Am I on track?

[ChrisG88]

Hi there,

I'm looking for reassurance or tips on my retirement planning. I stress about it constantly. I am terrified of having no money in my old age. I'm currently 31 years old. I have a 401k balance of $90,500. I contribute 12% of my salary and have a 6% employer match on top of that and a 3% employer contribution (so a total of 9% from employer). Annually I make around $80,000 pretax and and I expect that to jump to around $95,000-100,000 in the next 4-5 years. Yet when I do the math using planning calculators I feel like I'm going to be short on money if I live past the age of 90. Am I way off balance here? Other articles I read suggest I should already have 100-150k saved which puts me into a panic.

Thanks for any insight!

 

[DHK]

I think you should talk directly to an agent or advisor in your area.

@scagnt83 is a quality poster and is also in South Carolina. I'd talk with him.

 

[Rob Lion]

Live your life for now you may not even make it to retirement lol.

 

[scagnt83]

Hi there,

I'm looking for reassurance or tips on my retirement planning. I stress about it constantly. I am terrified of having no money in my old age. I'm currently 31 years old. I have a 401k balance of $90,500. I contribute 12% of my salary and have a 6% employer match on top of that and a 3% employer contribution (so a total of 9% from employer). Annually I make around $80,000 pretax and and I expect that to jump to around $95,000-100,000 in the next 4-5 years. Yet when I do the math using planning calculators I feel like I'm going to be short on money if I live past the age of 90. Am I way off balance here? Other articles I read suggest I should already have 100-150k saved which puts me into a panic.

Thanks for any insight!

Dont panic. You are way ahead of most people your age. And you contribute a much higher percentage than most people.

Did the planning calculators take into account an increase in salary over the years? And not just the expected jump to $100k in 4 years, but the future increases you will have. At your age, you are most likely earning a lot less than you will be 10-20 years from now. Statistically, you will earn close to twice what you are making now in the 10 years before retirement (assuming you are a college educated white collar professional).

Remember, you can always put some money into an IRA or ROTH IRA in addition to your 401k. I would suggest the ROTH.

Also check to see if your 401k offers a ROTH option. If available, I would suggest splitting your contributions 50/50 into pre-tax/ROTH. If its not available, DEFINITELY start a ROTH IRA and put at least a few thousand into it per year.

As a general rule, you will be able to take 4% of your balance per year as retirement income. Some advisors say 3%-5% range.

You can use annuities in retirement (something to look at in the future, not now) and create a higher income on a percentage basis vs. the "general" 4% rule of account balance. Often they can be more in the range of 5%-7%.

Long story short, just keep doing what your doing. Highly consider ROTH options. And make sure you have solid life and disability insurance (not just through your job, but individual policies that you own no matter what your employment situation is).