Are my pension and ROTH IRA enough?

[ScrimpAndSave]

I automatically contribute 7.5% of my pay to my pension. I have about 30 years until I retire - so who knows what stipulations and rules with apply to my pension at that point...but as of right now, when teachers in my district retire, their salary is averaged over all of the years they have worked in the district. So if they taught for 35 years, they are given the average salary rate that they worked all of those years. 100% of it.

On top of this, I am going to have a ROTH IRA that has been funded to the max every single year for 30 years (next year will be my first year maxing it out).

Should I be looking in other areas to invest for retirement? I also have a 403b from my old job that has about $3,500 in it...but because of the fees I decided to let that one sit (since it is an variable annuity) and fund a Roth instead.

The rest of my money I wanted to divide into general emergency fund savings, "new" car savings, short term savings etc. I don't know if I should have a mutual fund on top of my pension and Roth IRA as well.

Thank you all!

[creditcardfree]

Eventually, yes, you may want a mutual fund in addition to your other savings. You might look at your retirement in terms of percentage of your gross income. If you are saving 10% now, you may look to keep increasing that by a couple of percentage points each year. And, diversifying where you money is would be important, too.

[MonkeyMama]

Agreed.

I wouldn't rely heavily on a pension.

You are probably at a good starting point, butI would definitely increase retirement savings (%) with time.

[disneysteve]

I think you should be investing a minimum of 10% for retirement and preferably more. I also wouldn't be too dependent on the pension as a lot can change in 30 years, as many workers have found out. Future contracts can change the terms of the pension plan so that you may not collect the generous benefits that current retirees enjoy.

[creditcardfree]

My DH is military and will receive retirement benefits, but we still max out our Roth's and contribute to his TSP (government 401K). We are saving nearly 17% towards retirement....just in case that retirement benefit changes or doesn't come through. Unfortunately, many miliatry depend on this benefit alone.

[GREENBACK]

I really wish they would raise the contribution limits on IRA's. They would be such a great alternative for people like Scrimp and Save that don't want to throw money down the variable annuity drain.

[disneysteve]

I really wish they would raise the contribution limits on IRA's.

Amen to that. Only about 50% of all US workers are eligible for a 401k. I'm in the other half. All I've got is my Roth, so I can only put away $5,000 for me and $5,000 for my wife each year. That isn't nearly enough. The rest goes into taxable accounts. At least they did finally add inflation indexing so the limit will rise gradually. Of course, it stayed at $2,000 for 20 years.

[LivingAlmostLarge]

Scrimp, what percentage of your salary is the Roth? Are you at 15% with $5k and 7.5% to pension? That would probably be enough.

What is the likelyhood of not getting 100% of your salary but say 75% in 30 years?

[ScrimpAndSave]

LivingAlmostLarge,

I am at 15% with my roth and pension contributions. I have no idea what the likelyhood of my pension not coming through 100% in 30 years...only time will tell.

[disneysteve]

I am at 15% with my roth and pension contributions. I have no idea what the likelyhood of my pension not coming through 100% in 30 years...only time will tell.

I think 15% to retirement is great. No need to do more than that. I would focus additional monies on other financial needs outside of retirement.

[Ima saver]

I agree with disney steve. I have had an IRA for several years, but because I could only put $2000 a year in it, there is not very much money in it now. Plus, it took a hit when the stock market went down. At least with mutual funds, you can put in as much as you want.

[LivingAlmostLarge]

Good enough for me. Consider funding other goals like wedding, car, vacations, fun, cable/internet, etc. You've done enough!

[disneysteve]

Good enough for me. Consider funding other goals like wedding, car, vacations, fun, cable/internet, etc. You've done enough!

Yep. As Jim always posts, 20% for savings - 15% for retirement, 5% for everything else.

[ScrimpAndSave]

Ok great. Between my pension and my ROTH, I just realized that I am contributing about 17%ish.

[tripods68]

Existing Government Pension formula for current government workers, teachers, firefighters, and police cannot be changed abitrarily It's like changing the rules during the game. The US Supreme Court has ruled against this decades ago. I for one, have a government pension.