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Retirement
I apologize if this is somewhere else, I didn't scan super far down.
So, H and I will be at our e-fund goal next summer, with only 1 car payment, our mortgage and a very small student loan payment. All of those payments fit in our budget easily at this point. Once we are to that goal, I want to start putting more into retirement, along with still putting money into savings. H gets 3% matched from his company. I have a pension as I work for the state- they currently take out around 8% from my paycheck to stick into it. We both have a Roth IRA that currently we aren't putting anything in. (But like I said, we want to focus on some debt- paying off our motorcycle loan and our e-fund before focusing more on retirement.) We are 29 and 32. Is this the wise thing to do, to wait till next summer? How much should we put into retirement each once we are at that point? 10% each? 15, 25? More into his since they match?
Re: Retirement
To clarify: YH is putting in 3% and getting that matched, and you're saving 8%?
If that's the case, you should probably try to up that a bit now if possible, maybe to 8-10% for both of you. Then once your debts are paid, I'd try to go to 15%. Start using your Roths for anything beyond employer match - so H should be putting *only* 3% into his plan with his employer, then another 5-12% into his Roth.
"You know you're in love when you don't want to fall asleep because reality is finally better than your dreams." - Dr. SeussYes, sorry- my H is putting in 3% to get it matched. And I have no choice because they automatically take about 8% (I don't have my paystub on me so I'm not sure of it but it's about that).
So you think we should leave those as is, and then put the remainder to equal 10% right now into our Roths? Then eventually up that difference to 15% in our Roths?
yeah, that would be a good way to go. Try to make it to 15% total - so you would be adding 7% of your income to your Roth and 12% of his income to his, in addition to your employer plans. If you can do 15% now, go for it, but that's a big adjustment that you don't have to do all at once.
I misspoke in my original reply, too: I meant to say once you reach your e-fund goal to up to 15%, not to wait until you've paid your debts. Since you're making all your debt payments easily, you should be able to do that, I would think.
Edited for clarity
"You know you're in love when you don't want to fall asleep because reality is finally better than your dreams." - Dr. SeussYeah, once the one motorcycle loan is paid off and we hit our e-fund, all should be by next June, that's when I want to up the retirement even more. I'll shoot for 15% at that point. I'll take to my H now to see about putting a little bit more into our ROTHs for now, even if it's only $50 a month.
Edit for question: Wait- should it be 15% total of our combined income going into retirement, whether it's 401k, IRA, pension? You can tell this all confuses me and I'm slightly clueless..
We have all our finanical accounts as joint, so I view retirement the same way. We aim to keep it at least above 15% for total household income. Hopefully, that helps.
yes - you want to think of your retirement savings as one number, so 15% total should (eventually) be going to retirement. Break that 15% up as follows: 3% into your husband's employer plan +12% into his Roth (you could probably stick to 9% if you want, since the 3% with his employer is turning into 6%, really); then your 8% with your employer + 7% into your Roth.
You may have to adjust the Roth numbers depending on your income - $5500 is the maximum contribution this year. For instance, if 12% (or 9%) of his income is over $5500 but 7% of yours is well under, you may still be able to save the 15% total by putting some of his income into your Roth. If you're making more than around $110k combined, it gets even more complicated. I can explain how, if you'd like.
"You know you're in love when you don't want to fall asleep because reality is finally better than your dreams." - Dr. Seuss