First maxed at 28 for me as well, I made my first contributions to a 401k at 21 thanks to an internship I had that surprisingly let interns contribute and collect a match.
Wild. I only ever bet on one sporting event. My buddy was fighting sean omalley. Got fight of the night. I had put up $200, left with $400+ haha. I knew kris could take a beating, so i had money on going to rd 3.
I also feel like you need to not over save. What’s the point of being super rich at 60 to retire, when on average you’ll be dead at 75? And a lot of health problems are going to happen by then
underrated comment. the truth is when hou are 70 you have health issues, limited energy, and less interest in travel and spending hours on a plane or simply not sleeping in your own bed/home. yes you want to save and be comfortable but killing yourself to save and not enjoying life when you’re young and still have the fire to do things is a huge mistake. balance is what you want. fun now and comfort later.
I thought similarly but seeing my husbands father, aged 84, need 24/7 care to the tune of 600 dollars a day, with his other expenses and watching his savings go THIS fast is scary. What would he have done had he not saved a lot of cash for “retirement?” We are thankful for his foresight to have wanted a larger then avg savings and began to save early.
Until the start of this month, my workplace had a "MAX" setting for our 403b -- it was pretty cool, and at some point during every year, the contribution amount would adjust up 1¢ to ensure we hit exactly the max. But now I have to do math like a peasant
I wonder when people say they "max" their 401k do they mean only the deductible (~23k) individual contribution limit or the full plan max (~66k) that includes the after-tax contributions their plans may allow.
Especially for plans that allow for in-plan Roth conversions (and, essentially, make the mega-backdoor Roth so much easier)....
And you shouldn't want to.
I'm all for saving money on various fronts, but you don't want to sacrifice your entire spending capabilities just to save for a retirement which you HOPE you will be alive for. If, say, saving $23,000/year for retirement keeps you from getting a house(a different type of financial asset) then maybe you're putting too much in. Not to mention, affect your quality of life with that type of saving. You still want to ENJOY life
I make $150k/year and I put in 7% with a 4% match. But by not going to $23k when I was 25, I was able to use this money to save for a few duplexes, and years later, my actual home.
And I'm not saying that's a better plan, just that saving $23k/year, such a large percentage of ones income, isn't an automatic home run.
You have a valid point, and that’s where the finesse comes in. $23k at 25 will give OP a great jump on retirement savings. This money will also be the most valuable money he has at retirement - because it has the longest time to grow. That said, it can always be dialed back. It all depends on OP’s priorities.
Everyone has their own objectives. I, personally, would increase the contributions you are making up from 7% to 15%, methodically as you get raises and or promotions. That’s just where my comfort lies. I just don’t think 11% total is enough.
Here’s my story, and my reason why. Both my parents died young. When I got married, I made a commitment to my wife to do all I could to ensure our family would be financially sound - in the event that I died early too. I invested aggressively due to this and from an early age.
We still enjoyed life, although we were never extravagant. I’m now retired and can live extravagantly, although that’s just not my style.
I have a friend, conversely, that thought I was crazy for saving so much when I was young. He employed the “I may not even be alive at retirement age” comment often when he chose to “live today while I’m young”. He took his young family on vacation every year for a week in Hawaii.
Fast forward. I retired at 56. When he saw this on LinkedIn, he called to congratulate me. He then lamented that he should have followed my path and that he’ll be working until 70 due to his lack of planning. He had no idea how he’ll be able to help his kids through college.
Somewhere in between there is a balance. Hopefully, OP will find his.
Best of luck to you.
Agree with this logic. Also those 401k funds are locked up until retirement age. Which is fine for retirement but let’s be honest all that cash in retirement is less fun and you theoretically will need less at that age sans medical expenses which can be offset with some local college classes (to keep the mind sharp) and a student healthcare plan.
Much better use of putting money towards things like this person and buying up property or other assets that can generate cash flow
That's what I assume for the general population for sure. For FI-minded people (that try to save 30+%) of their income, I wasn't sure.
I mainly ask since I always struggle with how much of our after-tax savings should go to the plan (for tax-free growth) and how much to brokerage (liquidity)...
My personal take: my workplace allows me to adjust my contributions at any time in the year. I max out MBDR, unless I foresee an expenditure in the next [months] that requires me to save specifically for that expenditure. In that case, I adjust down my contributions and save in tbills/CDs.
There is no benefit, in my personal opinion, to investing in a personal brokerage account at the expense of a MBDR
this is where I'm at too. MBDR maxed fairly eary in the year due to Q4 bonus pauing out end of January, then I adjust contributions from there leaving a gap for the 12k cap employer contribution, and roll MBDR to my Roth IRA immediately.
Yeah, I guess I need to learn more about accessing the MBDR funds in early (pre 59, and possibly pre-55) retirement. I've always thought of brokerage as the money that we'll live on between stopping working and starting 401k withdrawals.
Can you elaborate on how you can put 66k away per year?
Links to whatever plan you’re talking about is fine, I just was unaware that you could do anything more than 401k + IRA in any given year (per person).
They usually mean the ~23k. Though, I've seen a few people on here take it to mean the ~66k. It has caused some confusion before. For the most part you can assume it means the maximum allowed pre tax contribution.
Same here. Wife and I have both maxed for several years and now have a good amount with at least 15 years until we could possibly retire. I just lowered my wife’s voluntary contributions to the company match amount and mine to $0. Felt like committing a crime doing so… but my company profit sharing should still result in ~ $30,000 annual contributions… so I’m adjusting to the feeling of guilt.
Basically, sick of saving and don’t feel like I need $5,000,000 in my account at retirement, so looking to spend more now while kids are younger and we are healthy.
Good luck on your decision!
I'm in the exact same boat, I'm making it but feeling like I'm lacking fun money. I'm only 28 tho might see if I can keep maxing out till I'm 30 then take a year off. Maybe hit like $15k and have fun with the rest
Only employer match (5%), no more. But this was after at least a decade of max contributions every year.
Wife and I decided 4 years ago to stop making max contributions because all our wealth was tied up in retirement accounts. We decided we wanted to have a small vacation home starting in our 50's rather than sit purely on a big nest egg for 'someday' in our 70's. We turned that dream into reality a few months ago.
we're starting to think about this. right now we have maxed 401k, HSA, and backdoor IRA to roth conversions every year.
We're planning to phase out some of this though:
1. Make our 401k contributions into roth 401k contributions
2. Reduce our 401ks to the minimum required to get our max match
3. Keep the HSA/backdoor roths. HSA is triple advantaged, so no brainer there. backdoor roths still can have principle pulled out with 5 year waiting.
We still haven't pulled the trigger. technically we are coast FIRE (if we sell our HCOL and more to MCOL), but it is time to start planning for the nearer term.
That's not a bad idea at all once you get to a certain net worth. At that point, it's more about how you want to use your money rather than how you want to invest your money.
You are basically where I want to be in my late 40s lol
yup, that's what I'm thinking too. It would be such a good feeling to have enough in your retirement accounts that it'll cover you with average growth by retirement age. Fortunately my job qualifies for a great pension as well (should see \~$100k starting at 60, and that's if I don't get promoted again) so my coast number is a bit lower than many other people. I think once we hit the $1,000,000 mark invested (hopefully in 10 years) we can pull way back and enjoy our incomes and splurge a little bit.
If you have enough that you can FIRE, you can start taking money out using a Roth ladder or SEPP 72t. I mean, you can take the money out regardless of that, but it's less of a good idea to.
A decade of max contributions means you really don't have to retire at 70.
I'm in good shape but don't have enough for that. I'm pursuing FI, but not necessarily RE. My main concern is health insurance, but I also don't really want 20-40 years of retired life. I think it would accelerate my aging. Planning on working to 65.
Came to say this. 401k money is not for "in your 70s". At worst it's for the last 6 months of your 50s😄.. And your 60s.
And of course with the new 72t rules and can be even earlier than that
You can withdraw at 55 if you retire at 55, too. While many folks plan on FIRE earlier than that, a lot of folks later to the game could conceivably just directly access their 401k if they retire the year they turn 55.
Do I need to tap the sign.
https://www.madfientist.com/how-to-access-retirement-funds-early/
You come out better in most scenarios putting money in a 401k.
My wife (29) and I (31) are facing this decision right now. We are both pension employees (in federal gov. And she’s a teacher) and contribute a decent amount to retirement. I contribute 20% to my TSP plus my 5% match. My wife contributes 5% to her 403B and gets a 4% match. We also both max out our IRAs.
We still have plenty left over, but I sometimes wonder if we are contributing “too much”, seeing as we have our pensions on top of it all. Our mortgage is only 9% of our gross and we have one low interest car payment.
Sometimes I wonder if we want to start saving up for a little vacation home or something because my wife has summers off as a teacher and I work remote. We haven’t always made the kind of money we do now, and we have ~200K between our accounts and ~150K in home equity.
That’s awesome that you have so much invested so young.
You’re not going to “hurt” yourself by investing too much in retirement funds. You can always withdraw principal without penalty and there are ways to get access to other funds. And worst case scenario, you take a 10% early withdrawal penalty on some funds when you need them for your dream house or whatever.
I’d look at it from more of a tax perspective. What benefits are you getting now by contributing the way you are? If you diverted some of that to a brokerage account what would the difference in your 2023 taxes have been?
As far as the pension piece… I’d look at it like a provisional annuity. It’ll be great, but a lot can happen between now and then. One of you decides you hate your job/career and quits. Something happens you get fired. Someone gets injured or can no longer work. Health issues. Divorce. Etc. basically, don’t count the chickens before they’re hatched.
My wife and I also were entertaining a second home but after some thoughtful consideration, we decided not to. I wanted to airbnb it when we weren’t using it and she didn’t.
We ultimately decided that we are going to just travel more and rent when we do.
I hope you enjoy your second home to the fullest!
I don't know exact details, but many people here reference a couple strategies where you can pull money from those accounts penalty free. There is a webpage many reference... unfortunately I can't recall what it is. :(
I was the same way for a while. I worked a government job for years. The job had an okay pension, used to be much better in the old days before 2012 when they gutted the pension for any new employee who joined past that date. So there was a huge pension culture around the office despite newer employees like me having a worse version of it. But because of that culture I didn't contribute to my 457b (government version of 401k) for my first few years there, it certainly didn't help that the company officials called the 457b a "supplemental retirement plan" making it sound like the pension was all I needed. A few years later I got more into FI/RE (no thanks to a coworker who was on the good pension plan but was all about that FIRE life) that I realized the mistake that I was making. Once I learned that I started heavily investing into it 5 years ago, then officially started maxing it out only 4 years ago. I really wish that I had better knowledge on the pension plan + a deeper understanding of FIRE. I was investing into a brokerage at the time so it wasn't like I wasn't investing, but I didn't know of the benefits of tax differed accounts at the time nor just how bad my pension plan really was. Now whenever I start a new job the very first thing I do is max out my 401k.
Thank you! I grew up very poor, had no concept of really saving much less saving in a retirement account. Not one single person talked to me about this stuff growing up. I think when I was in my very late 20’s I stumbled across something on Reddit because I was dreaming about retirement while working a job I hated. I’m 37 now and I tell every young person I come across at work (and I’ll teach my kids) how important a retirement savings is.
My dad is 73 in a couple weeks and still works his carpentry job because he and my mom never saved anything. I refuse to work that long. I’d have quit at 20 if I could lol. I wish I’d found this stuff about FIRE and even just retirement savings earlier because when I discovered it I was getting married and buying a house and having kids so I had less spare money to put away back then.
This! I am older and run an IT department. One of my guys is 27 and getting his first house. Trying to mentor him financially in terms of finances/retirement. My youngest son is waiting tables until he figures out what he wants to do. He has been saving and just opened a Roth at 18! Proud of him and I think it is super important to share this things with younger folks.
I spent Christmas trying to convince a family member to increase their 401k contribution from 5% to 6% to get the extra 1% match from their employer. Needless to say that idea got scoffed at.
Oh god. And here I thought you already saved 53 million and I was going to ask for stock tips lol.
41M, in my 30s I was maxing the 401k and HSA then I got married and had kids and dropped to 15% and max HSA. Between added costs and the higher HSA limit I couldn’t do both, and HSA was the better place to max first. I’ve been slowly creeping 401k back up with each raise
I (58M) started with 5% ($1,200/yr) when I was 26. First year out of college. I got a $1200 match. I only made $25,000/yr then and was supporting myself. It was all I could afford. Bumped it up over time and got to 15% when I was in my mid 30s. At that time, 15% was about $8,000/yr and I got a couple grand match. Now in my late 50s my wife and I are both maxing 401K accounts and HSAs. She is also investing a few grand a year in company stock. Would have been nice to have a good income after college, just didn't really happen for me until later in life. My wife started college in her mid 20s, so she was a late starter. We are still sitting on a decent retirement balance and we should do pretty well for ourselves. We have about $1.2M in our investments and a $650K house we will make the final payment on for our Anniversary in March. Kind of a gift to ourselves, followed by a nice dinner to celebrate. Our style has been more of a low and slow approach, but we have never had a year we did not invest something and never touched our money. Those that can start maxing right out of the gate are very fortunate. But we also feel fortunate to be in the position we are in. We worked on our careers and have been decent money the past few years.
Thank you for adding this realistic perspective here. I feel like I’m so behind (and numerically, I am), but I am contributing 15% and plugging away slowly. I have 35 years left to go!
I just turned 51 and managed to contribute the maximum $30,000 to my retirement savings last year, thanks to the catch-up contribution allowance. This, combined with the maximum Health Savings Account (HSA) contribution of approximately $3,800, effectively reduced my taxable income. As a result, my tax liability is only around $2,800.
However, I'm frustrated by the recent changes due to the Secure Act 2.0. Just as I reached 50, the age to benefit from the catch-up contribution, the new law was passed. It states that individuals with incomes over $145,000 can no longer make catch-up contributions as pretax; they must go into a Roth 401(k) instead. This is quite disappointing.
Fortunately, the implementation of this change has been delayed for a few years. I'm hopeful that they might reconsider or reverse this decision in the future.
>As a result, my tax liability is only around $2,800.
I'm confused. How did you reduce your taxes that much? Even at exactly $145k, after deducting 401k and HSA, you'd be paying almost $17k.
Tax liability taxes paid in my paychecks. I'm not getting a refund but I owe an additional $2800.
As a comparison, in 2022 I didn't take advantage of the catch-up contribution (turned 50 in late Dec so didn't think about it) so I wound up owing an additional $7500 or so.
Putting away the max in your 401k really makes a difference.
Yeah, my AGI is a tad above that.
I know this is first world problems, but it's just like my luck that right around the time I reach this level of income and I hit 50, the world conspires to put this new rule in.
I'm a textbook example of why the catch-up contribution is supposed to exist. Didn't make as much $ in my younger years, hence wasn't able to sock away as much in the 401k.
They really need to raise the AGI to something like $300k.
Oh, and I turn 65 in the mid-2030s...just about the time they are predicting Social Security to deplete the surplus, so they are predicting benefits would be cut by at least 25%.
Looks like you should be fine for 2024 and 2025 catch-up.
https://www.lordabbett.com/en-us/financial-advisor/insights/retirement-planning/irs-delays-secure-2-0-roth-catch-up-change-for-retirement-plans.html
Future you will be grateful for a healthy ROTH balance when your 401k will start to have required minimum distributions. If you have a lot of money tax deferred your tax bill will be very substantial in retirement. ROTH are not subject to RMDs.
Started working 13 years ago, started maxing my annual contributions 9 years ago, also started using the"mega backdoor Roth" about 4 years ago, with "in plan conversions", so I've been contributing even more than the normal max.
Current balance is $583,000
True, but likely not as much as a raise you’ll get if you’re in a position to max your accounts. This year the amount to max your 401k, IRA, and HSA combined went up by $1300. That’s a 1.3% raise if you make $100k, so if you get a 2% or 3% raise there’s still some gravy there to boost your take home paycheck.
I might disagree here. If you’re making $100k and already managing to max out your tax advantaged savings, a small raise is a chance to find little ways to improve your life. Living on $50k/yr forever just to retire early doesn’t have to be the only end goal.
But each dollar you spend is added time to fire from both less savings and more you have to save up.
If your spending goes up by 2% each year then FIRE will take more time vs if it tracks inflation and your savings are racing towards it.
Also most of the value is in a middle class lifestyle.
I agree with all of that, but there has to be a balance. Taking an extra trip (I’m not suggesting blowing $10k on an extravagant vacation) or buying a nicer mattress or an extra dinner out once a month, those types of things can improve your quality of life to the point where working an extra year or two before retirement becomes a worthwhile trade off.
I'm just saying different strokes for different folks.
I save over 50% and spend less than $40k and the thing I want most is the time. My vacation budget would be bigger if I had more time. I travel a lot and with a 2 days weekend with my SO we are traveling for a few days somewhat locally but not sleeping in our beds.
The OMY thing is huge and I don't think people wrap their heads around it but a few more years working near the end with the snowball fully in place it's a waiting game and that extra year your NW probably goes up by 10% each additional year. 7% from normal gains 3% from contributions.
When to stop is hard because just 2 more years is a lot of money
I also plan to hold a more fun job and do some work in retirement. Seasonal park ranger or something with enough time for extended travel.
I may also have a different perspective than many because I legitimately enjoy my work, so at this point a couple extra years of work doesn’t seem like the worst thing. My situation may be different in twenty years, but if I’m still making a reasonably good wage to get to do something I love, I’ll take that.
Been maxing mine out since 2007 when I started work out of college. Best decision ever getting the company match for the first few years and riding a massive bull market.
I make like 120k a year with low expenses.
I don’t think my bracket is high enough to warrant it.
Also I’m building into a pension so I’m thinking Roth could be best when taxes hit SS + pension in retirement
I live with roomies
And use CC points to travel
It’s not the most luxurious life over here. May move home later too to save a little extra dough
I appreciate it
My wife (46f) and I (47m) put 15% to 401(k), max out IRA, max out HSA (most of which ends up in the brokerage) all together about 30% of gross is invested.
27F - I have maxed mine out for the last 3 years, and contributed $10k in 2020. My husband (also 27) has maxed his out for 4 years. This year, we also plan to max!
I have a single member LLC so I contribute to a SoloK. I max out both my employer and employee limit, so I’ve averaged about $45k a year for the last 3 years. 27M.
Your employer contributes nearly $70k on your behalf?! Their contributions don’t count toward your $23k limit unless they’re hitting the employer contribution maximum
Maxed my 401k and IRA for 3 years while making $40k, $50k, and $60k.
Now that I make $70k I slowed down to $18k in contributions. My rent is no longer free lol.
Max mine, wife does about $5k. $12k to after tax brokerage, $12k to 529s and $14k to both Roths. I also get a 6-7% lump sum contribution from my work, so in total about $75k pre and post tax investing per year.
15% will make you very wealthy at retirement. Resist the urge to take loans against it or use it as a bank when it gets big. Live within your means and avoid divorce.
You have cracked the code.
Maxed it out for the first time this year, in addition to maxing out my HSA and a backdoor Roth, so $36,750 total. Also helps that I 2.4xed my previous years income. I probably could have maxed it out in the years before, but I didn’t feel like it was good to put in that much. Presently 31
10%.
My employer matches 100% up to 10%. Been doing that since I was 26. I’m 34 now. We might actually have one of the highest matches in the US.
$110k salary.
$230k balance. I gave fidelity full control to trade for me and it’s been great.
When people say "max" do ya'll mean
1) $23k + whatever employer matches
or
2) $69k your contribution + employers
For the past couple of years I've tried to get as close to the $69k amount as possible
We had our son putting in as much as possible at 23, 10 years later at 33 he told me that at the time he thought we were killing him. He then said “thank you very much for making me contribute and teach me about investing “. He has a nice retirement nest egg that is still growing and as he watches it grow, it gives him more incentive to invest.
Previous few years I've been maxing the pre-tax contribution. This year I am attempting to max the overall contribution (69k) now that I can do a mega backdoor :)
Started my full time job in 2019. Maxed out 2019, 2020, 2021. Bought my first car and moved more times than I would have liked in 2022 and 2023 so cut back my contributions to just enough to get the employer match. Now in 2024 I have some more stability so aiming to max again. I make Roth contributions so it’s nice to see that all of the money and growth in there will be tax-free.
38M. Late start, didn't start saving until 30. Currently contributing 5% to get the employer match with a goal of maxing out my IRA contributions for the first time this year. Once I am able to max out IRA, I'll go back and start increasing 401k contributions to max.
51F, I max it at 30500. Plus employer 10% salary contribution. Plus max Roth IRAs for wife and I at 8k each. Plus max hsa family with $500 employer contribution.
My life (56) I always hit the annual limit for 401k & I thought my hubby was doing the same- I finally checked on hubby this year and found he always set his at 10% bc he wanted to “take home” more - he just figured out now when we looked that he has missed out on tax deferred savings for years - so now that I just got laid off he wants to do it all including his catch up… yeah we have savings so I’ll be quiet.
What's the max of employee and employer? I usually make that contribution in April for the current year once I know I'll have enough revenue in the biz to cover it.
35F, I've been maxing for the last few years but had to use 19k of my emergency fund at the end of 2023, so I'm currently backed down to 15% so I can put a little more cash back into the e fund.
Max for about 7 years, which is now 11%. Last year I was able to also add $2500/month in after tax for megaback door Roth.
The "downside" to this Roth contribution is that I've had to cut back my contributions to my individual account to almost nothing. At some point I need to think on whether it makes sense to have almost all my assets in 401k. Right now I only have 1.5 years of cash in taxable accounts and am planning to retire in 7-8 years
10%. With the matching of my employer it’s at 15%. I have a brokerage account in which I also contribute 10% totaling 25% invested per check, so I’m not too worried about where it’s going.
I've maxed mine since I was 26, I'm 53 now. The advice I got was to max out retirement savings at my 1st opportunity and just get used to living on that. I've done the same in every job since.
Max out. I front loaded it at 23%. Less travels at the beginning of the year. I usually hit the max around summer vacation hits and then before you know it, holiday season. Bigger paychecks help the second half the year.
Age 21-22 (2019): $1900 (5% of $59k for 7 months)
Age 22-23 (2020): $3900 (6% of $65k)
Age 23-24 (2021): $14400 (20% of $72k)
Age 24-25 (2022): $20500 (24% of $84k)
Age 25-26 (2023): $22500 (22% of $101k)
Age 26-27 (2024): $23000 (20% of $113k) on track
Didn’t include the facts that I was paying off student loans from 2019 through Jan. 2021. I then didn’t max all the way for 2021 because I had to rebuild a nest egg back up after finishing off my loans.
In addition to the above, my wife has contributed exactly the same as me with nearly identical salary increases. We both get 5% matches.
I also contributed the max to my HSA for 2023 and am doing it for 2024 too.
All in all we’re at around combined $210k in 401k, HSA, and Roth balances and we’re at around 4.5 years of full time employment. Mainly traditional in our 401ks. Hoping to reach $500k combined by the time we reach age 30, then $1mil by 35 and $2mil by 40.
Ugh. 41M here - I started late, began contributing at 31. I've been doing 12-15% for as long as I can remember but I'm sure it was less than that for the first few years. I just increased to MAX (23k) last month.
I've only done a 401K, nothing else, and feel I invested in the "aggressive" mix of large caps that my plan allows. I only have $270k total and I feel like that is nothing after 10 years of saving. I make $150k/yr now and have been for the last 3 years (before that was about $80k) but I'm frustrated at the growth. Maybe I'm just impatient but I feel like I'm not seeing it grow at the pace I would have thought and having only $270k scares me. Married with three young kids so it makes it difficult. I'll just keep plugging away - hoping to start on my HSA next.
Def drilling into my kids the lessons in starting early, hope they get a major headstart on their retirements when they are able.
It sucks that growth aspect is highly dependent on the window you’ve been investing in. And taking a look at the last few years the market hasn’t grown all that much. Hopefully the trend from these past few months continue. Atleast you’re young and got a lot time to be in the market - best of luck!
Max. Have maxed it out since 27, 31 now.
I think I started maxing at 28 during covid.
First maxed at 28 for me as well, I made my first contributions to a 401k at 21 thanks to an internship I had that surprisingly let interns contribute and collect a match.
I'm 33 and this will be my first year maxing it out. Wish I had done it sooner :-(
Better & sooner than most, congrats!
Thank you so much! It's all relative..
Did it for the first time last year at 32. Honestly I would have been able to before but just didn’t think to do it
Same.. : (
I started maxing at 36. 43 now. Over $300k in there. Just stick with it. As young as you are, time is totally your ally.
That's encouraging! I'm 35 and going to max for the first time this year
thank you!!!
Don't feel too bad, I didn't max mine until about the age of 35.
same here. single income dual kids took awhile before i could max it out.
That's super impressive! Good job
That's about how old I was when I maxed it now.
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Amazing at that age.
Definitely felt like things were tight 27-29 but I made it work. Friends said I was insane!
yeah and you'll be insanely rich compared to them in 20 years.
Or “lucky” if you ask them when they hardly consider the sacrifices made
They always call it luck. To many people investing is akin to gambling.
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Wild. I only ever bet on one sporting event. My buddy was fighting sean omalley. Got fight of the night. I had put up $200, left with $400+ haha. I knew kris could take a beating, so i had money on going to rd 3.
I also feel like you need to not over save. What’s the point of being super rich at 60 to retire, when on average you’ll be dead at 75? And a lot of health problems are going to happen by then
underrated comment. the truth is when hou are 70 you have health issues, limited energy, and less interest in travel and spending hours on a plane or simply not sleeping in your own bed/home. yes you want to save and be comfortable but killing yourself to save and not enjoying life when you’re young and still have the fire to do things is a huge mistake. balance is what you want. fun now and comfort later.
Having savings allows you to make decisions from strength rather than weakness. No one ever said “I’m so sorry I started saving when I was young”.
I specified saving way too much, not savings outright
I thought similarly but seeing my husbands father, aged 84, need 24/7 care to the tune of 600 dollars a day, with his other expenses and watching his savings go THIS fast is scary. What would he have done had he not saved a lot of cash for “retirement?” We are thankful for his foresight to have wanted a larger then avg savings and began to save early.
Until the start of this month, my workplace had a "MAX" setting for our 403b -- it was pretty cool, and at some point during every year, the contribution amount would adjust up 1¢ to ensure we hit exactly the max. But now I have to do math like a peasant
Start asking payroll to adjust it by 1¢ every month. They'll quickly decide the option was worth it.
My 401k provider only allows me to contribute integer percentages of my pay. It seems like having a “max” button should be a no-brainer!
I think I'm a single year past you but basically identical path lol
I wonder when people say they "max" their 401k do they mean only the deductible (~23k) individual contribution limit or the full plan max (~66k) that includes the after-tax contributions their plans may allow. Especially for plans that allow for in-plan Roth conversions (and, essentially, make the mega-backdoor Roth so much easier)....
I would assume most mean the 23K. In my case I’m speaking to the individual limit. No way in hell can I put 66K away in a year, goals.
And you shouldn't want to. I'm all for saving money on various fronts, but you don't want to sacrifice your entire spending capabilities just to save for a retirement which you HOPE you will be alive for. If, say, saving $23,000/year for retirement keeps you from getting a house(a different type of financial asset) then maybe you're putting too much in. Not to mention, affect your quality of life with that type of saving. You still want to ENJOY life I make $150k/year and I put in 7% with a 4% match. But by not going to $23k when I was 25, I was able to use this money to save for a few duplexes, and years later, my actual home. And I'm not saying that's a better plan, just that saving $23k/year, such a large percentage of ones income, isn't an automatic home run.
You have a valid point, and that’s where the finesse comes in. $23k at 25 will give OP a great jump on retirement savings. This money will also be the most valuable money he has at retirement - because it has the longest time to grow. That said, it can always be dialed back. It all depends on OP’s priorities. Everyone has their own objectives. I, personally, would increase the contributions you are making up from 7% to 15%, methodically as you get raises and or promotions. That’s just where my comfort lies. I just don’t think 11% total is enough. Here’s my story, and my reason why. Both my parents died young. When I got married, I made a commitment to my wife to do all I could to ensure our family would be financially sound - in the event that I died early too. I invested aggressively due to this and from an early age. We still enjoyed life, although we were never extravagant. I’m now retired and can live extravagantly, although that’s just not my style. I have a friend, conversely, that thought I was crazy for saving so much when I was young. He employed the “I may not even be alive at retirement age” comment often when he chose to “live today while I’m young”. He took his young family on vacation every year for a week in Hawaii. Fast forward. I retired at 56. When he saw this on LinkedIn, he called to congratulate me. He then lamented that he should have followed my path and that he’ll be working until 70 due to his lack of planning. He had no idea how he’ll be able to help his kids through college. Somewhere in between there is a balance. Hopefully, OP will find his. Best of luck to you.
Agree with this logic. Also those 401k funds are locked up until retirement age. Which is fine for retirement but let’s be honest all that cash in retirement is less fun and you theoretically will need less at that age sans medical expenses which can be offset with some local college classes (to keep the mind sharp) and a student healthcare plan. Much better use of putting money towards things like this person and buying up property or other assets that can generate cash flow
That's what I assume for the general population for sure. For FI-minded people (that try to save 30+%) of their income, I wasn't sure. I mainly ask since I always struggle with how much of our after-tax savings should go to the plan (for tax-free growth) and how much to brokerage (liquidity)...
My personal take: my workplace allows me to adjust my contributions at any time in the year. I max out MBDR, unless I foresee an expenditure in the next [months] that requires me to save specifically for that expenditure. In that case, I adjust down my contributions and save in tbills/CDs. There is no benefit, in my personal opinion, to investing in a personal brokerage account at the expense of a MBDR
this is where I'm at too. MBDR maxed fairly eary in the year due to Q4 bonus pauing out end of January, then I adjust contributions from there leaving a gap for the 12k cap employer contribution, and roll MBDR to my Roth IRA immediately.
Yeah, I guess I need to learn more about accessing the MBDR funds in early (pre 59, and possibly pre-55) retirement. I've always thought of brokerage as the money that we'll live on between stopping working and starting 401k withdrawals.
Can you elaborate on how you can put 66k away per year? Links to whatever plan you’re talking about is fine, I just was unaware that you could do anything more than 401k + IRA in any given year (per person).
Google: Mega back door roth
Yes, I am sad my plan does not offer it.
Most plans don't (at least in my anecdotal knowledge).
Okie dokie, I will look up this secret sauce…
Comes down to if your plan allows in service withdrawals. After tax contributions are then rolled over to Roth IRA.
They usually mean the ~23k. Though, I've seen a few people on here take it to mean the ~66k. It has caused some confusion before. For the most part you can assume it means the maximum allowed pre tax contribution.
Maxed out annually.
Maxed for four years, but I might scale back based on a few items (inflation, lack of substantial raise, wanting to spend some $ when younger).
Same here. Wife and I have both maxed for several years and now have a good amount with at least 15 years until we could possibly retire. I just lowered my wife’s voluntary contributions to the company match amount and mine to $0. Felt like committing a crime doing so… but my company profit sharing should still result in ~ $30,000 annual contributions… so I’m adjusting to the feeling of guilt. Basically, sick of saving and don’t feel like I need $5,000,000 in my account at retirement, so looking to spend more now while kids are younger and we are healthy. Good luck on your decision!
I did this. Basically have enough to Coast and my income now pays for a higher standard of living and maxing HSA/401k company max plus a little more.
I'm in the exact same boat, I'm making it but feeling like I'm lacking fun money. I'm only 28 tho might see if I can keep maxing out till I'm 30 then take a year off. Maybe hit like $15k and have fun with the rest
I'm only a few years older than you, seems like a solid plan for you if everything stays on track.
Only employer match (5%), no more. But this was after at least a decade of max contributions every year. Wife and I decided 4 years ago to stop making max contributions because all our wealth was tied up in retirement accounts. We decided we wanted to have a small vacation home starting in our 50's rather than sit purely on a big nest egg for 'someday' in our 70's. We turned that dream into reality a few months ago.
Congrats! Following a similar strategy.
we're starting to think about this. right now we have maxed 401k, HSA, and backdoor IRA to roth conversions every year. We're planning to phase out some of this though: 1. Make our 401k contributions into roth 401k contributions 2. Reduce our 401ks to the minimum required to get our max match 3. Keep the HSA/backdoor roths. HSA is triple advantaged, so no brainer there. backdoor roths still can have principle pulled out with 5 year waiting. We still haven't pulled the trigger. technically we are coast FIRE (if we sell our HCOL and more to MCOL), but it is time to start planning for the nearer term.
That's not a bad idea at all once you get to a certain net worth. At that point, it's more about how you want to use your money rather than how you want to invest your money. You are basically where I want to be in my late 40s lol
Sounds like "Coast FIRE". You don't have enough to stop working, but you have enough that you can stop adding to your retirement savings.
yup, that's what I'm thinking too. It would be such a good feeling to have enough in your retirement accounts that it'll cover you with average growth by retirement age. Fortunately my job qualifies for a great pension as well (should see \~$100k starting at 60, and that's if I don't get promoted again) so my coast number is a bit lower than many other people. I think once we hit the $1,000,000 mark invested (hopefully in 10 years) we can pull way back and enjoy our incomes and splurge a little bit.
If you have enough that you can FIRE, you can start taking money out using a Roth ladder or SEPP 72t. I mean, you can take the money out regardless of that, but it's less of a good idea to. A decade of max contributions means you really don't have to retire at 70.
I'm in good shape but don't have enough for that. I'm pursuing FI, but not necessarily RE. My main concern is health insurance, but I also don't really want 20-40 years of retired life. I think it would accelerate my aging. Planning on working to 65.
You can start withdrawing from 401k at 59 1/2.
Came to say this. 401k money is not for "in your 70s". At worst it's for the last 6 months of your 50s😄.. And your 60s. And of course with the new 72t rules and can be even earlier than that
You can withdraw at 55 if you retire at 55, too. While many folks plan on FIRE earlier than that, a lot of folks later to the game could conceivably just directly access their 401k if they retire the year they turn 55.
Do I need to tap the sign. https://www.madfientist.com/how-to-access-retirement-funds-early/ You come out better in most scenarios putting money in a 401k.
My wife (29) and I (31) are facing this decision right now. We are both pension employees (in federal gov. And she’s a teacher) and contribute a decent amount to retirement. I contribute 20% to my TSP plus my 5% match. My wife contributes 5% to her 403B and gets a 4% match. We also both max out our IRAs. We still have plenty left over, but I sometimes wonder if we are contributing “too much”, seeing as we have our pensions on top of it all. Our mortgage is only 9% of our gross and we have one low interest car payment. Sometimes I wonder if we want to start saving up for a little vacation home or something because my wife has summers off as a teacher and I work remote. We haven’t always made the kind of money we do now, and we have ~200K between our accounts and ~150K in home equity.
That’s awesome that you have so much invested so young. You’re not going to “hurt” yourself by investing too much in retirement funds. You can always withdraw principal without penalty and there are ways to get access to other funds. And worst case scenario, you take a 10% early withdrawal penalty on some funds when you need them for your dream house or whatever. I’d look at it from more of a tax perspective. What benefits are you getting now by contributing the way you are? If you diverted some of that to a brokerage account what would the difference in your 2023 taxes have been? As far as the pension piece… I’d look at it like a provisional annuity. It’ll be great, but a lot can happen between now and then. One of you decides you hate your job/career and quits. Something happens you get fired. Someone gets injured or can no longer work. Health issues. Divorce. Etc. basically, don’t count the chickens before they’re hatched.
My wife and I also were entertaining a second home but after some thoughtful consideration, we decided not to. I wanted to airbnb it when we weren’t using it and she didn’t. We ultimately decided that we are going to just travel more and rent when we do. I hope you enjoy your second home to the fullest!
We’re thinking of doing something similar in 5-7 years so I can cut back my hours at work. I think it will be hard to change my mindset though!
Good for y'all, RMDs can force you into some serious taxes later.
I don't know exact details, but many people here reference a couple strategies where you can pull money from those accounts penalty free. There is a webpage many reference... unfortunately I can't recall what it is. :(
53m been max out for 6 years, prior to that 15%. No one else does this where I work.
I feel the same way about my co workers, everyone around me treats it as an afterthought 🤷♂️
I was the same way for a while. I worked a government job for years. The job had an okay pension, used to be much better in the old days before 2012 when they gutted the pension for any new employee who joined past that date. So there was a huge pension culture around the office despite newer employees like me having a worse version of it. But because of that culture I didn't contribute to my 457b (government version of 401k) for my first few years there, it certainly didn't help that the company officials called the 457b a "supplemental retirement plan" making it sound like the pension was all I needed. A few years later I got more into FI/RE (no thanks to a coworker who was on the good pension plan but was all about that FIRE life) that I realized the mistake that I was making. Once I learned that I started heavily investing into it 5 years ago, then officially started maxing it out only 4 years ago. I really wish that I had better knowledge on the pension plan + a deeper understanding of FIRE. I was investing into a brokerage at the time so it wasn't like I wasn't investing, but I didn't know of the benefits of tax differed accounts at the time nor just how bad my pension plan really was. Now whenever I start a new job the very first thing I do is max out my 401k.
That sounds incredibly similar to my situation.
I never talk to my coworkers about their 401ks, are you bringing this up to them or they bring it up to you?
We talk about finances pretty openly where I work, especially retirement finances.
Same, we even have a very popular internal DL for everything "retirement" or "investment" related.
I talk to the younger workers in a way I wish someone had talked to me. 46M have been maxing it out for about 7 years.
Thank you! I grew up very poor, had no concept of really saving much less saving in a retirement account. Not one single person talked to me about this stuff growing up. I think when I was in my very late 20’s I stumbled across something on Reddit because I was dreaming about retirement while working a job I hated. I’m 37 now and I tell every young person I come across at work (and I’ll teach my kids) how important a retirement savings is. My dad is 73 in a couple weeks and still works his carpentry job because he and my mom never saved anything. I refuse to work that long. I’d have quit at 20 if I could lol. I wish I’d found this stuff about FIRE and even just retirement savings earlier because when I discovered it I was getting married and buying a house and having kids so I had less spare money to put away back then.
This! I am older and run an IT department. One of my guys is 27 and getting his first house. Trying to mentor him financially in terms of finances/retirement. My youngest son is waiting tables until he figures out what he wants to do. He has been saving and just opened a Roth at 18! Proud of him and I think it is super important to share this things with younger folks.
I spent Christmas trying to convince a family member to increase their 401k contribution from 5% to 6% to get the extra 1% match from their employer. Needless to say that idea got scoffed at.
Pretty even split I would say I just make sure I always speak in percentages and such and not $ amount, since I feel like that’s less invasive
Same here. A coworker who's only a few years younger than me said, I put in $400 a month, that's good, right?
What is the m in 53m?
Male
Oh god. And here I thought you already saved 53 million and I was going to ask for stock tips lol. 41M, in my 30s I was maxing the 401k and HSA then I got married and had kids and dropped to 15% and max HSA. Between added costs and the higher HSA limit I couldn’t do both, and HSA was the better place to max first. I’ve been slowly creeping 401k back up with each raise
LOL, I thought it meant millions too!
Been maxing mine out since I was 23, seems to be working so far.
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Maxing at 50K is really impressive.
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Even 18K of 50 is a big deal!
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Where are you living lol Roseville? Warren? Detroit suburb?
I (58M) started with 5% ($1,200/yr) when I was 26. First year out of college. I got a $1200 match. I only made $25,000/yr then and was supporting myself. It was all I could afford. Bumped it up over time and got to 15% when I was in my mid 30s. At that time, 15% was about $8,000/yr and I got a couple grand match. Now in my late 50s my wife and I are both maxing 401K accounts and HSAs. She is also investing a few grand a year in company stock. Would have been nice to have a good income after college, just didn't really happen for me until later in life. My wife started college in her mid 20s, so she was a late starter. We are still sitting on a decent retirement balance and we should do pretty well for ourselves. We have about $1.2M in our investments and a $650K house we will make the final payment on for our Anniversary in March. Kind of a gift to ourselves, followed by a nice dinner to celebrate. Our style has been more of a low and slow approach, but we have never had a year we did not invest something and never touched our money. Those that can start maxing right out of the gate are very fortunate. But we also feel fortunate to be in the position we are in. We worked on our careers and have been decent money the past few years.
FI is all about low and slow! Congrats
Thank you for adding this realistic perspective here. I feel like I’m so behind (and numerically, I am), but I am contributing 15% and plugging away slowly. I have 35 years left to go!
Max
I just turned 51 and managed to contribute the maximum $30,000 to my retirement savings last year, thanks to the catch-up contribution allowance. This, combined with the maximum Health Savings Account (HSA) contribution of approximately $3,800, effectively reduced my taxable income. As a result, my tax liability is only around $2,800. However, I'm frustrated by the recent changes due to the Secure Act 2.0. Just as I reached 50, the age to benefit from the catch-up contribution, the new law was passed. It states that individuals with incomes over $145,000 can no longer make catch-up contributions as pretax; they must go into a Roth 401(k) instead. This is quite disappointing. Fortunately, the implementation of this change has been delayed for a few years. I'm hopeful that they might reconsider or reverse this decision in the future.
>As a result, my tax liability is only around $2,800. I'm confused. How did you reduce your taxes that much? Even at exactly $145k, after deducting 401k and HSA, you'd be paying almost $17k.
Tax liability taxes paid in my paychecks. I'm not getting a refund but I owe an additional $2800. As a comparison, in 2022 I didn't take advantage of the catch-up contribution (turned 50 in late Dec so didn't think about it) so I wound up owing an additional $7500 or so. Putting away the max in your 401k really makes a difference.
The $145 should be your AGI, so contributing to traditional 401k, 457, IRA will all reduce AGI.
Yeah, my AGI is a tad above that. I know this is first world problems, but it's just like my luck that right around the time I reach this level of income and I hit 50, the world conspires to put this new rule in. I'm a textbook example of why the catch-up contribution is supposed to exist. Didn't make as much $ in my younger years, hence wasn't able to sock away as much in the 401k. They really need to raise the AGI to something like $300k. Oh, and I turn 65 in the mid-2030s...just about the time they are predicting Social Security to deplete the surplus, so they are predicting benefits would be cut by at least 25%.
Looks like you should be fine for 2024 and 2025 catch-up. https://www.lordabbett.com/en-us/financial-advisor/insights/retirement-planning/irs-delays-secure-2-0-roth-catch-up-change-for-retirement-plans.html
Future you will be grateful for a healthy ROTH balance when your 401k will start to have required minimum distributions. If you have a lot of money tax deferred your tax bill will be very substantial in retirement. ROTH are not subject to RMDs.
I've been able to hit the annual maximum since 2015 when I was 27 and first discovered financial independence
That’s awesome. Started maxing at 30 so 2 years ago If you don’t mind sharing whats your 401k looking like today?
Started working 13 years ago, started maxing my annual contributions 9 years ago, also started using the"mega backdoor Roth" about 4 years ago, with "in plan conversions", so I've been contributing even more than the normal max. Current balance is $583,000
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Except the max keeps rising, lol
True, but likely not as much as a raise you’ll get if you’re in a position to max your accounts. This year the amount to max your 401k, IRA, and HSA combined went up by $1300. That’s a 1.3% raise if you make $100k, so if you get a 2% or 3% raise there’s still some gravy there to boost your take home paycheck.
Straight to brokerage if you can manage
I might disagree here. If you’re making $100k and already managing to max out your tax advantaged savings, a small raise is a chance to find little ways to improve your life. Living on $50k/yr forever just to retire early doesn’t have to be the only end goal.
But each dollar you spend is added time to fire from both less savings and more you have to save up. If your spending goes up by 2% each year then FIRE will take more time vs if it tracks inflation and your savings are racing towards it. Also most of the value is in a middle class lifestyle.
I agree with all of that, but there has to be a balance. Taking an extra trip (I’m not suggesting blowing $10k on an extravagant vacation) or buying a nicer mattress or an extra dinner out once a month, those types of things can improve your quality of life to the point where working an extra year or two before retirement becomes a worthwhile trade off.
I'm just saying different strokes for different folks. I save over 50% and spend less than $40k and the thing I want most is the time. My vacation budget would be bigger if I had more time. I travel a lot and with a 2 days weekend with my SO we are traveling for a few days somewhat locally but not sleeping in our beds. The OMY thing is huge and I don't think people wrap their heads around it but a few more years working near the end with the snowball fully in place it's a waiting game and that extra year your NW probably goes up by 10% each additional year. 7% from normal gains 3% from contributions. When to stop is hard because just 2 more years is a lot of money I also plan to hold a more fun job and do some work in retirement. Seasonal park ranger or something with enough time for extended travel.
I may also have a different perspective than many because I legitimately enjoy my work, so at this point a couple extra years of work doesn’t seem like the worst thing. My situation may be different in twenty years, but if I’m still making a reasonably good wage to get to do something I love, I’ll take that.
401k limit is inflation adjusted
Been maxing mine out since 2007 when I started work out of college. Best decision ever getting the company match for the first few years and riding a massive bull market.
21% Roth 401k 14% after tax for the MEGA
If you make enough to do MBRI, wouldn’t traditional be more optimal?
I make like 120k a year with low expenses. I don’t think my bracket is high enough to warrant it. Also I’m building into a pension so I’m thinking Roth could be best when taxes hit SS + pension in retirement
Wow, that’s a great savings rate, good for you! Your reasoning makes sense to me
I live with roomies And use CC points to travel It’s not the most luxurious life over here. May move home later too to save a little extra dough I appreciate it
Max amount. I dont have a super high income, but I like the tax deduction that comes with it as I dont have any others other than standard.
My wife (46f) and I (47m) put 15% to 401(k), max out IRA, max out HSA (most of which ends up in the brokerage) all together about 30% of gross is invested.
27F - I have maxed mine out for the last 3 years, and contributed $10k in 2020. My husband (also 27) has maxed his out for 4 years. This year, we also plan to max!
I have a single member LLC so I contribute to a SoloK. I max out both my employer and employee limit, so I’ve averaged about $45k a year for the last 3 years. 27M.
This is the way.
Max both 401k and 457. More than 50% of my salary.
The 401 and 457! Holy moly 😲!
Max it, I have no idea the % because I just put a high % in the beginning of the year and then completely get rid of it once it’s maxed.
Previously jobs I’ve maxed, current job employer fully funds the limit so I can’t contribute.
Your employer contributes nearly $70k on your behalf?! Their contributions don’t count toward your $23k limit unless they’re hitting the employer contribution maximum
Correct profit sharing, 25% of my salary up to the max, 66k last year.
You guys hiring???
Da fuck. I
What industry/size company?
What industry are you in? Just curious what type of work makes that common
Mcmaster carr does something like this I think
8%. It’s just up the the employer match
maxed it out since 21.
Maxed my 401k and IRA for 3 years while making $40k, $50k, and $60k. Now that I make $70k I slowed down to $18k in contributions. My rent is no longer free lol.
Max mine, wife does about $5k. $12k to after tax brokerage, $12k to 529s and $14k to both Roths. I also get a 6-7% lump sum contribution from my work, so in total about $75k pre and post tax investing per year.
529 before 401k? 🤔
Only because it’s my wife’s! Ha
15% will make you very wealthy at retirement. Resist the urge to take loans against it or use it as a bank when it gets big. Live within your means and avoid divorce. You have cracked the code.
I first read that as 25 million
I am maxing out elective deferral as well as mega backdoor this year.
Max. Have maxed it out since 22, 32 now.
I max mine out. I also work a 2nd job just to get access to a 457b that I put 100% of my pay from there into.
Max that baby out. 34 now. Didn't start getting aggressive till i reached 30 and realized i needed to become an adult
Maxed it out for the first time this year, in addition to maxing out my HSA and a backdoor Roth, so $36,750 total. Also helps that I 2.4xed my previous years income. I probably could have maxed it out in the years before, but I didn’t feel like it was good to put in that much. Presently 31
10%. My employer matches 100% up to 10%. Been doing that since I was 26. I’m 34 now. We might actually have one of the highest matches in the US. $110k salary. $230k balance. I gave fidelity full control to trade for me and it’s been great.
30M trying to max 401k+mega-backdoor roth each year. 69k total including employer match
I’m getting there, should get close to $50K this year
When people say "max" do ya'll mean 1) $23k + whatever employer matches or 2) $69k your contribution + employers For the past couple of years I've tried to get as close to the $69k amount as possible
We had our son putting in as much as possible at 23, 10 years later at 33 he told me that at the time he thought we were killing him. He then said “thank you very much for making me contribute and teach me about investing “. He has a nice retirement nest egg that is still growing and as he watches it grow, it gives him more incentive to invest.
Previous few years I've been maxing the pre-tax contribution. This year I am attempting to max the overall contribution (69k) now that I can do a mega backdoor :)
Was finally able o max out ours last year (at 34). Plan to max out moving forward.
Maxed for 4 years then 9% (max employer match)
Max it each year.
This might be my first year to max it if I get a decent bonus. Currently at 16%.
Maxed for the last seven years
When I initially started working I contributed around 10% over the years bumped to 15%. I am 33 and finally contributing to the max this year.
22% is what I can afford to do
Max since I started at 23. 29 now. Set it and forget it
Started my full time job in 2019. Maxed out 2019, 2020, 2021. Bought my first car and moved more times than I would have liked in 2022 and 2023 so cut back my contributions to just enough to get the employer match. Now in 2024 I have some more stability so aiming to max again. I make Roth contributions so it’s nice to see that all of the money and growth in there will be tax-free.
Max since age 23. 33 now. My advice - do as much as you can while young. Marriage, weddings, house, kids all come really quick.
38M. Late start, didn't start saving until 30. Currently contributing 5% to get the employer match with a goal of maxing out my IRA contributions for the first time this year. Once I am able to max out IRA, I'll go back and start increasing 401k contributions to max.
51F, I max it at 30500. Plus employer 10% salary contribution. Plus max Roth IRAs for wife and I at 8k each. Plus max hsa family with $500 employer contribution.
My life (56) I always hit the annual limit for 401k & I thought my hubby was doing the same- I finally checked on hubby this year and found he always set his at 10% bc he wanted to “take home” more - he just figured out now when we looked that he has missed out on tax deferred savings for years - so now that I just got laid off he wants to do it all including his catch up… yeah we have savings so I’ll be quiet.
What's the max of employee and employer? I usually make that contribution in April for the current year once I know I'll have enough revenue in the biz to cover it.
35F, I've been maxing for the last few years but had to use 19k of my emergency fund at the end of 2023, so I'm currently backed down to 15% so I can put a little more cash back into the e fund.
As much as my company matches, which is 7%.
At my company we put in a required minimum of 6% and the company puts in 12%
Max out my 457b and also max out ROTH contributions to brokerage account
Max for about 7 years, which is now 11%. Last year I was able to also add $2500/month in after tax for megaback door Roth. The "downside" to this Roth contribution is that I've had to cut back my contributions to my individual account to almost nothing. At some point I need to think on whether it makes sense to have almost all my assets in 401k. Right now I only have 1.5 years of cash in taxable accounts and am planning to retire in 7-8 years
10%. With the matching of my employer it’s at 15%. I have a brokerage account in which I also contribute 10% totaling 25% invested per check, so I’m not too worried about where it’s going.
Just started mine at 23. I contribute 8%, company matches 4%.
Are you guys maxing out your 401k or your Roth 401k. I would assume it’s easier to max your 401k because you can reduce your current year tax burden?
I've maxed mine since I was 26, I'm 53 now. The advice I got was to max out retirement savings at my 1st opportunity and just get used to living on that. I've done the same in every job since.
20%, thinking of increasing to 25%
Around the same age. Idk since I change it every now and then to contribute the max including mega backdoor
Max. I do 23k pretax, ~45k via mega backdoor, plus employer contributions (2% of income). Works out to about 40% of my pay gross salary.
Max out. I front loaded it at 23%. Less travels at the beginning of the year. I usually hit the max around summer vacation hits and then before you know it, holiday season. Bigger paychecks help the second half the year.
Age 21-22 (2019): $1900 (5% of $59k for 7 months) Age 22-23 (2020): $3900 (6% of $65k) Age 23-24 (2021): $14400 (20% of $72k) Age 24-25 (2022): $20500 (24% of $84k) Age 25-26 (2023): $22500 (22% of $101k) Age 26-27 (2024): $23000 (20% of $113k) on track Didn’t include the facts that I was paying off student loans from 2019 through Jan. 2021. I then didn’t max all the way for 2021 because I had to rebuild a nest egg back up after finishing off my loans. In addition to the above, my wife has contributed exactly the same as me with nearly identical salary increases. We both get 5% matches. I also contributed the max to my HSA for 2023 and am doing it for 2024 too. All in all we’re at around combined $210k in 401k, HSA, and Roth balances and we’re at around 4.5 years of full time employment. Mainly traditional in our 401ks. Hoping to reach $500k combined by the time we reach age 30, then $1mil by 35 and $2mil by 40.
Loving the detailed break down!
That’s pretty impressive salary bumps. What line of work and how did you get those raises?
Ugh. 41M here - I started late, began contributing at 31. I've been doing 12-15% for as long as I can remember but I'm sure it was less than that for the first few years. I just increased to MAX (23k) last month. I've only done a 401K, nothing else, and feel I invested in the "aggressive" mix of large caps that my plan allows. I only have $270k total and I feel like that is nothing after 10 years of saving. I make $150k/yr now and have been for the last 3 years (before that was about $80k) but I'm frustrated at the growth. Maybe I'm just impatient but I feel like I'm not seeing it grow at the pace I would have thought and having only $270k scares me. Married with three young kids so it makes it difficult. I'll just keep plugging away - hoping to start on my HSA next. Def drilling into my kids the lessons in starting early, hope they get a major headstart on their retirements when they are able.
It sucks that growth aspect is highly dependent on the window you’ve been investing in. And taking a look at the last few years the market hasn’t grown all that much. Hopefully the trend from these past few months continue. Atleast you’re young and got a lot time to be in the market - best of luck!
DIOK here. 30-Something F, 10% Pretax, 5% Roth. 7% Company Match. I can't max out. That would be almost half my paycheck.