Too many variables to answer the question from that perspective. The better question is how much per year would you plan to live on in retirement, then work backwards from there.
My favorite reason is that you can withdrawal your principal from a Roth at any time with no penalty once you have the account for five years. Another is that unless your tax rate is going to be lower in retirement, you save more on taxes with a Roth. If, on the other hand, you are in a higher tax bracket now than you expect to be in retirement, a traditional may be better.
I can't use the Vanguard Roth IRA since I make more than tthe limitation it has. What are my options?
Do you want to be rich or wealthy? It's tough to decide when you're 20. I turn 30 in 4 months and I choose to be rich until I was about 25. I put myself in debt to appear I had money with nice things and going out, which isn't too hard too hard. I'm not wealthy now by any means, but it took about 5 years to get out of debt and become smart with managing my money. If you want to be wealthy.... then take the advice of investing your money long term (20+ years).
63 years old if you put $5,000 a year and get a conservative rate of return of 8%. The future value of your money will be $2.4 million. Which will net you a healthy annual withdrawal rate of $96,000.
$5,000 a year on top of the $100k? The 96k, I could live on. It's less than my household makes now, but I could live on it. Here's my story - I'm 28. Wife is 27. We're committing the ultimate sin, in that we have money saved up, but its doing nothing but sitting in bank accounts. We should have seen a financial planner long ago. She's very conservative with money, whereas I'm much less, while still being smart. We both send like 5-6% of our yearly salary towards retirement, but we still manage to save probably 20% of our annual income each year. (The perks of being non-drinking homebodies, who bought a cheap house, and have no kids) We have very little debt, other than a mortgage. I love to educate myself on many things. The problem is, finances, to me, are about as dry as Death Valley. Her idea of finances are to squirrel away money for retirement, but without investing it into anything other than a savings account (because she doesn't trust other people). My idea is to listen and be open to anything. In my head, I kick around the idea of dropping a ton of money down on a much nicer country home where we can raise our unborn children, affording our current lifestyle of saving, and travel. I also kick around the possibility of taking that money, researching foreign vacation properties and trying to make money off short term vacation rentals (we love to travel, and go to the Caribbean once or twice a year). I obviously know that the safest thing to do with my money is to invest. I do realize, though, that any and all of these things would require extensive research, as I'm a researcher. I wouldn't make a decision like this easily. What's my ultimate goal in all this? To be financially independent of work, enough so, that by the age 40 or 45, I can travel freely, while making money. It'd also be ideal to have a place near my family in Texas, and a place near her family in the Northeast. Problem is, I just don't know where to start or how to become interested. I feel overwhelmed by it all. And yeah, I know, good luck to me.
I'd like to get some advice too. I have my 401k for my work but am sitting on too much money in my bank account.
Vanguard 500. Put as much as you can in it and don't think about it any further. Do not buy mutual funds, do not talk to a financial guy, don't mess around, just the 500 index. With WYNN I would buy a bear put spread.
Invest in yourself and education. A better-skilled/better-educated you is the best investment you can make in your 20's. At least that's what Warren Buffett says. And it's probably best to take the time to do that early in life when you may not have as many responsibilities around the home. Also, if you can, direct-debit from your paycheck or checking account straight into a savings of some sort on a regular basis, so you don't have to remember to do it on a regular basis. You don't need to be a financial wizard to retire early. You just need to quit worrying about what others have that you want, learn to curb your greed and need for luxuries, and learn to live without wasting money.
Also consider the dollar's buying power 40 years from now in your calculations. Numbers that look great in today's dollars may only be worth a fraction of what you'll need to retire comfortably decades from now.
Can you expand? I just started a roth IRA with target retirement 2055 few months ago but I cant put more money in that since I exceed their limits. What is the Vanguard 500? Can I open one considering I already have a Roth? Is it a one time thing where I put as much money as I can or is it one of those where you contribute as often as you want?
