[Money Talk] How much are you contributing for retirement?

Yeah, but it depends on what the market will do, and how close you are to retirement. If you are far away from retirement low stock values are generally seen as a bonus. That way you are purchasing more shares, which is what you want. The more shares you have now, the more it will pay you when the economy is back up.

If you are close to retirement then you need to be concerned about the market going down and you losing value on your retirement.

There are other concerns such as what risk level you've invested at. But low value on your stocks isn't always bad if you are far away from retirement. You may want to put a little more in if the stocks are cheap.

 

hey man...u should do some research on basic overbought/oversold market analysis and market seasonality (YOUTUBE and find video with good ratings)......i move my funds from Fixed income to small/mid cap funds for my 401K retirement for the past 8 or so yrs i been working.....Yes they may charge a fee, but its better to get charged a small fee then suffer from losses....

Personally, i dont believe in mutual funds bc there are hidden fees.....if u have 401K, then u are stuck with mutual funds and to probably 10-12 products the brokers are offering.....if u have IRAs, then i would stay away from mutual funds....However, investing in certain ETFs and index funds such as SPY, NDX, QQQ, etc is the same thing without the fees......

I trade a lot so i understand those movements, but u will be surprise how much a lil researching can help u.....

FYI: Market correction coming beginning of 2012....move your portifilio to fix...comeback into the small/mid cap funds around march to take advantage of the market on sale......

 

I just started putting in 9%, and my employer matches 7%, which is the most they will match. I'm 27 and trying to focus on paying off my loans from law school, which I still owe about $61,000 on.

I'm also trying to save a little cash every month in order to build up an emergency fund. I've been working for a little less than a year and have between $5,000 and $6,000 saved up. When I get about $10,000 saved up (hopefully no emergencies come along), I plan to start paying more on my student loans and investing more.

 

It's a no-brainer to put in as much as your company matches, and to participate in discount stock purchases. It's also probably smart to take your profit and sell the company stock as soon as possible - don't be the ENRON guys who had all their retirement in their own company.

What is up for consideration is how far to go after that.

If you have problems saving and investing money, you need to max out the $16.5 K limit and your $5K Roth IRA limit.

If you don't - stop and think about it. I've seen pretty much zero growth on my Roth accounts and 401k for the last 8 years. That tax-free growth isn't doing anything for me, is it?

So we broke out one Roth IRA and are going to invest it in rental property. For me, the returns are higher - and they aren't subject to the current insane market or potential rule changes about Roth IRAs.

10% return - tax is better than 0-1% tax free growth.

 

I think that's great you're thinking of other ways to invest your money but...

You took a 10% hit when you took out your Roth IRA. So your 10% return on the property is already 0%. You would have to get a bigger return for it to be better.
Also, you can't guarantee 10% return on the property just like you can't guarantee a return on the stocks. It could be 10% (like stocks traditionally have been) or it could be 0% (like your IRA has been for the past few years). All it takes is your property to be empty for a couple of months and your profits are wiped out (any appreciation notwithstanding).

 

Roth contributions are considered first withdrawn and are tax and penalty free.

 

Ah, that's right. Only earnings get taxed.

 

Per wiki:

Direct contributions to a Roth IRA may be withdrawn tax free at any time.[1] Rollover, converted (before age 59½) contributions held in a Roth IRA may be withdrawn tax and penalty free after the "seasoning" period (currently 5 years). Earnings may be withdrawn tax and penalty free after the seasoning period if the condition of age 59½ (or other qualifying condition) is also met. This differs from a traditional IRA where all withdrawals are taxed as Ordinary Income, and a penalty applies for withdrawals before age 59½.

Which is why Roth is better.