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If i can afford it, any reason why i shouldn’t be maxing out the 401k and Roth IRA? $19,500 & $6,000 respectively.

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Only case off the top of my head would be if you were saving for a down payment or a similar large cash purchase (wedding/honeymoon, home remodel, etc). Or maybe if you needed some extra cash flow for refilling your emergency fund (say you had a house repair or applicable replacement).


Completely agree. I think op said further down that they already have enough for a down payment.

Max out every chance you get. If things get tight, only put in what your company matches in your 401k and put the test in your Roth. Can’t pass up your company match. That’s free money!

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Emergency fund, paying down any high interest debt, or preparing for a big purchase (house?).

I'd say you should be maxing the 401k/IRA if the above are good to go.


Great summary from KPMG 1.

Liquidity is the only thing I can think of


Yes but only the contributions of 36. Of you take out more from earnings, you will have tax and penalties

The only thing to say is "why not?"
Makes complete sense to max both and uze backdoor Roth IRA, if the HHI takes out out of eligibility for Roth IRA.




Only thing I can think of is if you have ability to use an HSA. If so I would would do that before going over 401k match amount.


So humble that you are!

You should absolutely do this, the earlier the better.

This! I juiced my 401k deposits around 28. Felt great, has worked out pretty well.

Real estate could be an area you want to invest in and those contributions can be leveraged for the capital needed for acquiring cash flow positive properties.

I hear you. Trying to do it with my second home. Also on my 30s, but no kids. I know that I should move to do a lower down payment, but I've been in a nice townhouse for 5 years.

But I also know that it really isn't worth buying just one multi-family. I proba lt need at least 8 units to make this worth the effort. I think I'm aiming for 12.

Is it 19.5 and 6 separately? For a total of 25.5!?

If you're over the limit, you can contribute to an tIRA, do the backdoor to get it into the Roth.


Do you get to choose where the 401k investments go? My 401k performance personally sucks and I can’t change where the stocks get invested in. Also I plan to always make over six figures so it’s really not saving me much money imo

Never heard of a 401k only having one option either. Would definitely check that.

And on top of that, most too companies offer a match. It looks like Amazon match is 2% total if you do 50% of 4%. So at $100k, that's still $2k of free money each year, assume you are fully vested.

On top of that, if you plan to be a high earner, you will greatly benefit from maxing out your 401k and reducing you current year tax liability by contributing to a traditional 401k. Even if you contribute to a Roth 401k, that's s better option than brokerage account.

Additionally, if you are going to be a high earner, you are going to need to make use of multiple investment options to save enough for retirement, in the most tax efficient manner. 401k, IRA, HSA, brokerage account. An of course if you have access to any stock options or pension plans or retiree health plans, you factor that stuff in too.

But sounds like you need to do s lot of research if none of his is in your radar. The earlier you start, the easier it all is.

You need to watch the income ceiling for Roth contribution eligibility

Just don’t have a traditional Ira balance if you may need to do a backdoor Roth


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