While reading some articles about the economy, one sentence caught my eye. It wasn’t that big of a deal, even, just a financial planner commenting that one of the people profiled in the article should probably have put away more money for retirement.
Which, of course, brought me to my retirement plans.
Right now, I contribute 5% to my TSP (government 401(k)) and fully fund my Roth IRA. I’m starting to wonder if I should do more or if I’m doing the right thing by just putting money into my savings account. I don’t think that I will contribute the full 15%, but I’m considering going up to a 10% contribution.
Were the markets doing well, I think this would be a much easier decision to make, though I’m well aware that’s not how to make retirement decisions.
At this point, I do still rent, so I’m always putting away money for a down payment. I don’t have plans to buy soon, and I don’t have a set amount that I hope to save. Just “as much as possible.” So the other option for the money is to put that extra 5% into that savings account.
Changing my retirement contributions is easy. I can do it online in just a few clicks. So it’s not as if I’m locking myself into some long term decision.
Before I do anything, I’m waiting to see what my paycheck looks like with my promotion. So that gives me a few more weeks to think. What would you do?
Megan is a 30-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:
In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance. It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information. It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck. While that was working for me, clearly I needed a better plan.
While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.
Except that’s not what an emergency fund is for.
So I did a lot of research, read a lot of blogs, and decided that I needed a plan. I needed to budget. I needed to know what I was spending my money on. I needed to prepare for the future.
I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way. I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.
I’m no financial planner but with this economy, I’d say keep saving for your down payment… I hope you’re working towards 20% down because that will really defray your mortgage once you get there. I hope you can find something soon, before the real estate market picks back up. Have you looked to see if there’s anything really cheap in the area you want to move to?
I’ve been reading your blog (when I can) for months now and it seems like you’re on the right track. Good for you. Vikki at http://www.survival-cooking.com
I would put a little bit more away for retirement. Especially because now is a great time to invest if you have more than 20 years.
I went to a financial planning seminar my place of work hosted and it convinced me to put away more, even just 2% more.
I’ve increased my TSP contribution to the full IRS limit; although, I’ve changed my allocations to put 60% in G (for safety because I’m AFRAID this current recession is like no other), with 10% increments divided between the other funds (common stocks, bond fund, small cap, and international). I have law enforcement retirement, so I can only work a few more years. If I had longer, I would feel more comfortable putting more in the riskier funds. My husband and I also fully fund our Roth IRA’s, which are in riskier funds (sigh). If I were in your position, I would have no problem increasing my contribution, especially while the market is low. Like you said, it easy to make a change online!
You really ought to think of buying a house before 12/1/09 as the government is giving up to $8,000 credit. (First time home buyer’s credit.) Free money that does not have to be paid back. Also, housing prices are the lowest they have been in a long time.
Pamela, that’s a good point, but I’m not convinced that I’m going to be staying in the D.C. area for long enough to make buying a house a good idea. And D.C. housing prices, while low, are still inflated, so it’s not as great of a “deal” as it is elsewhere.
In reality, due to the promotion by credit card providers, Balance Transfers seem to be more spoke about than credit card debt consolidation loan.
Only the amount moved is interest complimentary.