slazenger here

[slazenger]

Hi,

I've been lurking at the forums for a bit and decided I'd participate on occasion when time allows. I started saving since my mid 20s and am now well into the 30 something category. I have definitely come to discover that "work" is not nor never will be my passion, merely a means to an ends.

I'm making pretty good progress towards ER, but I don't go too crazy with it. I'm hoping to get out of the community here the support I need to stay on the right track and to not fall back into temptation of excessive consumerism.

I have already learned quite a bit just browsing the forums, but when time allows maybe I can occasionally contribute to it as well.

 

[samclem]

Howdy and welcome. Do you have an employer-sponsored plan, or are you on your own?

 

[slazenger]

Howdy and welcome. Do you have an employer-sponsored plan, or are you on your own?

Yes I do! I have a 401(K) equilivant, so I have the max $15,500/year available to invest in that, and Roths for my wife and I. So, I have $25,500/year total available to invest in tax-sheltered retirement accounts. I'm pulling it off, but it isn't easy for me! I like consuming too, so its a constant struggle.

 

[samclem]

You probably have already stumbled on this, but the things that helped us save were:
1) Autnmatic payroll deductions. If you never see it, you won't miss it. Works like a charm.
2) Increasing the payroll deductions every time I got a raise. IRC, we generally put about 40% of the "new money" directly into savings. Since yo're not used to having the money, you don't miss the part that is coming out. Use te same trick if you are paying off a loan (car loan, etc)--when the loan is payed off, dump most or all of the monthly payment amount into savings. (For a car loan, probably best to pt the $$ into savings for your next car and other normally anticipated expenses, then you can pa cash whent the time comes).
3) Recognize, in a tangible way, what today's sacrifices are buying you in the future. For example, the $25,500 you socked away this year will (at 8% rate) grow to approx $102000 by the time you are 65. At a 4% withdrawal rate, you can take out over $4000 every year forever based on this single year of sacrifice. If you keep putting the money away every year and/or your investments do better than 8% growth, soon you'll find that you might be able to hop out of the rat race considerably earlier than age 65.

Best wishes.