I am a 31 year old attorney with a 10 month old baby. I make $130K a year. My husband is also an attorney, and makes approx. $60K a year.

WE both do not have any retirement savings or college savings for our baby. My husband is 37. I am starting to get very concerned about this but at the same time our expenses, as well as our student loans take up most of our money. We are able to save $1,000 a month. My firm contributes approx. $4,000 a year (no match necessary) into my profit sharing account. Besides that, there is nothing else going into savings.

We both have a combined student loan debt of $300K and a mortgage for $220K. We pay aggressively on one loan, which should be paid off in 6 years (pay $2500 a month/ minimum payment is $1000) with the thought that increases in income as well as eventually money that is going to student loans, will go to our retirement. I know people say save save, but there is not much room to take from. Are we in a lot of trouble, or should we just progress as we are?

  • 13
    Is your question simply "Should we save for retirement"? I can answer that in three letters.
    – JohnFx
    Aug 7, 2014 at 1:40
  • Do you have any equity in the home? In other words, the mortgage is for $220k, what's the market value of the home in excess of that.
    – DanTilkin
    Aug 7, 2014 at 21:08
  • 1
    There's a lot more room to save than you think. You're spending something like $100k/yr not counting your debt payment. Most people don't spend that much. Nov 16, 2017 at 5:04
  • I'm sorry, explain to me how 16% of your large, combined income is paying off your loans "aggressively?" If you scaled your lifestyle back a little, you could probably be putting more than $8k/month into that debt.
    – BlackThorn
    Nov 17, 2017 at 0:32

6 Answers 6


You aren't in trouble yet, but you are certainly on a trajectory to be later. The longer you wait the more painful it will be because you won't have the benefit of time for your money to grow. You may think you will have more disposable income at some point later when things are paid off, but trust me you wont. When college tuition kicks in for that kid, you are going to LAUGH at those student loan amounts as paltry.

The wording of your question was confusing because you say in one place that you have no savings, but in another you claim to be putting away around $5k/year. The important point is how much you have saved at this point and how much you are putting in going forward.

Some rules of thumb from Fidelity: (Based on your scenario)

  • By 30: you should have about 1 year's salary or $190K saved.
  • By 35: you should have about 2x that or $380K.
  • By 45: you should have about 4x that or $760K.
  • By 67: you should have about 10x that or $1.9M.

Take a look at your retirement account. Are you on track for that? It doesn't sound like it.

Can you get away with your current plan? Sure, lots of people do, but unless you die young, hit the jackpot in the stock market or lottery, you are probably going to have to live WELL below your current standard of living to make that happen.

  • 2
    Do you have a link for the Fidelity numbers? I'd be curious to read more.
    – Alex B
    Aug 8, 2014 at 5:13
  • Added link. Keep in mind that there are a ton of variables, this is just a generic rule of thumb one company suggests.
    – JohnFx
    Aug 8, 2014 at 13:52
  • Link and recommendations updated for 2017.
    – shoover
    Nov 15, 2017 at 21:00
  • 3
    For those like me who look at those rule of thumb with dismay, here's the assumption underlying those values: Our savings factor rule of thumb is based on some key assumptions: You start saving a total of 15% of your income every year starting at age 25, invest more than 50% of your savings in stocks on average over your lifetime, retire at age 67, and plan to maintain your preretirement lifestyle
    – iheanyi
    Nov 16, 2017 at 0:15

You are making close to 200 K a year which is great. The aggressive payments on loans takes out around 30K which is good. The fact that you are not able to save is bad.

Rather than pushing off your savings to later, scale down the lifestyle and push the upgrade to lifestyle for later

  • 2
    Cutting down expenses is always easier than making more money.
    – Leon
    Nov 16, 2017 at 9:04

Yes, you should be saving for retirement.

There are a million ideas out there on how much is a reasonable amount, but I think most advisor would say at least 6 to 10% of your income, which in your case is around $15,000 per year.

You give amounts in dollars. Are you in the U.S.? If so, there are at least two very good reasons to put money into a 401k or IRA rather than ordinary savings or investments: (a) Often your employer will make matching contributions. 50% up to 6% of your salary is pretty common, i.e. if you put in 6% they put in 3%. If either of your employers has such a plan, that's an instant 50% profit on your investment. (b) Any profits on money invested in an IRA or 401k are tax free. (Effectively, the mechanics differ depending on the type of account.) So if you put $100,000 into an IRA today and left it there until you retire 30 years later, it would likely earn something like $600,000 over that time (assuming 7% per year growth). So you'd pay takes on your initial $100,000 but none on the $600,000. With your income you are likely in a high tax bracket, that would make a huge difference.

If you're saying that you just can't find a way to put money away for retirement, may I suggest that you cut back on your spending. I understand that the average American family makes about $45,000 per year and somehow manages to live on that. If you were to put 10% of your income toward retirement, then you would be living on the remaining $171,000, which is still almost 4 times what the average family has. Yeah, I make more than $45,000 a year too and there are times when I think, How could anyone possibly live on that? But then I think about what I spend my money on. Did I really need to buy two new computer printers the last couple of months? I certainly could do my own cleaning rather than hiring a cleaning lady to come in twice a month. Etc.

A tough decision to make can be paying off debt versus putting money into an investment account. If the likely return on investment is less than the interest rate on the loan, you should certainly concentrate on paying off the loan. But if the reverse is true, then you need to decide between likely returns and risk.

  • Not every IRA / 401(k) is Roth. Traditional IRA and 401(k) accounts do pay tax on earnings.
    – Ben Voigt
    Oct 12, 2018 at 2:44
  • @BenVoigt That's why I said "effectively". The net result of a traditional IRA is that you don't pay taxes on the earnings. Suppose you put $100,000 into a retirement plan, you pay 20% in taxes, and your investment triples between when you put it in and when you take it out. With a Roth IRA, you would pay 20% up front, leaving you $80,000 to invest, which triples to $240,000, which you then withdraw tax free. With a traditional IRA, you invest the full $100,000, which triples to $300,000. You then pay 20% when you withdraw it, leaving $240,000, the exact same amount.
    – Jay
    Oct 12, 2018 at 13:25
  • Note my point in the previous post is that the net effect of the rules for the two types of IRA are the same. My arithmetic is based on the assumption that your tax rate when you put money in is the same as your tax rate when you take it out, which is a huge assumption that is almost certainly not true. A Roth is better if you expect your tax rates in retirement to be higher; traditional is better if you expect them to be lower. And there are other differences in the rules. This is not intended to be a full analysis of the pros and cons, just considering one point.
    – Jay
    Oct 12, 2018 at 13:28

First, I would recommend getting rid of this ridiculous debt, or remember this day and this answer, "you will be living this way for many years to come and maybe worse, no/not enough retirement". Hold off on any retirement savings right now so that the money can be used to crush this debt.

Without knowing all of your specifics (health insurance deductions, etc.) and without any retirement contribution, given $190,000 you should probably be taking home around $12,000 per month total. Assuming a $2,000 mortgage payment (30 year term), that is $10,000 left per month.

If you were serious about paying this off, you could easily live off of $3,000 per month (probably less) and have $7,000 left to throw at the student loan debt. This assumes that you haven't financed automobiles, especially expensive ones or have other significant debt payments. That's around 3 years until the entire $300,000 is paid!

I have personally used and endorse the snowball method (pay off smallest to largest regardless of interest rate), though I did adjust it slightly to pay off some debts first that had a very high monthly payment so that I would then have this large payment to throw at the next debt.

After the debt is gone, you now have the extra $7,000 per month (probably more if you get raises, bonuses etc.) to enjoy and start saving for retirement and kid's college. You may have 20-25 years to save for retirement; at $4,000 per month that's $1 million in just savings, not including the growth (with moderate growth this could easily double or more). You'll also have about 14 years to save for college for this one kid; at $1,500 per month that's $250,000 (not including investment growth). This is probably overkill for one kid, so adjust accordingly. Then there's at least $1,500 per month left to pay off the mortgage in less than half the time of the original term!

So in this scenario, conservatively you might have:

  • No student loan debt in 3 years.
  • No mortgage debt and an extra $3,500 per month in 10 years.
  • Over $300,000 for college in 14 years.
  • Over $2 million for retirement in 20 years.

Obviously I don't know your financials or circumstances, so build a good budget and play with the numbers. If you sacrifice for a short time you'll be way better off, trust me from experience.

As a side note: Assuming the loan debt is 50/50 you and your husband, you made a good investment and he made a poor one. Unless he is a public defender or charity attorney, why is he making $60,000 when you are both attorneys and both have huge student loan debt? If it were me, I would consider a job change. At least until the debt was cleaned up. If he can make $100,000 to $130,000 or more, then your debt may be gone in under 2 years! Then he can go back to the charity gig.


As a rule, one should have a retirement.

HOWEVER, you also have over a half a million dollars of debt. Paying down debt is another way to prepare for retirement. I would say throwing your excess money at your debts is a fine strategy right now. Especially the student loan (the mortgage probably has a lower rate and brings tax savings, so paying it off is less urgent).

If I were you I'd probably put SOMETHING into tax deferred retirement accounts because in your tax bracket, the savings from doing so are significant. The max you can put in tax deferred is $5,500 per year (each) in IRA's and up to $17,000 to your 401(k) each. The tax-saving contribution opportunities will not come up again...you can't make up for it later.

Any retirement saving beyond the tax advantaged part makes no sense while you have outstanding debt.


The question regarding your snapshot is fine, but the real question is what are you doing to improve your situation?

As John offered, one bit of guidance suggests you have a full year's gross earnings as a saving target. In my opinion, that's on the low side, and 2X should be the goal by 35.

I suggest you look back, and see if you can account for every dollar for the prior 6-12 months. This exercise isn't for the purpose of criticizing your restaurant spending, or cost of clothes, but to just bring it to light. Often, there's some low hanging fruit in this type of budgeting exercise, spending that you didn't realize was so high.

I'd also look carefully at your debt. What rate is the mortgage and the student loans? By understanding the loans' rates, terms, and tax status (e.g. whether any is a deduction) you can best choose the way to pay it off. If the rates are low enough you might consider funding your 401(k) accounts a bit more and slow down the loan payments.

It seems that in your 30's you have a negative net worth, but your true asset is your education and future earning potential.

From a high level view, you make $180K. Taking $50K off the top (which after taxes gives you $30K) to pay your student loan, you are still earning $130K, putting you at or near top 10% of families in this country. This should be enough to afford that mortgage, and still live a nice life.

In the end there are three paths, earn more (why does hubby earn half what you do, in the same field?), spend less, or reallocate current budget by changing how you are handling that debt.

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