I've heard you need to invest at least 10% annually for retirement. Do you think this includes all investments such as real estate, or is it just IRA and 401k type things? I don't put a whole lot towards my IRA these days because I'm allocating a big part towards a commercial lot and a future building.

All invetments, but not your home. I know you didn't say this. Stating it for others.

queso1 said:

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I've heard you need to invest at least 10% annually for retirement. Do you think this includes all investments such as real estate, or is it just IRA and 401k type things? I don't put a whole lot towards my IRA these days because I'm allocating a big part towards a commercial lot and a future building.

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The 10% " guideline" is usually just a starting point for most folks as a minimum one needs to sock away in order to have a relatively decent retirement. This usually assumes that , sadly like most Americans , the auto-deduct into their 401k is damn near the only investment they make. If you are building a portfolio of real estate and such it isn't as vital that you work your 401k HOWEVER it should still be a leg of your retirement strategy and is great to get the free money of the match and the tax free compounding growth.
Back to your original question...
IF you only stick to the 10% thing for your entire 40ish years of work you will , most likely be fine ( not rich just fine). This is the bare minimum , to be really secure most folks need to max out in their later years and really build a nice retirement account .

like stated, 10% is a "guideline" to get people to do something

it would be more fruitful to look at your annual budget to determine what you will need in retirement

People never count the matching in that number for some reason so don't forget that. We are doing 20% to our 401k by virtue of enjoying dollar for dollar matching up to 10% (this is very rare and realize we are lucky here). Other things to count towards 10% - Roth IRAs, HSAs, all taxable investment accounts.

Whether you want to retire early or not, here's some food for thought on savings rate:

http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

I think most corporate employees save more than 10% when factoring in company match.

Just want to point out that 10% of 180,000 is still the 401k max soooo....10% may be all some can literally contribute.

exactly.

M.C. Swag said:

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Just want to point out that 10% of 180,000 is still the 401k max soooo....10% may be all some can literally contribute.

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match doesn't count towards your limit.

10% of 180K =

Cyp0111 said:

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10% of 180K =

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plus match equals saving more than 10%, no?

Edit: we are esstenially saying the same thing. The effective savings rate is likely higher.

I think it depends on your income what is right for you.

Strike a balance between your present self and future self.

The best way is to earn more money in my opinion.

Ragoo said:

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Cyp0111 said:

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10% of 180K =

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plus match equals saving more than 10%, no?

Edit: we are esstenially saying the same thing. The effective savings rate is likely higher.

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lol I was making a joke about how 10% is a stupid rule because it doesn't take into account your actual income. 10% of 180k is 18k, which is the EMPLOYEE contribution limit. The EMPLOYER match is not included in that but has an upper total limit of $54k/year.

M.C. Swag said:

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Ragoo said:

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Cyp0111 said:

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10% of 180K =

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plus match equals saving more than 10%, no?

Edit: we are esstenially saying the same thing. The effective savings rate is likely higher.

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lol I was making a joke about how 10% is a stupid rule because it doesn't take into account your actual income. 10% of 180k is 18k, which is the EMPLOYEE contribution limit. The EMPLOYER match is not included in that but has an upper total limit of $54k/year.

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Some plans allow after-tax contributions to the IRS max of $53k. That's how the Mega Backdoor Roth exists.

Lol good to know

The topic was total saving, not just your 401K, so income limits are irrelevant to the discussion. Max that out, then move on to other investment vehicles.

bmks270 said:

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I think it depends on your income what is right for you.

Strike a balance between your present self and future self.

The best way is to earn more money in my opinion.

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While that is good advice. I think the key is to live well within your means at any income level.

Hell, preparing the food you and your family eat is probably the lowest hanging fruit of a solid financial plan.

29, single, no kids, no house (yes I know, I should buy a house)

Save roughly 35% through 401K max, IRAs, etc..

ColinAggie said:

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29, single, no kids, no house (yes I know, I should buy a house)

Save roughly 35% through 401K max, IRAs, etc..

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DONT LET THEM GET TO YOU! STAY STRONG!

ColinAggie said:

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29, single, no kids, no house (yes I know, I should buy a house)

Save roughly 35% through 401K max, IRAs, etc..

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buy one of those tiny houses.

I'm half joking.

Wife and I our in our mid/late twenties. Have 2 kids in daycare & a mortgage.

Including company match we are between 25%-30%.

For a while though while wife was staying home it was much lower. We also paid off about $70K of debt right away after school and during that time investments were much lower as were incomes.

ColinAggie said:

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29, single, no kids, no house (yes I know, I should buy a house)

Save roughly 35% through 401K max, IRAs, etc..

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why would you want to buy a house?

Ragoo said:

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ColinAggie said:

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29, single, no kids, no house (yes I know, I should buy a house)

Save roughly 35% through 401K max, IRAs, etc..

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why would you want to buy a house?

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Just seems to be a popular consensus when I talk to people about my lifestyle. Most say I'm just throwing money away in rent, but I just don't want to separate from the cash on the down payment because the market has been doing great for me lately.

ColinAggie said:

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Ragoo said:

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ColinAggie said:

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29, single, no kids, no house (yes I know, I should buy a house)

Save roughly 35% through 401K max, IRAs, etc..

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why would you want to buy a house?

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Just seems to be a popular consensus when I talk to people about my lifestyle. Most say I'm just throwing money away in rent, but I just don't want to separate from the cash on the down payment because the market has been doing great for me lately.

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a couple of thoughts.

1) down payment on a house, the cash is tied up for a long time.
2) extra bull**** costs that your landlord covers now and more space that you will want to fill with crap.
3) flexibility, as a single dude

Some of the main reasons I haven't bought. I travel for a living too, so I'd be paying someone else to take care of it most of the time too.

now if you want to purchase real estate as an investment that is a different conversation.

Already in that.

Relative to other big cities renting in Texas is a good deal. Property taxes suck

There's just so much that goes into owning a home today. Prices are soaring and that 20% down payment is a killer. It's all too easy to get trapped in a house poor situation. As they say, rent is the most you'll pay in a month but a mortgage is the least. Don't get one because other people are pressuring you to do so.

I'll hold off until I get married to buy a house. So it looks like I'll be renting for a very very long time.

M.C. Swag said:

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There's just so much that goes into owning a home today. Prices are soaring and that 20% down payment is a killer. It's all too easy to get trapped in a house poor situation. As they say, rent is the most you'll pay in a month but a mortgage is the least. Don't get one because other people are pressuring you to do so.

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Very well put. Sage advice.

YouBet said:

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People never count the matching in that number for some reason so don't forget that. We are doing 20% to our 401k by virtue of enjoying dollar for dollar matching up to 10% (this is very rare and realize we are lucky here). Other things to count towards 10% - Roth IRAs, HSAs, all taxable investment accounts.

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I guess I am even luckier to have an employer to contribute 15% without me putting a dime into my 401k

newmayne4 said:

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YouBet said:

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People never count the matching in that number for some reason so don't forget that. We are doing 20% to our 401k by virtue of enjoying dollar for dollar matching up to 10% (this is very rare and realize we are lucky here). Other things to count towards 10% - Roth IRAs, HSAs, all taxable investment accounts.

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I guess I am even luckier to have an employer to contribute 15% without me putting a dime into my 401k

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That is pretty lucky, but they should incentivise people by only matching if the employee contributes as well.

Depending on the year I was usually saving between 50% of take home and 70% of gross, did that for about ten years. I **** around on texags and reddit and swim laps these days. Beats the **** out of staff meetings.

Peeps need AUM before they worry about mad gainz.