Retirement to speak of?

[WolfpackWife]

I barely know what a 401K is, but I know most of my friends have already started on and regularly contribute to their retirement. That's not so much an option for us. When we worked for the public NC hospital, as employees each month we had a minimum amount put into a state retirement account and the university matched it. It wasn't much, but we didn't have to think about it. Of course, when this whole journey/circus started, we both cashed it out as we needed the money way more know than in 40 years. Plus, it wasn't much. About $3500 between the two of us.

Clearly, DH makes nothing. I work, again, for the state by working for the University/SOM, so an automatic amount of retirement is again put into the VA Retirement System for me. Frankly, we don't think about trying to allot more to it each month. We don't really have the ability to. And as soon as we move (or I guess, IF we move for residency), we'll probably be cashing that out too.

Is it normal to not have much retirement/savings to speak of at this juncture? Is it just a huge game of catch up once you're a dual-income (or at least a sizeable single income) family?

[SuzySunshine]

I think its normal on the path that most of us are on but I don't think its normal for people of our age. I started putting money into a 401k as soon as I graduated college - enough to get the employer match but not enough to max out my annual. By the time I was done working it was about $40K and its still there and growing.

We are 36 years old and we are maxing out DH's 403, 457 and an IRA for each of us. We are also maxing out the kids 529's. We'll always be behind because 13 years of compound interest makes a difference but we are trying to catch up as quickly as possible.

[spotty_dog]

I was putting something like 5 or 6% of my salary into a 403b while DH was in medical school. He was much more financially literate than me, and he insisted that I do this, to get the match for up to 3% and then a little more. It wasn't easy to make room in the budget, but the nice thing about payroll withholding is that you don't spend what you don't have, and man those early years of compounding are hard to live without. Plus if there is a match offered, you are basically throwing away free money not to take advantage of it. In the four years I worked for the university where DH went to med school, making about $25-30,000 and supporting us both (no med school loans for living expenses or any other significant support) I contributed $6,000 and my employer contributed $1800 (roughly). That account (which I completely ignored during the crash of 2008-2009, somewhat to my detriment) is now worth $12,500.

DH also put $500 per year in an IRA during those years, even though he wasn't working. Once he was moonlighting in residency, he formed an LLC for his moonlighting business and put most of those earnings in a solo 401(k) and a Roth IRA.

Every little bit counts, and it counts SO much more when you're young.

And as soon as we move (or I guess, IF we move for residency), we'll probably be cashing that out too.

This is NUTS. Absolutely INSANE. Do NOT touch your retirement savings unless it is the difference between eating and not eating. Holy cow.

[TulipsAndSunscreen]

I contributed up to the max the first 3 years I worked. I made great money and didn't have anything to spend it on (I lived in a city and I don't like going out so I spent money on running shoes and books). In med school (after those first 3 years), I contributed up to my employer match (6% to get 3%) and now I don't contribute anything. DH contributes a small amount to his because we're trying to catch him up. Honestly, every little bit helps if you read all those books that say you end up with more if you save in your 20s and never again...it's depressing to not be able to do more but I think doing anything is helpful.

And do NOT cash out your retirement. Ever. As DD said, unless it's literally the difference between eating and not eating. You don't get what's in there, you get what's in there minus taxes and penalties. It's not worth it.

[SoonerTexan]

My employer matches 4%, immediately vested. It seems silly to pass on free money, so I'm essentially saving 8% of my salary per year. Like others said, when you don't see it, you don't miss it. I think I'm somewhere around 20K now, though an increase in stock price has accounted for some of that. We don't plan to touch it unless it is a life/death sort of situation. I'm hoping it will make of for DH not putting away anything until he is in his 30s. I don't even think about it...I just click on the link to see how much is in there when the email update comes through every quarter

That being said:

I have no idea what it is invested in--I just went with the default portfolio and I probably should really look at that

Our savings accounts are abysmal right now.

ETA: I gave a lecture on this to a new hire a few months ago. She didn't know if she really wanted to save 4%. I was like dude, "FREE MONEY." Given that she lives at home and will until she gets married (Indian), I cant imagine what the hell she would need to spend it on besides education loans?

[WolfpackWife]

My employer matches 4%, immediately vested. It seems silly to pass on free money, so I'm essentially saving 8% of my salary per year. Like others said, when you don't see it, you don't miss it. I think I'm somewhere around 20K now, though an increase in stock price has accounted for some of that. We don't plan to touch it unless it is a life/death sort of situation. I'm hoping it will make of for DH not putting away anything until he is in his 30s. I don't even think about it...I just click on the link to see how much is in there when the email update comes through every quarter

That being said:

I have no idea what it is invested in--I just went with the default portfolio and I probably should really look at that

Our savings accounts are abysmal right now.

I am definitely appreciative of the employer match. I contribute the mid-range amount from each paycheck (they default you at a certain percentage, but you have to contribute at least $10/pay period), so I think my contribution is somewhere around $150/paycheck ($300/month), and they match that at a different percentage and end up contributing more than that each month. I just went ahead with the default amount, I didn't opt to contribute more or less. We just don't have much more than that retirement account going on - our savings account is also abysmal and we usually let it remain as such. Even though we don't have much to put into it, we don't take anything out of it so...it sort of just hangs out.

[WolfpackWife]

This is NUTS. Absolutely INSANE. Do NOT touch your retirement savings unless it is the difference between eating and not eating. Holy cow.

Yikes! Okay! Just to prove that I'm not a complete fiscal moron, by the time we moved I only cashed out around ~7 months worth of retirement, as I'd only been there that long. It was a meager amount, less than $1K (my portion, at least) and frankly, I didn't really know what else to do.

[oceanchild]

I'm on my 4th job since college. The first didn't pay anything to speak of, but for the next three I've done my best with the employer plans. When I was a federal employee, I didn't take the entire employer match, which I reallyreallyreally regret (had to do with vesting and my certainty about how long I would work there, which turned out to be incorrect). As a city employee I was enrolled in a defined benefit plan. When I left each of those jobs, I was able to roll the money in my plans into a Roth IRA, which is a nice way to get around the contribution limits on Roth IRAs.

Speaking of, DH and I both have Roth IRAs, and we've been maxing out our contributions each year since DH started residency. Roths have a lot of benefits, and there are max income levels at which you are allowed to contribute to them, so it makes sense to take advantage of them now. And the max contributions are only around $5000 a year each, which feels like a reasonable amount for us to set aside.

In my current job, I was eligible for a defined contribution (like 401k) or defined benefit plan, and I just this week made the decision to switch over to the defined benefit. I don't expect I'll ever get enough out of it to live on, but I did the math, and assuming I don't die young or they don't totally decimate the plan (both of which are definitely possible, I realize), the defined benefit is worth more in the long run. I dabble in state pension plan research for my work, and as a result I'm pretty confident that those of us with access to these plans have a good thing going that almost certainly won't be around forever. So I intend to take it while I can.

DH is obviously behind and will be for a while. We intend to spend some quality time with a financial planner once he has The Job lined up and figure out what to do about it. It's definitely a downside to the medical training system.

Anyway, I recommend getting a Roth IRA, using your employer plans, and rolling your old employer plans into the Roth if you don't want to maintain them separately.

[spotty_dog]

Yikes! Okay! Just to prove that I'm not a complete fiscal moron, by the time we moved I only cashed out around ~7 months worth of retirement, as I'd only been there that long. It was a meager amount, less than $1K (my portion, at least) and frankly, I didn't really know what else to do.

Sorry, I think I'm projecting my frustration with my baby brother, who cashed out his (probably somewhat significant) retirement when he went through a spat of unemployment a couple years ago...I wish he had asked us for a loan instead, ANYTHING but destroying all of that advantage of early savings! And paying the government extra for the privilege!

[ladymoreta]

We're playing catch-up. When I was working, I contributed a little bit to various 401ks, but I wasn't at a job long enough to have any vested amount of employer contributions. We're also paying down loans, so we're still not accumulating retirement funds as quickly as we'd like to. It sucks, but you'll make it. Put back what you can now, but start talking to your DH about making career decisions that will lead you to retirement. We've doubled our retirement savings this year (not hard to do since it was such a small amount, but still!)

[WolfpackWife]

Sorry, I think I'm projecting my frustration with my baby brother, who cashed out his (probably somewhat significant) retirement when he went through a spat of unemployment a couple years ago...I wish he had asked us for a loan instead, ANYTHING but destroying all of that advantage of early savings! And paying the government extra for the privilege!

I understand. Though, I am aware of the penalties and I probably spoke before I considered what we'd ACTUALLY do. DH's parent's have experience with this (in a negative way) so he's careful and wary and I don't think we'd be as quick to fill out that withdrawal paperwork after leaving here as we were when we left the NC system. But, I'll have a worthwhile number of years accrued here before we leave so, that also makes a difference. It's good to keep in mind though - I do appreciate that reminder! DH had accrued a bit more since he was at the public hospital for quite a bit longer than I was, but my short time there didn't add up to much. Actually, even combined it wasn't a sizeable amount - a sign that the contributions there at that hosp. were definitely not as good as they are here!

[mommax3]

Just to make you feel better, wpw, I cashed out my investment in my Indiana Teacher's Pension (which was less than 3K after 5 years of employment) when my oldest was born and I decided to stay home. I wasn't vested in the plan yet, and I don't regret doing it. There was no 403b offered at that time. I could be contributing to one now, but nothing is matched, so we have focused our contributions towards DH's paycheck, which does match to a certain percent. We are in our forties and still feel way behind retirement-wise, but we're working with a financial planner and feel confident that we will be fine when the time comes.

[Alacrity]

Do whatever you can to put in the max. It's less than what you pay into social security. If you can do this, you can retire quite well at 64 and have enough that you can survive on dividends and never run out of money. Look at it this way. 15% for 40 years will net you enough to have an even higher of standard of life and not work for the next 40.

[v-girl]

I cashed out my profit sharing bit boy bit to float us when I first quit working. I wasn't about to pull the kids from Catholic school just because I wimped out and couldn't handle work and three kids. Without that money we wouldn't have been able to pay for car repairs or do anything extra.

[metroguy]

doctors in general are horrible financial planners. as for retirements, i found the best thing is to open up lots of different products - 401k, 403, 529, ira, roth ira and pension plan-- but it's a pain to manage all the different products. this way, one of them would bound to work. for me, before i had kids, i max out on the 401k, ira, roth ira and 529. some of products work out well--and others did not. i lost 1k in 529 for dw's school fund. ira/roth ira barely break even--after 8 yrs. 401k is up 9% annualized--so that was the big winner-- mostly because i keep on putting 12% per yr + company match 6% every yr. of course now i have kids/mortgage, i don't put anything into retirement funds-- it's not priority for me. kids needs/expenses come first before my retirement.