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<blockquote data-quote="Ms.PacMan" data-source="post: 1095885" data-attributes="member: 4656"><p>They don't match because they give us a pension. It perfectly okay to invest without a match. It's also great to buy stock but I think the compounding effect of the 401K is better. You can contribute $17,500 to a 401K and $5500 to an IRA for 2013.</p><p></p><p>How much should I save and what was my goal, was a hard question for me at first. When I started reading about SWR or safe withdrawal rates (of your nest egg) it made things much clearer. They say (based on past market performance and monte carlo simulators) that a person should be able to withdraw 4% of his nest egg the first year and then 4% + whatever inflation was the year prior in subsequent years and have a 95% success rate making withdrawals for 30 years. 3.5% or even 3% withdrawals are even safer and have a near 100% success rate of not running out of money before you die.</p><p></p><p>So I looked at my worst case scenario - an early 25 yr, under age 57, pension in CS pays $2000/mo or $24,000/yr. I decided I wanted to at least replace this pension with my own money or double it if I made it to retirement with the pension intact or even better it and used the 4% SWR as a guideline.</p><p></p><p>If I wanted $24,000/yr for 30 yrs in retirement, only withdrawing 4% (so it would last 30 yrs), it meant that I had to somehow save $600,000. That's where the calculators came in and I began to play around with contribution rates and investment return rates to see what the outcomes would be.</p><p></p><p>We were making in the 20% range with the old 401K funds in the 90's and I really thought I had it licked and didn't max it out. But the ecomony got tough and I got very serious and decided I would have to live below my means to make my goal. I have a total retirement nest egg of $529,000 now (I also have dividend stocks in a brokerage acct, UPS stock, I bonds, Roth IRA and cash) and I wouldn't trade the security I feel for a bigger house or new car.</p></blockquote><p></p>
[QUOTE="Ms.PacMan, post: 1095885, member: 4656"] They don't match because they give us a pension. It perfectly okay to invest without a match. It's also great to buy stock but I think the compounding effect of the 401K is better. You can contribute $17,500 to a 401K and $5500 to an IRA for 2013. How much should I save and what was my goal, was a hard question for me at first. When I started reading about SWR or safe withdrawal rates (of your nest egg) it made things much clearer. They say (based on past market performance and monte carlo simulators) that a person should be able to withdraw 4% of his nest egg the first year and then 4% + whatever inflation was the year prior in subsequent years and have a 95% success rate making withdrawals for 30 years. 3.5% or even 3% withdrawals are even safer and have a near 100% success rate of not running out of money before you die. So I looked at my worst case scenario - an early 25 yr, under age 57, pension in CS pays $2000/mo or $24,000/yr. I decided I wanted to at least replace this pension with my own money or double it if I made it to retirement with the pension intact or even better it and used the 4% SWR as a guideline. If I wanted $24,000/yr for 30 yrs in retirement, only withdrawing 4% (so it would last 30 yrs), it meant that I had to somehow save $600,000. That's where the calculators came in and I began to play around with contribution rates and investment return rates to see what the outcomes would be. We were making in the 20% range with the old 401K funds in the 90's and I really thought I had it licked and didn't max it out. But the ecomony got tough and I got very serious and decided I would have to live below my means to make my goal. I have a total retirement nest egg of $529,000 now (I also have dividend stocks in a brokerage acct, UPS stock, I bonds, Roth IRA and cash) and I wouldn't trade the security I feel for a bigger house or new car. [/QUOTE]
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