If you want to retire rich, and enjoy the luxury life, it is a little bit hard.

If you don’t want to retire rich or retire with luxury life, it is quite simple. You just need to accept what you have now is more than enough. Don’t chase for luxury life.

As for reasonable limit how much money is needed, it is really up to you. It is also very subjective and it really depends what you want in life.

First thing you want to ask, when am I going to die? The second question is you want to ask is, when do I want to retire? The third question is the answers, how much money I need to spend after my retirement in a year? So the calculation will be something like this:

How much money I need? = (Money Spend in a year) X (# of years after retirement before you die) + (inflation in ever year)

I’m now 29, and I plan to retire at 40. I calculate how much money I need and now Im working very hard to achieve that. It is a stretch goal for me.

Well what you need to do is talk to a financial analyst and have them draw up a plan for you. Everyones plan is different so you can’t just ask someone and expect an answer which will suit you. You dreams for retirement are different than the next person. I’m so happy to see that you have an IRA but there are other things you can do. Invest in a mutual fund or the stock market. Not all your money, but a small poriton maybe.
You need to have a financial analyst figure out your FIN (financial independence number). This is the amount of money you will need to retire secure and not run out of money early.

I just wanted to say how proud I am that you are thinking of retirement!!! You are 24 and being obsessed about it is Wonderful! Social Security is going away and Pensions are being cut everywhere. All people are left with is their own savings. However, people don’t save Nearly as much as they should. The fact that you think about it is great. I’m sure you will be fine and have nothing to worry about.

Rest a little easier than that my friend. You sound like you have a very good head on your shoulders and are headed in the right direction, but you have a lot of living to do before retirement. Your IRA’s are a great idea. A 401K is especially nice because of the company match. They grow faster. You won’t have any great memories to hold on to when you do retire, if you don’t make any. So save some, play with some, and enjoy your life.

I would try to invest 15% of my income. That is what Dave Ramsey and many others recommend.

Put your 401(k) up to the amount of any company match, then put the rest in a ROTH IRA. When you retire, that will give you a source of taxable income, as well as a source of TAX-FREE income!!

If you still have not reached the 15% level after maxing out your ROTH, then you can increase your 401(K) above the level of the company match.

As young as you are, you should be almost completely in stocks. Make sure you have a healthy portion in international stocks as well. I’d probably recommend:
20% small cap domestic
20% mid cap domestic
20% large growth domestic
20% international stocks
10% bonds
10% money market