anyone max out their 401k?

[rh71]

We all know to at least go up to company match, but does anyone go up to the $18k (2015) limit? Compounding interest until retirement is huge.

We're in the middle of a mortgage refinance to a lower rate to save maybe $20k after 12 years (pay off early). But maybe we should have considered 401k or IRA instead? I've learned that in order to be wealthy you need to invest (which I've always called gamble). At this point I'm trying to learn the most responsible ways possible.

 

[edro]

no

We're at like 10k.

 

[Genx87]

Yes, been doing this for years. I also max Roth IRA and put in some extra on top.

 

[rh71]

no

We're at like 10k.

I'm assuming you mean each? The $18k max is per person, regardless of how you file?

 

[edro]

I'm assuming you mean each? The $18k max is per person, regardless of how you file?

Yeah. We make midwest money, so 18k (36k total) would be a lot for us.

Assuming 100k household income with married couple, that's $36k year or 36%!

50K = 72%
100K = 36%
150K = 24%
200K = 18%
250K = 14%
300K = 12%

You can see how much that 36K can be affected by income.

 

[SSSnail]

Yup.

 

[jlee]

I will have about $12k contributed this year - I should have it max'd out next year though!

 

[edro]

Oh wait, does the limit count employer contributions?

 

[Genx87]

Oh wait, does the limit count employer contributions?

No, limits are employee contribution. afaik the limit of employee + employer is 54K\year.

 

[edro]

Ok, yeah, $36k/year is tough for us.

 

[xeemzor]

Yea, I max out my IRA, 401k, and HSA. On top of that I also add another 15k/year post-tax to my 401k. My work and life situation is fairly unique though.

 

[rh71]

I stand to gain an additional ~$1.4mil if I max it out now till retirement. Hmm, which cars should I buy? :thumbsup:

 

[jlee]

Yea, I max out my IRA, 401k, and HSA. On top of that I also add another 15k/year post-tax to my 401k. My work and life situation is fairly unique though.

How exactly are you doing 18k to a traditional 401k and 15k to a roth 401k in the same year?

 

[jlee]

Ok, yeah, $36k/year is tough for us.

If you're doing a Traditional 401k (which the vast majority of people should be doing), that $36k is an effective ~$27k out of pocket (assuming 25% tax bracket). It's still a lot...but it hurts a lot less being pre-tax.

 

[ultimatebob]

I stand to gain an additional ~$1.4mil if I max it out now till retirement. Hmm, which cars should I buy?

Doesn't your employer give you something like a 6% match, plus an additional 2% on top of that?

They did when I worked there, anyway. That should be something like 10K a year that you're saving.

I tend not to worry about this too much, since my wife has an old style government pension that will pay 80% of her salary until she dies. Anything I save on top of that is gravy.

 

[rh71]

^ just the 6%. And the pay here you know sucks - I started out of school.

 

[jlee]

^ just the 6%. And the pay here you know sucks - I started out of school.

The more you do now, the better off you'll be later - figure roughly doubling every 9 years, so $1 now is $2 in 9 years, $4 in 18 years, $8 in 27 years...

 

[Schfifty Five]

Yes, been doing this for years. I also max Roth IRA and put in some extra on top.

How do you put in extra once you max out your ROTH or 401k? There are penalties if you over contribute.

 

[kranky]

How exactly are you doing 18k to a traditional 401k and 15k to a roth 401k in the same year?

Not a Roth, but an after-tax (non-deductible) contribution to a 401k. The 18K limit applies to deductible 401k contributions. The overall limit is 53k which covers deductible 401k contributions plus employer contributions plus after-tax employee contributions.

 

[xeemzor]

How exactly are you doing 18k to a traditional 401k and 15k to a roth 401k in the same year?

Through a mega backdoor roth.

 

[Uppsala9496]

Nope. 15% salary each for the wife and I. Max Roth for me. Cash savings to cover 6 months unemployment for both of us, and 1 year salary invested in ETF's that I can pull if necessary. Oh an no recurring monthly debt (no cc, car payments, mortgage, etc.).

 

[darkewaffle]

I did the full 17.5k last year. I don't make a ton of money but I am fortunate in that my expenses/cost of living are not especially high so I can afford to do so now.

 

[Scarpozzi]

I always want to, but can't because I'm paying off short-term debts. I contribute to a Roth, a 401k, and luckily have an employer-paid pension fund on top of that. I'm also interested in how much that would decrease our taxable income if my wife and I both put that money aside for a few years (at least).

I want to have hundreds of dollars somewhere in an account by the time I retire.

 

[Ken g6]

Nope. My employer dropped his 401k plan a couple years back. Even if he hadn't, 401k's are only tax-deferred plans, so I'd only invest enough to drop myself to the next tax bracket.

 

[ViviTheMage]

naw