Comments on: The Retirement Conundrum: Near-Term vs. Long-Term Goals http://www.onlinesavingsblog.com/2008/03/03/the-retirement-conundrum-near-term-vs-long-term-goals/ Personal finance, online finances, and more. Fri, 21 Nov 2008 11:41:47 +0000 http://wordpress.org/?v=2.6.3 By: Carnival of Personal Finance #143 - Oh Canada Edition http://www.onlinesavingsblog.com/2008/03/03/the-retirement-conundrum-near-term-vs-long-term-goals/#comment-741 Carnival of Personal Finance #143 - Oh Canada Edition Mon, 10 Mar 2008 02:17:22 +0000 http://www.onlinesavingsblog.com/2008/03/03/the-retirement-conundrum-near-term-vs-long-term-goals/#comment-741 [...] Online Savings Blog wrestles with the conundrum of short term goals vs. long term goals. [...] [...] Online Savings Blog wrestles with the conundrum of short term goals vs. long term goals. [...]

]]> By: Early Retirement Extreme http://www.onlinesavingsblog.com/2008/03/03/the-retirement-conundrum-near-term-vs-long-term-goals/#comment-735 Early Retirement Extreme Tue, 04 Mar 2008 18:22:18 +0000 http://www.onlinesavingsblog.com/2008/03/03/the-retirement-conundrum-near-term-vs-long-term-goals/#comment-735 It is not really a conundrum if you know what your goals are. IRS sponsored retirement plans (and medicare and social security) are for people who wish to spend 30-40 years working and maximize their expenses during that time. For such a plan one should save 15-20% of one's income to continue at an uninterrupted expense level. Those who spend more than 85% of their income will get burned come retirement (e.g. they wont have any). Those who desire to retire earlier have to save in taxable accounts and reduce expenses rather than focus everything on a 401k, ROTH and a 30 year mortgage. There is rule 72(t) that allows some messing around with a ROTH prior to being 59.5. It is not really a conundrum if you know what your goals are. IRS sponsored retirement plans (and medicare and social security) are for people who wish to spend 30-40 years working and maximize their expenses during that time. For such a plan one should save 15-20% of one's income to continue at an uninterrupted expense level. Those who spend more than 85% of their income will get burned come retirement (e.g. they wont have any). Those who desire to retire earlier have to save in taxable accounts and reduce expenses rather than focus everything on a 401k, ROTH and a 30 year mortgage. There is rule 72(t) that allows some messing around with a ROTH prior to being 59.5.

]]> By: SW http://www.onlinesavingsblog.com/2008/03/03/the-retirement-conundrum-near-term-vs-long-term-goals/#comment-734 SW Tue, 04 Mar 2008 14:18:31 +0000 http://www.onlinesavingsblog.com/2008/03/03/the-retirement-conundrum-near-term-vs-long-term-goals/#comment-734 Retirement or Mortgage? That's the same question that I've been faced with. In my opinion, if you have a mortgage, first priority would be to pay down and get rid of that debt as soon as possible. You also have to weigh out that if the interest rate that is being charged for the mortgage is higher than what you would receive in your Retirement Fund, then pay off the mortgage first. Retirement or Mortgage?

That's the same question that I've been faced with. In my opinion, if you have a mortgage, first priority would be to pay down and get rid of that debt as soon as possible. You also have to weigh out that if the interest rate that is being charged for the mortgage is higher than what you would receive in your Retirement Fund, then pay off the mortgage first.

]]> By: MA http://www.onlinesavingsblog.com/2008/03/03/the-retirement-conundrum-near-term-vs-long-term-goals/#comment-732 MA Mon, 03 Mar 2008 14:35:09 +0000 http://www.onlinesavingsblog.com/2008/03/03/the-retirement-conundrum-near-term-vs-long-term-goals/#comment-732 I've also been faced with this question. The following things seemed to make sense to me: 1) Calculate what you will need in retirement and make 100% sure you are saving enough. Most people are NOT saving enough by merely getting their employer match. However, this is a personal decision and calculation. I find most people haven't even run the numbers to know. 2) Assuming you have done #1, decide your goals. There is no way that blanket advice like "fund a Roth" can work if you don't even know someone's goals. Other goals are not in conflict with retirement, they are in addition to. Money over and above your monthly living expenses should provide you the ability to achieve your goals. Although I would contend that for most people, retirement should be #1 on the savings goal list, once you are contributing enough to satisfy that goal, there is no reason why you shouldn't accomplish other goals. The object was to reach goals, not accumulate the biggest pot of cash. I've also been faced with this question. The following things seemed to make sense to me:

1) Calculate what you will need in retirement and make 100% sure you are saving enough. Most people are NOT saving enough by merely getting their employer match. However, this is a personal decision and calculation. I find most people haven't even run the numbers to know.

2) Assuming you have done #1, decide your goals. There is no way that blanket advice like "fund a Roth" can work if you don't even know someone's goals. Other goals are not in conflict with retirement, they are in addition to.

Money over and above your monthly living expenses should provide you the ability to achieve your goals. Although I would contend that for most people, retirement should be #1 on the savings goal list, once you are contributing enough to satisfy that goal, there is no reason why you shouldn't accomplish other goals. The object was to reach goals, not accumulate the biggest pot of cash.

]]>