Consulting

How old are you and what's your 401k contribution? I feel I didn't take it seriously in my 20s and now regretting 10 years later. How does one know you have enough saved up for retirement? TIA!

likefunny
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30 years old. 0k 401k, 0k savings. Living life one day atta time

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likefunnyuplifting
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Say it ain’t so!

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Talk to a financial advisor. Comparing yourself to a random group of people won't change your financial well being.

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likehelpful
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Use the XY planning network and find one you get along with. They are all "for fee" planners that charge by the hour. They do not push products and are all fiduciaries. To do a full review of assets, look at tax planning, financial goals, and some other items is typically 4 to 5 hours of work and most are about 200 an hour. All of them will do a free intro call.

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As soon as I could afford to, I maxed out my 401k every year. Soon after having kids I ramped up my 529 college savings until I maxed out my state tax deduction ($20K per year). Once I got in a HDHP health plan, I maxed out my HSA and paid medical expenses out of pocket to let it grow. I’m 48 now. There’s no point in beating yourself up over the past. As far as how much you need, a common rule of thumb is the 4% safe withdrawal rule, meaning you can in almost all cases safely withdraw 4% of your portfolio each year without the principal dropping to the point where you might run out. From there, decide what you think you’ll need per year in retirement. If you want to spend $100K pre-tax per year (or post-tax if you use Roth), you’d need $2.5 million when you retire. You’d want to adjust this for expected inflation since that is probably a significant factor over 20-30 years.

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likeupliftinghelpful
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BCG1 The 4% rule itself was created using Monte Carlo analysis. https://feedingourfire.com/2018/08/the-4-safe-withdrawal-rate-validation-with-monte-carlo-simulations-for-our-scenario

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1. 35. Spouse 33. 2. Both max 401k + a bunch more in long term investments (retirement, kids education, weddings). $50-60k each / yr 3. You really need to model it. My rough math is below. - Currently spend $150k on things that will continue in retirement (food, travel, etc). This excludes investments, mortgage, childcare etc that should drop off by retirement. - I have a very comfortable lifestyle. With 20 years inflation, that 150k becomes 225k. - Squishy part 1: 3-4% is often considered a “safe” withdrawal rate for a nest egg. At 225k, and allowing post-retirement inflation erosion, I’d need $7.5M at conservative 3%. This is squishy because it’s quite sensitive to market timing. The right way to do this is Monte Carlo simulation and pick a Principal amount that gets you desired cash flow under 90% of market outcomes. - Squishy part 2: To reach 7.5M, we need our current savings + $100k/yr inflation adjusted (ie 102k next year) + 8% market returns. This is squishy because market returns aren’t constant and 8% nominal is reasonable optimistic (though in line with long term avg). This should be simulated as well, as big market swings could move this $1-2M - I’m adding $2M for kids education and weddings and then rounding up. - To get to that $10M, we probably need to put more like $120k/yr

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likesmart
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P4 - I’m twenty years younger than you. My $10M is your $6.5M (inflation). I also want to start drawing at 57 when my youngest is theoretically out of undergrad (the best laid plans...) That said, I agree it’s lofty.

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I’m 24 making 75k and put 21% into my 401k in NYC (hopefully about to get a 30% raise), but find it really hard to substantially save aside from that :/

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M2 4 lol

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Doesn’t matter, Elizabeth Warren is going to raid your retirement accounts and tax them anyway.

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likeupliftingfunny
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I love her intellect and matter of fact style. I’m scared of what she will do to my financial well being and resent her general anti business tone... it’s like anyone who works hard and tries to be financially successful is a villain in her eyes.

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My best advice to kids in their 20s is find a credit union that will lend you 95% LTV on a home, buy a nice one, rent it out and live there as well, and get a 15 year mortgage at 2.875%. Before you know it, the house will be paid off thanks in large part to your renters. Interest is cheap, it’s like renting a home for $500 per month (and it’s tax deductible). Some credit unions pay your private mortgage insurance (PMI) too so you don’t need 20% down.

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27, 100% of paycheck taking advantage of the full pre tax and after tax limits so basically I have not gotten a pay check in the last three years. I live off of dividend income from a taxable account which is roughly 22-25k a year and live in an extremely low cost city. Could probably save some more by buying a house etc, but don't want to lose my mobility if I plan to jump ship. Additionally increase my federal witholding to offset the dividend income taxes. Please note that this is extreme and 99.9% of people cannot do this.

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likesmart
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PvP, Botting community is pretty toxic, think PwC may be about the same though LOL

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26, 21k in my 401k ( I save 6%, starting at age 23) and $15k liquid savings. No debt. I felt like this was pretty normal for my age but based on this thread I feel behind 🤔

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You are comparing yourself to consultants. Federal Reserve found median net worth of 35 to 44 year olds was $59,800 in 2016.

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25 - currently contributing 10k per year into 401k. Not maxing since I’m aiming to purchase a second rental prop soon. 25k in 401k + 55k in other investments + savings

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30 - 65k in 401K + other stock investments. I only contribute the company match. I also own a home as well.

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start where you are do what you can next year save a little more In ten years you'll be amazed

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likesmart
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Early 30s, about $250k in retirement accounts. Owning a real-estate portfolio has been awesome as that allowed me to do a SEP-IRA as well to sock away up to 54k each year or 25% of Net Income in addition to the 401k. We also live on substantially less than we make. We have no other debt than mortgage debt on some of the homes. You’d never know we already have a $2M net worth.

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Can you explain more about the SEP-IRA?

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44 $900k in 401k

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34, 270K. There are loads of estimators for determining readiness for retirement.

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likeuplifting
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I bet if they disclose to independence they will allow it given this is all Index funds that are fully distributed. I asked a guy in D he told me you need to make sure that you disable the Tax Harvesting... honestly better off just getting the vanguard total market but eh...

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To sum up everything - max it out. It’s cheap and it’s a tax advantage

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25. Max contribution at 19k this yr.

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How do you convince yourself that your 401k stash will be there for you four decades from now? I lived through a total economic collapse of my country and am now skeptical about 401k at best. Making minimal contributions, diversifying investments in other ways, own rentals, planning to retire outside of the US. >1M stashed value, mid-30s.

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No. Social Security has a major funding issue. I am totally discounting its viability. If I do get something down the road, that’s gravy. Call me an optimist…

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25x annual expenses is a good savings number to shoot for.

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Contribution should generally be at least enough to max employer contribution. Outside of that it's really based on your financial situation and financial goals.

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