Hi! I'm new to the early retirement world. I have been saving as much as I could but always just assumed if I saved more than recommended things would work out.
I work in financial services so my 401k is operated by the company I work for. When I log in to my 401k it has all sorts of graphs and estimates that point my way to having at least 80% of my current income available every month after I retire.
This has me thinking, do I really need 80% of my current gross? I have been putting 6% into my 401k and 14% into a Roth 401k for a few years now (since I realized I could escape early). A few months ago I changed it to 10% in my 401k, 9% into the Roth 401k, and maxing out a Roth IRA. I get a 6% company match on the regular 401k along with an annual 0-3% profit sharing contribution that is almost always 1%.
Just through my employer I already have 26% going towards retirement and my Roth IRA on top of that. I know the employer match shouldn't be counted as a gross income reduction for me but why would I need 80% of my current income when I retire when my real life current available gross income is already less than 80% of my full gross? When I retire I likely wont still be contributing to any retirement accounts so I don't see how this 80% estimate they are giving me could be accurate.
Is there a better way to find out a % that I could use. Who knows how taxes will work out for me but I just cant wrap my mind around how my income in retirement would need to be that high when it doesn't need to be that high right now. I am 31 and I am pushing to retire in my mid 50's but earlier would be great. I have 76,963.16 in the 401ks combined and 7,676.36 in the IRA. My wife and I will be starting a normal investment account near the end of the summer. The wife has a defined benefit plan that is similar to a pension and she also maxes out an IRA.
I have looked at firecalc but I am probably too far away from retirement for that to give me any clear idea of what I need
I should say my employer just recently sent out an article praising active investing, that they happen to offer. Seems like a sales pitch... The info they are giving me could just be a way to get people to give more.
Any advice would be appreciated! thanks
I work in financial services so my 401k is operated by the company I work for. When I log in to my 401k it has all sorts of graphs and estimates that point my way to having at least 80% of my current income available every month after I retire.
This has me thinking, do I really need 80% of my current gross? I have been putting 6% into my 401k and 14% into a Roth 401k for a few years now (since I realized I could escape early). A few months ago I changed it to 10% in my 401k, 9% into the Roth 401k, and maxing out a Roth IRA. I get a 6% company match on the regular 401k along with an annual 0-3% profit sharing contribution that is almost always 1%.
Just through my employer I already have 26% going towards retirement and my Roth IRA on top of that. I know the employer match shouldn't be counted as a gross income reduction for me but why would I need 80% of my current income when I retire when my real life current available gross income is already less than 80% of my full gross? When I retire I likely wont still be contributing to any retirement accounts so I don't see how this 80% estimate they are giving me could be accurate.
Is there a better way to find out a % that I could use. Who knows how taxes will work out for me but I just cant wrap my mind around how my income in retirement would need to be that high when it doesn't need to be that high right now. I am 31 and I am pushing to retire in my mid 50's but earlier would be great. I have 76,963.16 in the 401ks combined and 7,676.36 in the IRA. My wife and I will be starting a normal investment account near the end of the summer. The wife has a defined benefit plan that is similar to a pension and she also maxes out an IRA.
I have looked at firecalc but I am probably too far away from retirement for that to give me any clear idea of what I need
I should say my employer just recently sent out an article praising active investing, that they happen to offer. Seems like a sales pitch... The info they are giving me could just be a way to get people to give more.
Any advice would be appreciated! thanks