I am 39 and have No money in my 401k -Help


Confused about dryer sheets
Jan 6, 2005
I lost the plot guys and have partied all my life. I am in medical sales and spent every dime I have ever made.

I always thought I would die early, and never cared until now.

My question is at 39, and making around 60 to 70 per year.

How do I catch up so I am not a bumb when I retire.

you can laugh at me but no cheap shots ok? I need sound advice.
Hi Stkilda,

Many people don't start thinking about retirement seriously till your age. I think there are others on this board who will tell you similar stories.

The first and most important thing you have to do to plan for retirement is to live below your means (LBYM). If you get that right, you are likely to find an investment strategy that will get you to retirement. If you don't get that right, no amount of advice can help -- winning the lottery might help, but none of us can help you find a way to do that.

Once you become serious about LBYM, you will have money to save and invest. There is a lot of general advice about what to do with that money. Most people suggest that the first thing you do is establish an emergency account so that you can take care of unexpected expenses. Then begin investing. You'll find that there are many different viewpoints about this: Invest in index mutual funds. Invest in individual stocks. Invest in a balance of stocks and bonds. Invest in real estate. Invest in bonds only. Invest regularly. Save your money on the sidelines till you find a good buy . . . Although the various bits of investing advice is contradictory, most of these strategies will work to help you accumulate the money you'll need to retire. The main thing is that you need to feel comfortable with your investments -- that you understand them at some level and you aren't just buying them because somebody told you to.

There are a number of tools available to help you calculate your future retirement needs. FIRECALC is a historical simulator that can be accessed from this home page.

Get started saving (ie. not spending everything), and ask questions when you start thinking about investments, etc.

Good luck. :)
Actually, you do have enough time to build a retirement yet. But you will have to max out your 401k and Roth plans, and start putting aside some post tax dollars in a retirement savings as well. A guesstimate is that you will have to start saving $15 to 20 thousand a year until you are 60. It all depends on how much you spend in retirement.

I started saving just a few years earlier than you and I am on track to a nice retirement at 57.

I wrote some ideas about how to budget and how to look at saving for retirement here:


Basically you have to learn to live well with little money and sock away the extra money.

You are still young enough to do it!
I lost the plot guys and have partied all my life. I am in medical sales and spent every dime I have ever made.

I always thought I would die early, and never cared until now.

My question is at 39, and making around 60 to 70 per year.

How do I catch up so I am not a bumb when I retire.

you can laugh at me but no cheap shots ok? I need sound advice.
This isn't meant to be a cheap shot, but unless you can commit to changing your financial life forever, you won't succeed in retiring early if ever.

Unless you have really seen the light and are willing to do a complete about face, your post above is as close to FIRE as you will ever get.

If you are thinking about starting a plan tomorrow or next week or next month, it won't happen. You have to start TODAY. And, it has to be a plan that is realistic and you must put it in writing and look at it every day.

You and others like you have thousands of posts to read in this forum to keep you busy and motivated for a long time, so that would be the first step I would recommend for you.

If you make that commitment to yourself, there will be plenty of people here to help you. May the force be with you ;)
Very good post by retire@40. A long term commitment is absolutely necessary. And before you know it, it all becomes second nature. I started planning at 38 and was pretty close to zero then - retired at 51. Once I started, the charge I got from seeing my net worth climb was better than spending money on stuff. My wife felt likewise. All-in-all it was a cakewalk for us. Smaller house than our peers, smaller cars, stop buying crap that turns to junk anyway, use retirement plans... Nothing very complicated or difficult - just do it.
I too got a "a charge from watching my net worth climb"
once I started paying attention. Re. backing off and becoming a "non-Jones" consumption-wise, here are
some concrete examples from my high consumption life vs. my current situation:

Before 2 Cadillacs
After 14 year old Jeep, 7 year old pick up

Before 2400 SF house
After 1100 SF cottage

Before Expensive wardrobe
After Don't own a suit, maybe 2 dress shirts

Before Routinely bought new stuff (appliances etc)
After Almost all furniture/appliances bought used

Before Lots of jewelry/artwork
After Most sold. Only wear wedding ring and a watch.

Before New 19 ft. Bayliner plus a small used jon boat
After Bayliner sold. Still have jon boat.

Before We had 6 TVs in the house.
After Down to 3. Total invested $65.00

Sometimes I do ignore the budget and buy something just because I want it, but not often.
Since I retired completely in 1998, I splurged on
a new motorcycle. Otherwise, the only major cost
items went into the house. I do find
I am more willing to spend now. My net worth is up,
I am closer to SS, and being older am more aware of the "can't take it with you" concept. I agree with
Cut-Throat..... it has little appeal to find yourself 95 years old and only be able to say, "Gee, my SWR worked out
real well!" :)

Buy a paperback copy of Your Money or Your Life and read it.

Buy the Vanguard Target Retirement Series closest to when you want to retire or it's equivalent in any tax deferred options you have available - 401k, Roth, IRA.

Exercise 'cheap SOB' to the extent it's fun.
I am in medical sales and spent every dime I have ever made.
My question is at 39, and making around 60 to 70 per year.

How do I catch up so I am not a bumb when I retire.

Welcome Stkilda!

First of all, don't be ashamed for your past errors. :) You'd be surprised how many people are almost twice your age and have virtually zero savings/pension and depend almost entirely on SS. The great thing is that you woke up at age 39, not 59 or 69.

Second, assess your current options for various savings plans. You mention you are in medical sales...I'm not too familiar with different formats of medical sales positions (i.e. if the IRS considers you an "independent contractor", if you are on the payroll of a pharmaceutical company, etc.), so my first bit of advice is to clarify/find out what your tax situation is.

Next, make a list of those options you have to save for retirement, including 401 (K)s, SEP IRAs, ROTH IRAs, Traditional IRAs, etc. Some of these are not available, depending on what your status is. The friendly folk at ERF can be glad to point you in the right direction with a little bit more background info...but as with all things, we recommend you consult a tax professional for your final plans.

As mentioned by others, make a list of your monthly expenses. Figure out what are true "needs" versus "wants", and find out if you really can't live without those miscellaneous expenditures that really add up quick.

Finally, to determine just what you do need to retire, ask yourself this question: what do you want to do with your life when you are Financially Independent? What age do you want that to be? (i.e. when you can either stop working altogether because you don't need the income, or you can take any job you want that you would love to do because your investments supplement your income enough to make up any shortfall). If you want to take around-the-world cruises every year in retirement, it will cost loads more than living in beautiful rural Illinois on a scenic river with a $25k annual budget.

This will determine just what you need to save to reach your goals. If you find out that you'll be needing $150k/year for retirement, the math may indicate that you will have to work until you drop dead to pay for it....so that gives you a heads up that you either have to adjust your expectations/plans or save like hell to reach those goals.
I was fortunate enough to have realized the importance of saving about 5 years ago. I am also 39 but have accumulated approximately $100,000 in stocks and mutual funds by maximing my contributions to 401k and IRA. I save with passion and have established a monthly target for next 50 years. It is nice to know that I have a plan and am making a steady progress towards achieving my financial objectives.
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