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Archive for March, 2008

Retirement

March 30th, 2008 at 11:04 am

I've been tinkering around with some 401(k) and Roth IRA calculators and determined:

Assuming a conservative 4% rate of return, I can hit my target nest egg in only 25 years ! (At age 58)

This is using:
17% contribution to 401(k) with 3% employer match
$5000/yr. Roth IRA contribution

This doesn't include any additional monthly savings or CDs.

Target nest egg = 20x to 25x current salary

I'd be interested to hear from others if this is on track.

How much to save?

March 17th, 2008 at 01:12 pm

http://bankrate.com/brm/news/boomerbucks/20070411_retirement...

Bankrate.com has a great article complete with a chart showing how much you should be saving for retirement, taking into account what you have saved already. (In my humble opinion, these rates are too low, but a good place to start.)

I found this paragraph to be a cheerful, comforting point:

Net pre-retirement income refers to your gross salary minus the amount you're putting away for retirement. That stands to reason: After all, you're managing to live on your earnings minus retirement savings right now, and you won't be saving for retirement after you've retired. This takes some of the pressure off, since it substantially reduces how much you need to save.

Another rate cut

March 17th, 2008 at 08:13 am

The Federal Reserve on Sunday lowered the discount rate from 3.5% down to 3.25%.

"The Federal Open Market Committee meets Tuesday, and analysts now expect the Fed to lower the federal funds rate -- the rate banks charge each other -- by a full percentage point, to 2%. Analysts also expect the Fed to cut the discount rate again."

Buh-bye savings interest rates =(

Savings for LASIK - done!

March 16th, 2008 at 12:20 pm

On Friday, I opened a 9 month $3700 CD at 3.6% APY. This will cover the $3400 needed to pay for my LASIK. It will earn exactly $100 by maturity, leaving me with a nice sum of $400 that will be available right at Christmastime.

LASIK Plus offered me no interest, no payments for 12 months. A friend questioned why I don't just pay off the surgery if I have the money available and get it over with now? My answer was the $100 interest I can make on it! Why give it to the company before they demand it? Some people just don't share views!

Although my checking interest rate is still 3.82%, I feel it is good to lock in this 3.6% CD in anticipation of the FED lowering the interest rate another 0.75% (to 3.0%) this coming Tuesday.