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4ht July fireworks happening tonite
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I image that most were not able to max when they were just starting out also.
This. I didn’t max out for along time.
Savings rate is an important metric here. Earning 70k saving $10k is better than earning $200k and saving $20k
Saving 10k isn’t better than saving 20k lol
Would have to live a miserable life trying to max out at 70k. I started maxing out at 130k
Same
Didn’t max until I was making north of $100k and several years into my career.
Rising Star
I didn't max til I made 90k+
92k was the first year I maxed. Rent in a DC burb was 1.4k at the time. Put at least half of every raise toward it and then felt close enough to just go for it at 92k.
Yes, I wasn’t able to max out until I paid off 80K of students loans and started making 100K+
Thank you for posting this. Making low 80s and maxing it out is still not within reach.
Rising Star
I think a lot of people, particularly here, who are maxing out 401k contributions at the beginning of their careers are living with their parents and have few, if any, expenses. Makes it a lot easier. For those who don’t have that option or don’t want to do it, it’s going to be a lot more difficult. Just save what you can.
Rising Star
Max up to your company contribution first which is often like 6% of salary or something similar. That’s what you should do first.
There are other investments you can and should do before maxing annual limit. It’s totally fine to not do that at start of your career. I’d say once you are clearing around 100-120K, then you should look to do that if your situation allows for it.
Chief
I made $34k in my first job in 1992 with a B6 firm (the B4 used to be B8) and allocated 4% to my 401k because that’s all I could afford. Each year when I got a raise, I would add a couple percent to my contribution. Also the limit didn’t even pass $10k until 2000. I’ve worked 30 years and have about $1.5M in my 401k. Just contribute what you can and increase it each year.
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What I did is if I was living comfortably on my salary next time I got a raise I increased my 401k by the raise %.
I started maxing it at 85k with 25k in student loan. However, company covered my interest so I was paying minimum. As I got raises, it because easier because I was used to the money leaving. At 144k now, it is a breeze.
Yes, it’s difficult. But take a long-term, multi-year view in this. The YOU 10-years from now is going to freaking love you for maxing out every single year. Doing it early pays hugely.
Pro
No, and get a second job if independence isn’t an issue. Always easier when income increases if can’t reduce budget.