I am counting on absolutely nothing from the federal government during retirement. If they figure out how to save social security it will be a nice bonus but until then I am not counting on it! 
This post had to follow foundation #8 because it is one of the great examples where the numbers are dead simple but behavior always gets in the way. Saving for your retirement is really very simple you need to just DO IT! I recommend people put 20% away for retirement and here is how I suggest you do it
Step 1: If you have a 401k availiable, contribute up to your company match.
Step 2: Max out your Roth IRA, which is $5k in 2008.
Step 3: Increase your 401k contribution so that the total of all 3 steps equals 20% of your total income. The max 401k contribution for 2008 is ($15,500).
So let’s have a little fun and play with some numbers to see what kind of nest egg you can have with 3 simple steps:
Start contributing: 25
Single Income 50K:
401K 3% = $1500 + $1500 company match
Max Single Roth: $5k
Additional 401k %: 4% / $2,000
Yearly Retirement Savings: 20% / $10,000
40 years @ 10% = 5.3 Million!
Start contributing: 25
Household income 100K:
401K 3% = $3000 + $3000 company match
Max 2 Roth’s: $10k
Additional 401k %: 4%
Yearly Retirement Savings: 20% or $20k
If you start this at 25 and grow it 40 years @ 10% = 10.6 Million!
Start contributing: 30
Household income 150K:
401K 3% = $4500 + $4500 company match
Max 2 Roth’s: $10k
Additional 401k %: 7% ($11k)
Yearly Retirement Savings: 20% or $30k
If you start this at 30 and grow it 35 years @ 10% = 9.5 Million!
Notice how the 100k income that starts 5 years earlier will outrun the $150k income! Starting earlier is key but either way you will have 10 Million! And the real kicker - half of that is not taxable as a reult of the Roth contribution. I did not start maxing out my 401k and Roth IRA until a few years ago and it was one of the few financial regrets I have!
Let’s take a different angle. Maybe you don’t have access to a 401k. As long as you make less than $99k (single ) $156k (married) you can contribut to the Roth IRA. If you did just that, the numbers would look like this:
Start contributing: 25
Single Income 50K:
Max Single Roth: $5k
40 years @ 10% = 2.6 Million!
With just the Roth you can have $2.6 million at retirement that is TAX FREE! A 4% draw on $2.6 million equals $100k a year TAX FREE! So the bottom line in all this: you need to find $416 in your monthly budget to max out your Roth IRA and fund your retirement. This is right around the average car payment in America!
We had an amazing weekend and everything went really well. It was great to spend time with lots of friends and family that we don’t usually see. We don’t have the official photos from the photographer yet but we do have lots of friends & family photos on 
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