Saving Money for Retirement

amother

Jean

Fri, Mar 24 2023, 3:41 pm

I only started 2 years ago because my employer offers it and matches 50% . DH did the same when his employer offered a 401k option. Wish I started sooner. I’m in my 40s.

amother

Firethorn

Fri, Mar 24 2023, 4:02 pm

I put the max amount that my employer will match each paycheck in my 401k. In my low twenties.

We’re in debt but I’m still contributing because I’d lose all the employer match money and I get more from that than from paying down debt.

amother

Sage

Fri, Mar 24 2023, 4:05 pm

We started very very late. It almost feels stupid but we opened Roth IRAs 2 years ago. One in my name, one in my husbands. Maybe we'll have enough money for a few months of expenses.
I was young dumb and thought this was something other people do. I had never heard frum people talk about retirement. My frum employers never offered a 401k. Then I realized it's actually a thing and it took a few years to convince my husband when we were already so tight financially.
Anyway Hashem will help.

amother

Banana

Fri, Mar 24 2023, 4:15 pm

amother Sage wrote:

Yup, my parents have millions in their 401ks, we have zero retirement funds… I am self employed, my husband is in real estate… wish it was more common in frum companies

amother

Lightblue

Fri, Mar 24 2023, 4:17 pm

I have some from an employee matching program in a job I worked in before getting married. My husband's job gifts into 1 of them as a bonus and matches the other, so we have both, but when things are tight we do take out (with penalty) to get us through

amother

Cherry

Fri, Mar 24 2023, 5:06 pm

You need some other options (or an option for Other).

I will Iy”H have a defined benefit, government pension, and I still contribute the max to a TDA (tax deferred annuity). DH contributes to an IRA.

justforfun87

Fri, Mar 24 2023, 6:42 pm

You should bare MINIMUM putting in what your employer agrees to match. It is literally free money. In the secular world they say 20% at least should go towards retirement but in the frum world that is hard to do.

amother

Junglegreen

Fri, Mar 24 2023, 6:52 pm

justforfun87 wrote:

It’s not literally free money if you can’t even pinch $20 off your paycheck.

amother

Cherry

Sun, Mar 26 2023, 12:45 am

amother Junglegreen wrote:

It’s not literally free money if you can’t even pinch $20 off your paycheck.

You’d be surprised. Less comes off in taxes, which partially offsets the pension contribution, and you feel it less when it comes off the top of the check (so you never see it).

Thanks to magic of compounding interest - even $10 or $20 per paycheck can turn into a substantial amount of money, if you start early, so it’s definitely worth investing as much as possible towards retirement when the money has a lot of time to grow.

amother

Bone

Sun, Mar 26 2023, 12:45 am

Neither dh nor myself have any benefits from our jobs. We have one IRA account that we contribute the max amount yearly to. I doubt that is going to be enough for retirement, and it really worries me, especially because we don't own a home and will probably never afford buying.

amother

Strawberry

Sun, Mar 26 2023, 1:07 am

amother Cherry wrote:

Well the stock market this past year wiped out the past several years for us so I really don't know anymore. And our investments were not risky by any means, just the recommended mix of conservative and risky for our age.

Chayalle

Sun, Mar 26 2023, 8:33 am

I've been putting a percent of my salary to retirement since I started working, at the ripe old age of 20. This includes a company pension fund, plus a matched 401K. I'm surprised that anyone who has this option wouldn't take advantage of it. And trust me there were times I didn't have much....I simply never viewed that as money available to me - I just don't think about it. BEH one day, I don't want my kids to have to support me....

amother

Firethorn

Sun, Mar 26 2023, 9:08 am

amother Strawberry wrote:

The stock market tanked for everyone last year. It was awful and so disheartening.

You’re not supposed to look at your 401k often unless you’re close to retirement and pulling money out. The compound interest kicks in after a decade or two in massively increasing your money.

amother

Jasmine

Sun, Mar 26 2023, 9:11 am

amother Banana wrote:

Yup, my parents have millions in their 401ks, we have zero retirement funds… I am self employed, my husband is in real estate… wish it was more common in frum companies

My husband is self employed and put the max in Roth IRAs for me and him. It’s tax free

Amarante

Sun, Mar 26 2023, 10:00 am

Keep in mind that you need to opt for either the traditional IRA or the Roth.

A traditional IRA allows you to deduct the amount you put into the IRA so that you lower your taxable income. However it is taxable when you withdraw in retirement.

With a Roth IRA, you pay taxes on the amount put into the Roth IRA but you DON'T pay taxes when you withdraw so it is better for people with lower current incomes who anticipate higher incomes in retirement.

ETA - 401 (k) is a different than an IRA with its own regulations. Money you put into the account is not taxed in that year nor is the amount matched by your employer. So literally you are throwing away money that is free since this benefit is part of your total compensation package.

It may not be wise to put more than matched funds in the 401 because you don't have as much control over how they are invested as you do for your own IRA account which can be invested in almost anything.

Last edited by Amarante on Sun, Mar 26 2023, 10:45 am; edited 1 time in total

amother

Scarlet

Sun, Mar 26 2023, 10:08 am

amother Strawberry wrote:

Sadly, more people will have their investments wiped out too. All the recommended steps of traditional savings aren't safe including retirement accounts.