anyone max out their 401k?

[andylawcc]

ya, i just opened account with Vanguard and their online rollover process seem easy & quick, just have to find my old 401k account numbers.

 

[xeemzor]

does yours let you do the in service withdrawals and put that money in a roth IRA? i love it when plans allow that

I'm not sure but I don't think I ever would do a rollover. My 401k offers the Vanguard target retirement funds I would invest in anyway.

 

[brianmanahan]

I'm not sure but I don't think I ever would do a rollover. My 401k offers the Vanguard target retirement funds I would invest in anyway.

if it did allow in-service rollover of after-tax 401k to roth IRA, it would most likely reduce the taxes you will pay.

after-tax 401k withdrawals are taxed as ordinary income. so say you invested 100$k in after-tax 401k (5$k per year over 20 years) and it grew to 200$k. then the 100$k gain will be taxable when withdrawn.

but if you can roll over the 5$k after-tax 401k contributions into your roth IRA each year, it lets you only pay tax on that short term gain. if you rolled over 5$k each year and the average gain was %10, then you would only be taxed on 10$k (500$ per year over 20 years).

if it's possible, getting the after-tax 401k into a roth IRA as soon as possible is almost always good move. the sooner, the better.

not all employers allow in-service withdrawls of after-tax 401k, but i've read that a little less than half do.

 

[edro]

My goal is to earn just as much, if not more, in retirement than I do working. I've made sacrifices and my expected retirement balance in all accounts is ~$150k by 30.

If you've been maxing out all accounts and only plan to have 150k by 30, you must have just started a few years ago.
150K by 30 seems like a decent good target.

 

[Engineer]

My goal is to earn just as much, if not more, in retirement than I do working. I've made sacrifices and my expected retirement balance in all accounts is ~$150k by 30.

I expected to have $1,000,000 in my accounts at the age of 45 and then job loss and 2007-2010 (or thereabouts) happened (and other 'bad investments' of my choosing).

 

[dr150]

My wife and I always max the 401k and ROTH Conversions.

Investment properties mortgage is purposely not paid off to take advantage of taxes and make more money in the market with that ~4% loan chunk cost.

I try to buy on red days. Since it's impossible to time the market....even when you put money to work at the top before a fall, no big deal, as it eventually goes up again above purchase price in a few months (happened to me with my fresh money IRA investment into biotech this year, after 1.5 months, I'm above water). Count yourself fortunate and lucky to stumble into a bottom to a rise. Don't expect it though.

They key is to be IN the market and not letting that money sit idle in a savings account leaking value with ~2% inflation. Banks are investing your "dead" savings money in the market so why shouldn't you use that capital to invest yourself? It's a no-brainer.
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Another bit of advice, is not to trade in and out of positions as you'll likely lose versus just staying put. A survey showed that 1/3 of investors LOST money the last 2 years. LOL! I don't even know how that's even possible if one stayed put in a dummy S&P500 index fund. Shows you that noob traders shouldn't play with fire and just respect the market volatility.....away from the Trade Key.

Other advice about the 401k. See if your plan allows to get your money out of their dogshit menu of funds and into a trading account. Most plans have this ability nowadays, but you have to apply for it within the plan. Case in point, Fidelity 401k allows to have that cash moved out of the company 401k funds and into a cash account or automatically into free Fidelity Funds like the monstrously performing FBIOX or free ETFs that Fidelity offers. Performance and fund costs should easily trounce most any fund within a company plan.

 

[Jeff7]

<modest brag thread>

 

[andylawcc]

wait, if you all max out your 401k at 18k, which means you guys are putting in MORE than 20-25% of gross income (assuming you making 72-90k a year). You guys are okay with that?
Some of you are probably making 7 digit / 100k+ so 15% is not that noticeable of a hit, but pile on mortgage and others expense like kids i don't see myself be able to put aside that much income for the future.

 

[Engineer]

wait, if you all max out your 401k at 18k, which means you guys are putting in MORE than 20-25% of gross income (assuming you making 72-90k a year). You guys are okay with that?
Some of you are probably making 7 digit / 100k+ so 15% is not that noticeable of a hit, but pile on mortgage and others expense like kids i don't see myself be able to put aside that much income for the future.

I have two kids (one in college and one in high school) and they are indeed expensive. However, when mortgage rates were much higher (mine was 7%), I decided to contribute enough to get the company match (and just a little more) and to pay off my mortgage instead (was 7% rate at the time). Just blind luck at that time, but that timing was pretty good in that it allowed me to hit the market at the downswing and up my contributions with no mortgage to worry about. Without a mortgage, maxing out stuff is quite a bit easier.

Wife doesn't have a 401k plan. Has a pension plan through the schools. Contributes 6% to that.

 

[brianmanahan]

wait, if you all max out your 401k at 18k, which means you guys are putting in MORE than 20-25% of gross income (assuming you making 72-90k a year). You guys are okay with that?

i'm never gonna have a wife or kids, so this money's just for me

 

[Engineer]

i'm never gonna have a wife or kids, so this money's just for me

 

[andylawcc]

just want to see if I am overspending for being single with no mortgage nor car payments. I am only contributing 10% and living "comfortably."

 

[brianmanahan]

i'm never gonna have a wife or kids, so this money's just for me

well at least i dont start threads about it like naer :awe:

it's a lost cause now though. nobody's interested in me. if they knew i had some money, they might be... but probably just for the money.

 

[dr150]

i'm never gonna have a wife or kids, so this money's just for me

You're the crusty old guy that'll tell kids to get off your lawn. :biggrin:

 

[soulcougher73]

Nope. 100k household. 36% is too much. Think were at 20% though.

 

[Capt Caveman]

wait, if you all max out your 401k at 18k, which means you guys are putting in MORE than 20-25% of gross income (assuming you making 72-90k a year). You guys are okay with that?
Some of you are probably making 7 digit / 100k+ so 15% is not that noticeable of a hit, but pile on mortgage and others expense like kids i don't see myself be able to put aside that much income for the future.

Some of us make more money than that.

I max out every year.

 

[Engineer]

Some of us make more money than that.

Some of us don't!

Oh....

 

[purbeast0]

i don't max it out, but i put 8% and my company puts 7%, so 15% of my salary which is more than the 18k limit though. i've been with this company for 2.5 years and have about $65k or so in my 401k with them. if i don't start my own business eventually i can see myself staying with this company and should be doing just fine at retirement age. also max a roth ira every year.

 

[LegendKiller]

Maxed out every year for the last 8 years.

 

[child of wonder]

Did $16k last year and am doing full $18k this year. Being 35 with only $60k in retirement savings I have a lot of catching up to do. Putting money in Roth IRA as well but now that our income puts us right near the cusp of the limit, we probably won't be able to much longer. Fucking double, triple whammies from the government.

 

[brianmanahan]

You're the crusty old guy that'll tell kids to get off your lawn. :biggrin:

yep! shoot, i feel like im 60 now even though i am half that age

 

[Blanky]

An alternate title to this thread is "Do you make decent money and don't have kids yet?"

 

[Spacehead]

...and then two regular IRA's @ $5,500 each.

Is that you & your wife...1 IRA each, correct?


With no 401K at work i'm limited to the $5500 max combined for my 2 IRAs. I don't understand the low limits for an IRA when they say people should be saving more for retirement.

 

[brianmanahan]

An alternate title to this thread is "Do you make decent money and don't have kids yet?"

and also want to brag on the internet!

 

[Sho'Nuff]

My wife and I both do every year. We have 2 kids.