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March 28th, 2009 at 06:20 pm

As you can probably guess, retirement is a source of contention in the onion patch.

Mr H's approach is: he'll work until he can't work any more, then he'll live on savings, then the government will support him. (You'll notice that it's "he" and not "we", although I think the "we" is somewhat implied.)

This is not what I would want for my older age, but I'm willing to live with it - up to a point. In order to live on savings, we have to be saving now, and all the time until then. We've saved relatively little - we have the 401k that I contributed to during my corporate years. That is 10 (or is it 9? I may not have been able to contribute the first year, although I don't remember now) years out of a total of 28 years of my working life (starting the count at age 18). DH has no pensions or 401k's from any present or past employers from his 28 years of working life.

Now that the budget is balancing with regularity I'm turning my sights toward saving 15% of our income savings for retirement. Is this enough? Probably not, but we have to start some where.

It seems like an impossible goal, but then we've managed to keep the food budget at a limit that I never would have imagined a year ago, and it hasn't been that hard. And with the few changes I made over several months getting checkbook one to balance hasn't been that difficult either.

After a rather heated discussion last week I think I've finally convinced him that in order to live off savings we have to be saving now, that he must be involved in this, and that a graduated approach (first 1%, then 2% etc up to 15%)* is the most reasonable approach. Starting in April we will be saving 2% of our monthly income towards retirement/old age.

*I have been setting aside 15% of my tutoring money since I started tutoring in January - trying to move us in that direction.

8 Responses to “Retirement”

  1. asmom Says:

    Wow are you married to my husband? He's always wanting to borrow from his 401k for something or another so one day I finally asked him how he was planning to pay for his retirement and he said he wasn't planning to retire! I have finally given up on him and I am aggressively planning for myself. But he will be taken care of, they always are.

  2. Petunia Says:

    Yeah, "I'm not planning to retire" only works up to a point. People get sick or become incapacitated and go on to live many more years. What then? It's that period of time I'm most concerned about.

  3. Ima saver Says:

    I have always saved 10% but you have to play catch up. I think saving 15% is a good idea.

  4. Joan.of.the.Arch Says:

    Surely he'll be able to go along with the 1% plan.

  5. baselle Says:

    Good idea to go at it gradually, try to always move forward. Ten years ago I started at 50$/month, then switched to a percent, then 10%, then 12%, then 13%, then 15%, etc.

    Its a whole lot easier to work if your back is not against the wall all the time.

  6. fern Says:

  7. fern Says:

    well, ordinarily, ramping up gradually might work, but if you're in your 40s already without much saved, i would say try to accelerate that pretty quickly. 15% is a great start.

    You really can't determine how much to save on a monthly basis until you've figured out how much you want/need to save TOTAL.

    There are a bunch of retirement planning quesitonnaires online at all the major brokerages. You need to set the goal first, then backtrack to figure out how much you need to save annually. For instance, i've determined that to retire "early" at age 60, I'll need $1.2 million. I didn't just pull that figure out of the air, i have worked out the numbers countless times.

    I had a much lower income for many years, so am now on fast forward, saving 46% of my gross pay. I'm accelerating my savings, too, becus i have MS and while it's been largely benign for the past 23 years, i really can't count on that and i want to be as prepared as possible if, down the road, it makes working impossible. And with the stock market downturn, i'm trying to make up for my lossees. If the stock market comes back by the time i'm ready to retire in 11 years, that's great, but i'm not going to sit back and just hope that happens. I believe in creating my own destiny.

    Even if you're perfectly healthy, you really can't anticipate the future, so i would rather be over-prepared than under-prepared.

    I realize that saving 46% of your pay just isn't possible for many families, especially if you have kids, but i just wanted to give you an idea.... i live very frugally, but that's becus i'm disciplined and don't have to do battle with a spouse who's possibly less than on the same page.

  8. Petunia Says:

    Thanks Ima, Joan, baselle and fern!

    Fern: You know, I'm not entirely sure how much we have saved. I forgot to mention that we have a small mutual fund that we've been contributing a small amount to over the last few years. That, combined with the 401k is. . . I think more than the average worker in this country has saved. We're not in impossible shape. . . yet. . . but I don't want to wait another 20 years before we deal with this.

    You are right, we really do need a total. . . we've had a few conversations about this but they don't tend to lead to action, at least on the part of Mr. H. So we'll gradually but steadily work towards 15% and at some point in the next year I'll probably come up with a total. I am pretty sure we won't retire early though. Smile

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