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Hey Boomers have you saved an extra grand?
Old 03-10-2006, 12:36 PM   #1
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Hey Boomers have you saved an extra grand?

Only one in twenty of my fellow boomers evidently have taken advantage of the "catch up" opportunity to stash away an extra grand each year in a tax advantaged fund. I guess that I should not be surprised as they have not exactly done a steller job in long-term investing when given other opportunities in the past.

I guess that they are relying on those fat SS checks that are sure to be there in the future!

http://www.bankrate.com/brm/news/sav/20060310a1.asp

But research indicates that few people are taking advantage of the opportunity. A study of 2,000 401(k) plans, administered by mutual fund giant Vanguard, shows that only 13 percent of the eligible participants made catch-up contributions in 2004. A study by the Washington, D.C.-based Investment Company Institute, or ICI, focused on IRAs: While about 41 percent of American households own IRAs, just 6 percent made catch-up contributions in tax-year 2004, according to the report.

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Re: Hey Boomers have you saved an extra grand?
Old 03-10-2006, 12:41 PM   #2
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Re: Hey Boomers have you saved an extra grand?

I'm in the "highly compensated" range at work, I couldn't wait till I turned 50 to take advantage of that, it totally turned the tables on HC crap so now I can max out my 401k. I expect to be able to sock at least 20k this year.
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Re: Hey Boomers have you saved an extra grand?
Old 03-10-2006, 01:11 PM   #3
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Re: Hey Boomers have you saved an extra grand?

I've already put in my 20K and DW is putting her whole check in until she gets her 20K.

I wish we were as good at saving when we were younger, we'd be long retired.
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Re: Hey Boomers have you saved an extra grand?
Old 03-10-2006, 01:20 PM   #4
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Re: Hey Boomers have you saved an extra grand?

I'm going to bet a good deal of them are completely unaware of how much they can contribute. Few people have any idea at all about their plan options, limits and whatnot.
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Re: Hey Boomers have you saved an extra grand?
Old 03-10-2006, 01:44 PM   #5
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Re: Hey Boomers have you saved an extra grand?

What's really been frustrating is being able to put in the max but not being able to. I spout off about the 401k every employee meeting and it does no good. Sometimes I see a light bulb or two go on when I ask "Why would you turn down free money the company wants to give you?" (our match)...sometimes that will get one or two to join, mostly I get those blank stares.
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Re: Hey Boomers have you saved an extra grand?
Old 03-10-2006, 01:52 PM   #6
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Re: Hey Boomers have you saved an extra grand?

Can't do it yet.... not old enough.

But it is interesting that they say lower level income people might not want to do it because it will eat into their cash flow... well, why not convert some of you taxable savings into 401(k) savings? At least up to the income tax bracket!!
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Re: Hey Boomers have you saved an extra grand?
Old 03-10-2006, 02:41 PM   #7
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Re: Hey Boomers have you saved an extra grand?

I wish i could "afford" to max.* I'm at 17% on my TSP now, but they've since removed the limits on the percent, and I think its like 15,000 limit now.* *I'm over 4K shy of that limit from a yearly standpoint.

You guys say you wish you saved as much when you were younger, but when your in your 30s with kids and all this crap to pay for at this age slot, its really tough to actually pull it off (including maxing 2 roths).* * I'm getting close to doing it, but i'm at a level now where it really puts a strain on us.* Any more (saving) would be just downright painful for now.
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Re: Hey Boomers have you saved an extra grand?
Old 03-10-2006, 03:02 PM   #8
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Re: Hey Boomers have you saved an extra grand?

Besides the fact that hubby likes his part-time seasonal job he also works it in order for us to max out our Roths. I told him $10,000 is the limit this yr. After that he's all done dancing.
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Re: Hey Boomers have you saved an extra grand?
Old 03-10-2006, 03:11 PM   #9
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Re: Hey Boomers have you saved an extra grand?

I have DW maxed out on her 401k including catch up $$. She should be at the limit by year end. If now, we will use what we can from her bonus which is what we did last year. Mine is not maxed out but I am using the difference to pay down a loan. My 401k is more for the company match than anything. I feel it is more important to pay down debt that to save above the match in my 401k.

We retire next year so this will be the last full year of 401k for both of us. We will get about 1/2 year worth next year and depending on where we are with the loan etc. we may choose to max them out before we retire.

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Re: Hey Boomers have you saved an extra grand?
Old 03-10-2006, 03:40 PM   #10
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Re: Hey Boomers have you saved an extra grand?

Quote:
people might not want to do it because it will eat into their cash flow
Good point Texas, but all it takes is living below your means and having beans and rice once a week. It is all about delayed gratification and that appears to be the hardest hurdle for most young folks to get over.

Don't spend it now . Take the $1 and invest it so that you can have $20 when you are ready to retire. It will all get spent eventually. It's just that some will not get spent until later on when you need it more and have no way to earn more.
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Re: Hey Boomers have you saved an extra grand?
Old 03-10-2006, 04:07 PM   #11
 
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Re: Hey Boomers have you saved an extra grand?

I've always maxed out, except for a few years, when I didn't know about SEPP 72t, and I was worried that I wouldn't have enough to last until I was 59.5.
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Re: Hey Boomers have you saved an extra grand?
Old 03-10-2006, 07:17 PM   #12
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Re: Hey Boomers have you saved an extra grand?

Every year, I usually try send any bonus money I get into Roths for me and DW.

I'm sure there are plenty of people (sometimes her) who would say "How exciting!"

That's why I joined this forum.
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Re: Hey Boomers have you saved an extra grand?
Old 03-10-2006, 11:29 PM   #13
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Re: Hey Boomers have you saved an extra grand?

My (former) company wouldn't allow me to make a catch up contribution until the year I turned 54--they weren't set up for it.* It's possible that I was the only employee over 50 (software--sheesh!). Not sure how common that problem may be. Then I retired at 55 and didn't earn enough to make the catchup contribution, so I only made it once. (And they say that boomers are spoiled* : )
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Re: Hey Boomers have you saved an extra grand?
Old 03-11-2006, 06:35 AM   #14
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Re: Hey Boomers have you saved an extra grand?

Quote:
Originally Posted by Outtahere
What's really been frustrating is being able to put in the max but not being able to. I spout off about the 401k every employee meeting and it does no good. Sometimes I see a light bulb or two go on when I ask "Why would you turn down free money the company wants to give you?" (our match)...sometimes that will get one or two to join, mostly I get those blank stares.
We did a couple of things at work that increased employee participation. One was not to have a match but to have an employer contribution anyway. The other was to have employee training done by an outside person. Staff seemed much more receptive to training when not done by the boss. Success is when you overhear your file room people talking about investment choices.
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Re: Hey Boomers have you saved an extra grand?
Old 03-11-2006, 07:29 AM   #15
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Re: Hey Boomers have you saved an extra grand?

Martha, once a year we have someone come in , usually at our yearly company wide training, sometimes that works and sometimes the person they send talks over everyones heads.
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Re: Hey Boomers have you saved an extra grand?
Old 03-11-2006, 04:59 PM   #16
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Re: Hey Boomers have you saved an extra grand?

Hey Boomers have you saved an extra grand?

My husband and I are both maxed out plus catchup in retirement accounts and Roths. It really pinches the Whoppers out of our budget.
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