I comfortably live on my salary with no issues. I easily put away 50% each paycheck (between savings and retirement). But my salary isn’t huge. Should I be digging deeper to find some less-easy money to amp up my retirement or savings account? I’m contributing to my 403(b) but not really my Roth IRA because I don’t know how to use my bank’s interface. Yes, lamest excuse ever.
Also: How does my spouse saving for retirement impact my savings? As in, is it okay to not save quite as much? I’m saving, but I’m not saving 15% of my income for retirement. [Ed: this means 50% of her income is going to general savings + retirement, but less than 15% is going to retirement]
And: I started saving at 30 for retirement. How much do I have to save?
It’s only been a little over a year since you asked this question, and it’s not like your family situation has changed at all, say, by having an adorable baby. (*Cough*)
If you’re really only living on 50% of your paycheck, then that means you’re doing fine for retirement. Saving 50% starting in your 20s (even late 20s) will allow you to have more money than you need later on, if you keep those living expenses low.
However, some of your living expenses are probably subsidized by your husband. So you’re probably not really living on just 50% of your income. You will need to figure out as a family unit what your joint savings and joint spending is and what it’s likely to be in retirement. What kind of retirement do you envision as a family? What risks are there in the future?
As a general heuristic, you want to save 10-15% of your (joint) income for retirement. If you didn’t start until you were 30, then you probably want to aim closer to 20% (or more). But again, this is going to depend on what your husband is doing. Even if you have separate finances in most areas, you will most likely be sharing living expenses now and in retirement, just assuming that you want to keep living with each other. (And in the unthinkable event of divorce, many states are community property meaning they cut your assets in half no matter how many assets there are.)
In terms of whether or not you should dig deeper… well, that depends a lot on what’s going on now and being able to predict the future. You do have a child now, and for the child’s sake, you want to make sure that he doesn’t have to support you during your golden years. At the same time, babies are a lot of work and you may have more time and more money to devote when the baby is school-age. A lot of things change over time.
As a side-note, when your salary is *truly* small, because you’re one of the “47%,” Social Security will replace a large percentage of your income. And, correlation-wise, you’ll die younger. But that’s not really your situation.
Yes, not wanting to figure out your bank’s IRA thing is lame. Don’t use your bank for the Roth IRA (unless the only way you are going to do an IRA is through the bank, but that would only be the case if the bank was super easy to use, satisficing is always better than doing nothing). Give Vanguard a call and they’ll help you figure out what to do, assuming you have enough money to put away in a Roth IRA. Stick it either in an S&P 500 index fund or in their Target-Date retirement fund.
So, um, take that advice for what it’s worth given your changed circumstances from when you asked it. We can elaborate in the comments!
Grumpy Nation, anything to add?