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If trying to evenly (over the year) max out the 401k at $18k, that is anywhere from $692-750 a paycheck. After taxes and other deductions, seems like net pay is really low. I am trying to understand how you'd manage contributing to multiple retirement funds and still build liquidity or a savings goal like stashing cash for a house downpayment. Plus with other bills like car note, rent, how in the world are yall making this possible lol.
I’m at $104K and I only contribute 6% to my 401K. On the other hand, I drive a sports car, live in a nice place, and travel 3-4 weeks a year. I’m not terribly concerned with saving a huge nest egg, since I could die at any time. Doesn’t mean I don’t save at all, just means I’m not trying to retire on a huge pile of cash when I could be enjoying life more now. I also chose to forego putting any money into a 401K until I saved enough for a down payment on a house. This is what really changed things around for me. While many people try to juggle saving up for a house while also contributing to 401K and IRAs and more liquid savings, I just sprinted towards the down payment and bought a house within my third year of working in public (when house prices in LA were much more reasonable). The tax benefit, low interest rates, and fixed housing cost (vs rent in Los Angeles that always goes up) allow me to live much more comfortably than my peers. Not the most orthodox saving strategy, but I do believe getting the House first is the best way to go.
You make 300k per the above guy lol
I do 18k and 5500 to Roth - I wasn’t able to do the 18k until I hit the 100k ish salary earlier this year. Get rid of your car payment and make your rent be a reasonable % - I have a roommate and my living exp is under 1000. I had to save my cushion first before I started making out too. Now I have my 6 mo reserve, I don’t care that much that I’m only saving 300$ per month outside of retirement accounts. Just make a sit of priorities and tackle them one at a time
Op- it gets a lot easier as you climb the ladder and get those bumps in pay. I’ve raised my deferral rate with each annual salary increase.
I’m currently contributing the max to my Roth and 14% to my 401k. 50/50 Roth and traditional.
I just got to 100k and have been wanting to max out my contribution but have been saving for engagement ring, wedding, and down payment on a house.
You’ll get there.
I’m a senior associate in NYC making $116k, and I put 5% into my 401k every pay period. I have savings and Roth IRA built up from before I moved to NYC. There’s no way that I could live comfortably in NYC without a roommate, and put away over $20k per year right now
Max out 401k with $18k split 50/50 traditional and Roth. Also Backdoor Roth max each year. I make 300k and live conservative lifestyle
Low house payment, average car, I don’t go out to eat a lot, not a bar person. Single. No kids. 30% at 65k salary. Max 401k contribution. It’s taken out before I see it, so I don’t really miss it. I get used to my paycheck. Car payments just ended so that’s a little extra money. Do what you can now and increase every year
Make a budget now! The sooner you tighten down with a solid budget the better you will be.
Yes - it’s pre tax, including FICA, grows tax free and you can pay out of pocket now for medical expenses and take It out years later if you keep track of your receipts and expenses. Eventually you can take out once you hit a certain age even without medical expenses. Some advisors say you should max out HSA before maxing 401k
Maximum matching on 401k then personal limit on Roth IRA. So like 6% I think it is then 5500. 58k salary
20% 401k contribution; $5500 to Roth IRA. 81k salary
I make 140k... Max out 401k... Don't do backdoor roth because I'm an idiot, but do have an HSA and taxable account.
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This is all great info. Thanks for the inputs!
My advice, whatever your saving or living strategy is, just make sure you are contributing enough to your 401k to maximize your firms matching contribution. Otherwise you’re leaving guaranteed money on the table. It makes me happy to see that amount hitting my 401k twice a month :)
Follow up question, is there an advantage to maxing out HSAs? I'd rather keep my money to spend as disposable income since I seldom go to the doctors and have little medical expenses. I keep seeing that its pre-tax money you can roll, but am I missing something?