. Saving $20k per year. Cutting back when needed to make that possible. Retiring single at 66 with $1.65M (some of it would be taxed, of course, but that’s still not bad.)
Then again… why should I be living life to save for retirement? I can’t imagine ever wanting to fully retire — I see my grandmother at 80 spending her days in the casino and I think if I had the mental capacity she does at 80 I’d be working. I might be limited in my job choices but still, I’d be working because I don’t want to be the type who just sits around and “enjoys” retirement.
Going to grad school is probably an easier choice when you’re making $35k or less. But once you’re making $70k it’s a hard trade in. I’m looking more and more at MBA programs (my career counselor seems to decided that I should consider this path and is in awe of my knowledge of social networking and certain aspects of the tech business) but I don’t know. I don’t see myself ever really following an MBA path — working 100 hours a week, traveling more than I’m staying… I could do that maybe for a few years but not my whole life. How much more can I really earn with an MBA vs. 2 more years of experience that I can gain through my current or next job? Alas, these days I’m liking numbers a lot more than I used to… and I think I’d like studying applied math. I like spreadsheets.
The debt truly freaks me out. People go into debt all the time for school but I don’t know if I can. Partially its because I don’t know if it will actually be worth it for me to go to grad school. It would probably make more sense to give a loan to someone more focused than I am and more dedicated to getting a high salary, pay for THEIR grad school, and earn interest on that… then for me to go to grad school.
And, anyway, I read that in 25 years a dollar today will be worth $.32 which means that my $1.65M when I’m 66 will not be enough to get me through retirement (unless natural causes like stabbing myself help me reach those goals.)
How much are you saving for retirement? How much do you think we will need to retire in 2050?

How much should I save and where should I put it?

Lots of my readers think I’m a spoiled brat with a spending addiction, and occasionally I get a comment along those lines. Part of the reason I started this blog is that I agree with that statement and I’m trying to be smarter about my finances. Without the PF world I probably would be in debt by now instead of having $45k in savings. Yes, I have a shopping addiction. Yes, I need to stop making excuses for buying expensive clothes. Yes, I need to focus on saving more. But my biggest problem is not knowing where to save. It’s not the best excuse, but it’s true.

I can easily put away $5k per year in my Roth IRA because I always save up that much the year before (I overestimate on my taxes and pretend that money doesn’t exist) but beyond that I am not sure where to put my savings. Spending the money is, sadly, a lot easier than figuring that out. Again, an excuse, but I really don’t know where to put my money. With no 401k at work, I’m not sure where I should save. Do any of you have ideas for me?

I have some automatic transfers set up. $100 / month to ING Direct liquid emergency fund, $50 / month to Sharebuilder, $50 / month to my 529 plan. I’m not really sure how to save for retirement beyond my 401k or if I even should be saving more than that right now specifically for retirement. If I could figure out HOW MUCH I should be saving and WHERE I should be saving it, believe me, it would be a lot easier to save it.

My current accounts…

Checking: $375
Basic Savings Account: $301
CD / Emergency Fund: $8,073.49
ING Direct Savings / Liquid Emergency Fund: $3000
PayPal: $70

Roth IRA: $14,482
Sharebuilder Stocks & ETFs: $9,801.43
Vanguard Index Fund: $4113.69
Vanguard 529 College Plan: $890.44
Lending Club: $555.95
Prosper: $233.10
HSA: $1000

Where on earth should I be putting my savings and how much should I really try to save each year?

Savings 2009 Update

Since I don’t have a 401k, I’m always paranoid about not having enough saved for retirement. I know they advise workers to put at least the % match in their 401k above and beyond their Roth, but without a 401k, I’m still at a loss for where to save my money. Also, with grad school in the future (2-5 years away) I don’t know how much to save for retirement vs. that. Oy.

To be honest, beyond my Roth IRA, which I max out at $5000 each year, I don’t keep great track of what money goes into my other savings accounts. I save, I probably save quite a bit all things considered, but I haven’t really looked at what that means until today.

This year, so far, I’ve put $4850 in my Roth IRA. I have invested $5000 in ETFs and stock purchases in my Sharebuilder account. Plus, there’s about $600 in my 529 plan. Ok, so I think I stashed away $10k this year, or more. That’s not too bad. Then again, I know people who are saving 30% or more of their after-tax income. Which would be probably more like $20k.

Granted, I lie to my net worth spreadsheet and tell it to deduct more taxes then I will need to in order to have a fiscal boost come April 15. But that usually goes straight to next year’s Roth IRA. I always like to start it out with a $3000 one-time investment in April, then add in for the rest of the year until I hit the $5000.

I really wish I could buy a house right now, but besides not having the money to do that (I only have $30k saved, and much of it is in retirement accounts) it just wouldn’t make sense. So I’ll keep throwing away $600/month on rent. I was at my friend’s house yesterday — the one she bought with her engineer fiancee — and I’ll admit, I’m a bit jealous. But then I remember I don’t NEED a house right now. What would I do with a giant house besides pay a lot in bills and make a mess of it?

4 in 10 Americans Don’t Know When They’ll Retire

With a mix of a morbid stock market and American’s not understanding just how much money is needed for retirement, the country is filled with people who may never get to enjoy a retirement.

A study that came out today from ING Direct reports that 40% of Americans expect to retire much later on or not at all. Americans will be chained to their jobs longer than ever before just to keep up with their bills and ensure food is on the kitchen table. The survey results also noted that over 60 percent of Americans are significantly more concerned about saving enough money for retirement and having the right type of retirement plan than they were six months ago.

Some other interesting stats from the survey:

· Nearly half of all Americans (47 percent) have “no clue” how much money they need to retire;

· Despite nearly two years of economic turmoil, 65 percent of Americans have not adjusted their retirement investments;

· One in five Americans (19 percent) are still banking on Social Security to be their main source of retirement income; and

· One-fifth (21 percent) of Americans are contributing less to retirement than they were last year

This is pretty scary stuff. The only thing that I go on is that retirement is maybe not a necessity. Well, at some point when I can no longer move or think I’ll want to retire, but I hope I’m well into my 80s at that point. I enjoy working, and can’t imagine enjoying retirement. I’d be bored silly. Maybe my mind will change by then, but still — my biggest fear is not having enough money to take longer vacations and travel in between being professionally productive. I’m definitely not banking on social security to be my main source of retirement income.

The national online survey of 1,223 adults was conducted by Harris Interactive on behalf of ING DIRECT between February 18-19, 2009.