Monday, May 07, 2012

Can you save too much in retirement?

A recent question on the Daily Worth message boards was can you save too much for retirement? 

Question Marks
I know there's supposedly no such thing, but I have a defined benefit pension, my husband and I are each maxing out our 401Ks, and I have a Roth IRA (although we're now past the income limits to continue contributing to it). So my question is, if this amount of retirement savings is delaying buying our next house, is it possible that we're saving too much for retirement? When should you stop saving and start enjoying the money a bit more? 
My husband and I are both 30, which also makes it very hard to talk about specific retirement numbers, since it's so far away.

My response..... 

I don't know if I would ever be in a position to say we are saving too much.  We are putting away 15% of my husband's income his 401k and we fund my roth each year. I really don't feel that is truly enough and some the retirement calculators confirm this. Now if I was saving maxing out 401k and Roths in my mine and my husbands, I would probably say that is enough.    You can earmark money from an annuity or do a tax advantage mutual fund if you wanted more of a cushion.  

If you you have other dreams, like buying a house that should be part of your retirement not have a mortgage when you retirement. Retirement should also come before paying for the kids college. 



Anonymous said...

I would happy to save $500k but I got a home payment, college coming up PLUS too much debt. Argh. Help me

Admin said...

I would recommend Dave Ramsey Total money makeover to help you get out of debt and starting to save money. Also do you have a budget