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Retirement savings: Couple starts late. How much to put away?

Retirement savings are small for a couple that's turned 30. Save 10 percent of his salary, at a minimum. See question No. 7 in the reader mailbag.

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Q6: Charity
Your ideas about charity are silly. Most of the people reading your blog are the people that should be receiving charity, not giving it. If you’re giving money away while you’re barely making minimum wage, you’re a fool.
- Alan

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The Simple Dollar is a blog for those of us who need both cents and sense: people fighting debt and bad spending habits while building a financially secure future and still affording a latte or two. Our busy lives are crazy enough without having to compare five hundred mutual funds – we just want simple ways to manage our finances and save a little money.

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I can’t tell you how much I disagree with that.

Charity isn’t about emptying your wallet for someone else. It’s about giving what you have to help someone who doesn’t have what they need. For some people, that might be time. For others, it might be their talents. For still others, it might be their money.

I consider it charitable work when I spend a few hours collecting food or sitting in a phone bank. Those choices don’t require me to spend a dime of my money. Instead, they ask me to give something else: my time. I’ve also given presentations for free to groups who have requested it; again, it’s my time and talent I’m giving, not my money.

Everyone has something in their life that they’re not using effectively, whether it’s time or money or talents. Simply giving a little bit of that excess to a group that can convert it into something that others desperately need is always a good thing.

Q7: How much for retirement?
My fiance and I are 30. After a year working at a horrible, low-paid job in his field, he has accepted a new job paying $91,000 plus excellent benefits. He has no retirement savings whatsoever, but the new job has a 401(a) with a 5 percent match. I have a very small 401(k) left over from my previous job. I’m currently in graduate school and surviving on loans.

I am trying to figure out how much my fiance should contribute to his 401(a) to save for retirement for both of us. I know he should at least hit the match percentage, but we’re both starting late on saving for retirement.
- Jenna

In general, a 401(a) plan that allows employee contributions is known as a 401(k) plan. 401(a) is a more general term than a 401(k), in other words. I’m going to assume based on your email that this is a 401(a) plan that allows for pre-tax employee contributions; in other words, a 401(k).

If that’s the case, your fiance should be putting in at least enough so that he’s saving 10% of his income for retirement at a bare minimum. Given that he’s not contributed anything as of yet in his life, 12% is probably a better target. So, that means he’d contribute 7% himself and scoop in 5% from his employer.

As for investment choices, he should try to get into a target retirement fund that most closely matches his 70th birthday. This will provide him with the simplest route to a properly diversified retirement.

Q8: Bryce Harper and Mike Trout
I’ve got to know what you think of the two really young guys who are making a big impact in baseball this year, Mike Trout and Bryce Harper. These guys are going to have 20-25 year major league careers. How do you think they will pan out?
- Joe

The amount of talent being put on display by those two young guys this year is just incredible. It’s amazing that Trout is hitting over .350 and is a strong contender for AL MVP (let alone rookie of the year) before his 21st birthday (coming up in early August). Bryce Harper, on the other hand, is 19 (and won’t be 20 until after the season is over) and is hitting .275 (Trout only hit .220 at age 19 in the big leagues during his stint late last year).

When guys get off to career starts like this, all you can hope is that they don’t have a major injury along the way. These two guys have the potential to chase a lot of career numbers over the next twenty to twenty five years. It seems crazy to think about, but if they continue growing as baseball players do and hit their peaks a decade from now, these two guys could be chasing pretty much every career record in the books when they’re at the end of their thirties.

I truly hope these guys both are able to have injury-free and conflict-free careers, because it will be a lot of fun to watch.

Q9: Monetizing a blog
I’m looking to monetize a new blog and am curious what the best services and methods are to use?
- Marcus

If you’re starting from scratch, your best tool is Google AdSense. This will enable you to place ads on pretty much any website that you wish to create. The ads will be automatically generated based on the content of the site you’re placing the ads on.

If you’re going to ever mention a product, there’s a decent chance you’ll link to the product on Amazon. If that’s the case, you should sign up for Amazon Associates. You just link to Amazon like normal and you get a small cut of anything that the person who visits Amazon through your link buys.

There are as many affiliate-type programs as there are grains of sands on the beach, but that largely involves selling to your readers, which is a pretty poor idea if you’re getting started.

Q10: Dental care
What products are worth buying for home dental care? Is it worth dropping money on things like a Sonicare toothbrush or not?
- Monica

All I can go by here is what my dentist told me, which is that if you brush your teeth at least once a day for two minutes and floss beforehand, your teeth should be just fine.

He seemed to indicate that while there is some variation between toothbrushes and toothpaste, it’s far far more important to just brush and floss every day regardless of what you use.

In other words, I wouldn’t sweat it too much.

Got any questions? Email them to me or leave them in the comments and I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive hundreds of questions per week, so I may not necessarily be able to answer yours.

The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on www.thesimpledollar.com.

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