Hi, I’m going to start maxing out my 401k in Jan alongside my HSA (which I currently ask out). My take home is going to be significantly lower than currently and wanted to get some input from people who currently max out if it’s affected their quality of life. Thanks.

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I would put a budget together and see if your take home pay will leave you room. Peoples answers to your actual question may not be helpful because take home pay will be so different. A parter would have no issues with maxing 401k and HSA while a staff in HCOL area probably can’t do it easily

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Valid point. Thanks for the input !

I started maxing out when I was making 76k. I live alone in nyc, rent was around 1700.
It’s definitely doable, but tight. I was bringing home 3300 net every month. I already had my emergency fund set up and no debt.
Assuming you’re still in the big four with relatively predictable raises and job security, I wouldn’t worry about quality of life.

likeuplifting

I’m also in NYC so this is helpful. Appreciate your input !

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Long as you have money on the side just in case. Do it

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It might not be as low as you think it to be. Your current marginal tax rate decreases with these contributions being taken right at the top (pre-tax).

likesmart

I second this. Maxing out diverts some of the money you were being taxed on the Federal and State level into your 401k. A cafeteria plan such as an FSA/HSA comes off your gross before taxes are even applied. Use an online paycheck withholding calculator to visualize this.

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I did this at 63k in Los Angeles and it was painful at first. I had just refinanced my house (I'm married and we have my spouse's income too for the house) so I had 1200/month more in cash flow. We also sold our additional car to save $300 a month. We cancelled our cell phone plan and went prepaid. We were however able to put that money into our respective retirement accounts. It's a nice feeling. As long as I have $50 left of spending money for pizza and a movie every week I'm happy. We both got raises this year and put the additional cash in a roth (contributing monthly). Even if we both exceed 200k HHI we still want to live as if we were making way less. We're aware we will in fact stop working one day and we want to be ready for that.

likeupliftinghelpful

^ ♥️

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Are you meaning the pretax $19.5k limit? Thinking about doing this too

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20.5 in 2022 - yes.

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Most plans allow you to change your 401k contribution at any time in case you really are sufferring for extra money. Just knowing that made it easier for me.

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