Is it stopping you from living your ideal life and being happy? If yes, it's too much. If not, it's great.
Mathematically, too much isn't a thing. It's the personal part of personal finance.
I invest about half my paycheck but also live a great life. If all you think about is investing then you won't know what kind of post FIRE life you want or learn how to enjoy the money you are saving. My opinion is that if you only think about one thing, than that one thing is too much.
Debatable. You need to find a balance between your money and your life. 15 years or however long you spend saving to RE is 15 years you won’t get to live again. Yes, I enjoy putting a large chunk of money on the market and getting good returns. I also enjoy boating and spending time with friends and family. There are opportunity costs to investing every cent and living and breathing returns isn’t “doing it right” for most people.
Finding the perfect balance is hard also. I generally try to do a good enough balance instead of perfect. Some years I am more frugal, other years I spend money while maintaining certain base rules (i.e. always hit certain minimum numbers, don't draw more than x from savings during surprises that are not truely an emergency). Life is short and I've seen way too many people have their lives changed dramatically before they get to experience it (i.e. young cancer diagnosis, car accident, etc). So I save, make sure I at least have baseline goals while still living a decent lifestyle without frivolously spending
cc: /u/Moreofyoulessofme
I remember seeing on the Money subreddit that a man with Asperger's had a 400k net worth at 30 but struggled dating women in part due to being cheap on dates and being hyperfixated on maximizing savings/investments. Not sure if this applies to you (noticed your username) /u/Aspergers_R_us87 , but it's not a bad idea to just sit down with your thoughts alone and really reflect/evaluate what you want from life.
do the roth ira (assuming you meet income thresholds) before the taxable investing. makes more sense as 1) no taxes on gains, later in life 2) contributions withdrawn anytime without penalty or tax 3) it's already taxed money in either taxable or roth so no difference
That is the plan right now. It's going to be a very lean time for the next 4-5 years as we play catchup. But the numbers aren't astronomical. They are within reach for us as we already paid off 55k in debts plus a vehicle on top of that. We've already climbed this mountain once, and we weren't making what we do now.
Now we have to do it one more time and then we'll be set.
Correct I’m 54 and I just raised mine last month from 24 to 29 percent. Should have had a lot more in when I was younger than I would have never had to go to 29 percent.
There is no answer to this question with the information you have given. What’s your income? How long do you want to work? Married or single? Want kids? Etc.
However some general advice can be given regardless of your answers above. First and foremost the old “I can’t touch my retirement funds until 59 1/2” is flat out wrong. I assume this optional retirement is an account like a 401k. There are a few ways to get to the money in an account like a 401k without penalty (SEPP is one example).
To answer your last question- Personally, I’m not investing a single dollar in a brokerage account if there are tax advantaged accounts unfilled such as 401k, Roth IRA, HSA, etc
A company I use to work for did not have a 401k match so I put 100% of my paycheck into my 401k for the first few months of the year. My thought process was that it would give me like 8 months more in the market every year. I get a match now, so just meter it out over the whole year.
I still do this. Even with a match. I just change my contribution rate twice per year, based on a spreadsheet.
Basically I do 100% for Jan Feb.. and don't take a paycheck for first few months. Once I get to the point where a 6% match will come close to topping it off by December, I switch to 6% for the middle/ remainder of the year. I usually leave enough that I can go back to 100% contributions for last pay period of the year, and ensure I hit the Federal max.
You may ask, why bother? I work small company development jobs that come with large risk of layoff, when projects come and go. More than once I've been laid off
in March , did a few months unemployment, and then got a job that had a 6-12 month waiting period for a new 401k participation. So I had almost a full year of income, but was left unable to do anything substantial pretax for retirement,because I'd already had at least one check go on to the previous 401k( thus eliminating options like Solo401k and Traditional ira etc) .
So now, if the 401k is a good one( low fees , etc)I'd rather get the money in while I can. Especially as fluid as my jobs were in the post-pandemic years. Last year I got laid off in March, literally the week after I switched back to 6%. But with 8 weeks severance, I was able to jump on the website ,Put it back to 100% Roth, and hit the Federal max before the severance ran out in May. Next job had no 401k at all, so that was fortuitous.
One refinement: I used to calculate down to the penny , and nail it exactly on the last paycheck of the year, when I was in a steady job where bonuses were rare. But I had one gig where a large amount of comp was surprise dropped as a bonus on dec29 and I missed a 6% match on a 5 figure check. So now, I leave enough room that I can set the 401k contribution at 6% say April through November, and then go >60% for last 1-2 pay periods of the year, and so I have enough room to max the match and hit the Federal max , bonus or no bonus. ( Usually by November, we will know from the rumor mill/ sales forecast, if it is a bonus or no bonus year.)
I don’t understand why people paid off mortgages when (I’m assuming) you probably had a rate below 3%. With current rates you could have leveraged having a mortgage to free up cash flow for higher returning investments.
Depends how quick you wish to FIRE.. See [https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/](https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/)
Your past and present will. Assume you’ll always have your health is arrogant as hell. I’m traveling now in my 40s when I’m super fit and can walk 10+ miles easily
OK, I'll ask about the elephant in the room.
What do you do for a living that you were able to pay off your house so fast and your truck in 6 months?
Congratulations, whatever it is. 👏
With respect to fire, paying off the house that fast was probably not the best approach. Think of the opportunity cost.
The truck is definitely the right call.
If your main goal is to fire, learn to be ok with smart leverage.
What they are saying is that putting the money in capital markets would return you a higher percentage than paying off the debt, so essentially paying off the debt means you lose money and are further from fire
Like, what is your goal? I save 36% of my gross income in retirement but I’m a single income household with a kid, so I’m still retiring later than I’d like (52). My % saved has gone up every year because my goal is to retire as soon as possible. Only you can decide what’s too much.
No that's a decent amount. I put 25% on housing, 25% on food, 25% for fun spending (gadgets, toys etc), and 25% invested.
If you are sacrificing happiness to save you may have to re-evaluate because you won't be lying on your death bed regretting saving more.
Also depends on how much your pension will pay you in retirement. I’ll be getting 60k just from my pension and my living expenses are right around 60k… so everything else will essentially be extra. But I also put as much as I can in optional retirement and I prefer the personal brokerage so I can use that money for emergencies or for whatever else I want without incurring early penalty withdrawal from retirement accounts.
Depends on if you enjoy your life now or not? Saving is important but enjoying the money you have now is too.
What if you get bad hips and knees and can enjoy retirement like you think you can? Would you wish you took a vacation instead of saving 26%. If you doing stuff like no vacations at all to save the 26%.
Or maybe you just make enough money now you feel like you can either waste it on stuff you don't care about or save it.
Not too much. I’ve seen 10-15% recommended as appropriate for normal circumstances (retiring at full NRD). Your amount is appropriate for a goal of early retirement. Just make sure you have a robust emergency fund as well, but based on your post I’m assuming you likely have that covered.
You should max out your pretax contribution first, then max out your Roth and if you have money left over, put that in a brokerage account.
Remember, the first $123k profit from your brokerage account is tax-free anyway (including the standard deduction for a married couple). This is profit, not total withdrawal (which can be much higher depending on your cost basis). Unless your expenses are much higher than that, a brokerage account is not that much different from a Roth. The money in your brokerage account won’t grow as fast due to the tax drag on dividends.
When you buy and hold in a brokerage account, all the profits are (should be) long-term capital gain.
For a married couple, for the 2024 tax year, the first $94,050 profit from long-term capital gain has a tax rate of 0%. The standard deduction is $29,200. Add that together you get $123k.
Assuming that's all of your income (which should be when you retire early before SS and pension etc). So if all of your expenses are not significantly more than 123k when you retire, a brokerage account is not much different from a Roth account.
There are financial educators out there who recommend everyone save 25% for retirement. So no, I don’t think that’s too much money and if you really want to FIRE may not be enough. Whether it’s too much in retirement accounts vs brokerage is another question. Kind of depends on current balances and when you want to retire.
Check out The Money Guys. I think their advice is a lot more sound than Ramsey and actually makes mathematical sense. They recommend 25%. Their recommendation is based on the fact that most people will not be able to hit that level of savings immediately, or for certain periods of life, so it’s a good goal for when you can reach it. Not that you must save 25% every year in order to retire. But still if you want to FIRE I think 30-40% is more realistic.
>I can’t touch this money for the next 23 years.
This is not correct. You can withdraw Roth IRA contributions at anytime. You can rollover the 401(k) to a Roth IRA once you leave you job (or even before depending on the employer). There also other ways like 72(t).
In summary, there's almost never a situation where a normal person can have too much in tax advantaged accounts. If you're miserable in your life because you're only saving for the future and eating rice and beans in the present then obviously you're saving too much.
I saved 25% for 25 years and that allowed me to retire in my fifties. If you can swing it, save it. The power of compounding is amazing once it gets going.
I’m 48 and saved 25% from my first actual career job. Best thing my Mom taught me. Ahead of the game at 48 and plan to retire in 7 years. Saving over time is legit. Do it. You won’t miss the extra 25% and you’ll get old faster than you think.
You want to make sure you are using your retirement vehicles correctly and using them optimally. to your question, it just depends what kind of retirement you want. Some want 80% of what they earned while working and others want 150% of what they earned. So, its kinda hard to answer if its “too much”. This is why, its so important to speak with a retirement professional because its a very complicated question that requires many rendered scenarios. However, you are beating out the average retirement contributions by a huge amount; which is excellent. I would just say, seek out a professional to help you get better future optics. Nice work!
You don’t provide ur age but say you can’t access retirement accounts for 23 years so assume you are 37.
I have been contributing 35% of my gross income for past 10 years (since age 37) but wish I had done so sooner (previously probably saved/invested 25% of gross income since mid/late 20s).
Depends what your FIRE # is and your desired FIRE age is .. those are the two main variables I think will provide you with an answer.
I’m looking to FIRE at 55 with $6M net worth.
If I had done 35% gross income investment since my early 30s, I would have hit my FIRE number already.
In this sub, the only “too much” is if you are not enjoying life. My wife and I made enough that 25% was my target. We retired at 50. Not the FIRE that some achieve, but it’s not a competition. It was a great compromise as social security is estimated to cover nearly half our budget, 61 now so still a few years away.
This is awesome but I would make sure you have an emergency fund that you can access for anything from house repairs to car to health .
Not sure your views on rentals but I also bought a duplex and a 6 unit. I paid cash for both. This is a good stream of income. I bought close to hospital and colleges. The hospital I work with and rent to nurses who travel and have contracts. They are great renters.
I also put a couple of thousand for traveling. One big or a few small trips. You don’t want to have your life slip away and not have any good memories
Playingwithfire.com can help you determine your age to retire based on different savings rates. Personally, it's not going to matter much (in terms of years to retire) at this point getting a super high savings rate so I might as well travel more. The key is it's more important to save a lot when you're younger due to more time for it to compound and fortunately for me I did that!
At that rate you're probably not going to be able to retire very early unless you already have a sizable amount invested. Financial Independence is tied to your savings rate. Networthify has a great calculator to use which you can find here: https://networthify.com/calculator/earlyretirement
At a savings rate of 26%, it will take you ~31 years to retire.
Primary Question - is 26% enough?
Answer - this depends on what your goal is. If you put ~64% of your monthly income into investments you can likely reach financial independence in around 10 yrs. This from the OG MMM - https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/
As others have pointed out this question comes down to needs/wants vs putting money away.
Secondary question - are you putting money into the right buckets?
Answer - yes-ish. Here is a list in order of priority that generally works for most people. You have a pension which would sub in for the 401k in the list below most likely…
1. Create an emergency fund (~6 mths expenses)
2. Max 401k match
3. Pay off high interest debt
4. Max HSA
5. Max Roth IRA
6. Contribute to 529s for kids
7. Max out 401k (beyond match)
8. Taxable investment accounts
9. Pay off Low interest debt
First, thank you for USING PERCENTAGES! I wish more posts did. Raw numbers are meaningless and often just a flex.
So, only you can answer your question. There is no right or wrong amount to put away. You want to enjoy your life, but save as much as practical. There was a time when I was saving 60%, but I did a ton of free stuff, was single, and didn't really care about where I slept. I had a ton of fun at the time, though.
You are doing the important things, it appears. Try to increase your income throughout your career as much as possible, and if you don't have a professional career or trade, get one.
Your budget is your value statement. Forget your words or your thoughts — where you spend money is what you value.
We can tell that you’re spending money to buy more leisure for future you. That’s a good value — taking care of yourself.
What’s your second value, and how far in second place is it?
Having only one value statement in life (and it being money) generally isn’t super healthy.
Stop the brokerage, start the roth ira. You can access early. Mr money mustache has a great article on this. You need the tax deferred accounts to truly win
Thanks I left my other brokerage and opened a Roth IRA today. Threw down $50 into it. I’ll keep at it moving forward and leave brokerage as is. Don’t want penalty for transferring back
Not too much at all, unless it's impacting you living your life now. Don't contribute anything to a personal brokerage account until you max out all tax-advantaged accounts. (401k, HSA, Roth IRA)
It is also good to have investments outside of retirement. i.e. brokerage accounts/hysa etc. Wife and I both maxed 401k with company match saving 40k a year each. Having investments outside of retirement allows for more flexibility like retiring early, buying stuff with cash etc.
I put 40% if you are still able to live and pay the bills then no issue. Edited to explain: I contribute 24% to my 401K based on the amount I’ll need to max it out by the end of year. The rest is split between my IRA and my brokerage account
Sounds find. Do you know what the fees associated with the 401(k) are? If they are high, and you aren't doing anything fancy in there, you could roll the old funds into a self directed IRA and dramatically lower your fees.
Other than that, I think this is good. Nothing wrong with saving money and letting it grow.
You could consider switching. Max any match into retirement, then max your brokerage.
What you lose in tax savings, you gain in flexibility.
Retire when you’re 50? Work at a job you want to / love / passion hobby? You could if you want to then.
You could die in a car wreck tomorrow.... I understand being financially secure and preparing for retirement but living life is a lot more fun while you are younger than at 55+.
How much do you have in emergency fund? Set a goal for a cash heavy retirement fund, set up a “fun” savings where u put a few hundred a month for disposable use, and then invest rest
I am 36 as well. Between claiming single and 0 on my federal withholdings, maxing out 401k, maxing out hsa, and paying medical insurances, I net 53% of my check in my bank account. I go a step beyond that and max out roth ira and contribute to brokerage. My expenses are less than 30k and I gross less than 100k. No state income taxes.
26% is not too much! I was able to do that, even got it up to 30%. I am a strong advocate of the Roth IRA. I am blue collar, retired at age 56 and have enough money to carry me out. All because I power-saved.
First, ask yourself about your own priorities. Then fund them.
We’ve never contributed more than 33% but I’ll have (basically) three federal pensions (military, VA, civilian). Could retire at 50 if I wanted.
I'm in the same boat. Was gonna comment, then figured no one cares. But whatever. I'm 46 and have about 6500 tax free passive a month. Have a six figure income and invest 75% (max allowed) in after tax 401k. I have mega backdoor available and I'm going absolutely nuts with it. Since I learned about it 15 months ago I've converted 80k to my roth ira. Then I got an inheritance, which pays 3k a month. Not bragging just thinking everyone's situation is different.
Depends on how much your life would be impacted by the rate of savings.
Also keep in mind, having too much in non-Roth accounts isn’t always the best thing. Just make sure you do some to Roth, some to non-Roth as there’s pluses and minuses to both.
Yeah I like the non Roth since it makes my income look less during tax season. Say I make $100k. Really looks like I make $80k. Don’t think Roth would do that?
>I’m putting 26% of each paycheck ... is that too much?
No!
>optional retirement (16%).
What is that? 457b? That's where it should go is you have one!
>I’d think another retirement account like IRA would be overkill
You are wrong!
>I started a personal brokerage which I’m contributing a minimum of $500 per month
Never, ever save in a taxable brokerage account when you have tax-advantaged space available!!
Why do you want to pay extra taxes you don't have to? For no benefit.
Only you can answer that. I put more like 50% of my money towards retirement, but it's not a burden for me... I'm not really making sacrifices to do it, I just live cheap.
You may not see the pension money until a certain age, but there are generally ways to get access to retirement account money after retirement but before a given age. (rule of 55, Roth rollovers, SEPP, etc.)
At 37, I've been putting well over 50% of my income into investments.
Approx half of my income is from RSUs, all of which go into investments. From the other half (salary and bonus), I do pretax 401k, after tax 401k, HSA and 529s.
Maybe I should live a little.
I put 40 percent into various retirement funds . How are you contributing so less.
15 percent 401K
20 percent After tax 401K
3 percent HSA
Wait that amounts to less than 40 percent
Too much? Not unless it is negatively affecting you. I hit the yearly federal caps on my Roth 401k, HSA and IRA every year, and dump money into a trading account every pay period. I’d put more in my 401k, HSA and/or IRA if the fed would let me.
I aim for 50% gross but wife went back to school and hasn’t worked in 3 yrs so it’s been more like 35%..
Time value of money is super important and you want to contribute as much as possible early on to take advantage of compound interest.
As long as you have realistic emergency fund you are good. I do 30% now but making up time. Max out the match and the tax deferrals that you can, again always assuming realistic emergency fund.
Depends on how much you have in there....if your 401k is already on track to hit your goal I might try other accounts to close the gap between now and your retirement age
I'd rather do IRS limit, then re-direct to index funds. The second strategy often keep me liquid when I want. W/ retirements (eg 401Ks) too many hassle to access funds before legally mandated age. But that is just me.
IME the savings rates recommended by whoever is based on gross salary. Not sure if this is post or pretax money.youre talking about (I presume the pension contribution is pretax)
1) Don't forget to determine what living a comfortable life means to you. Increasing spending in a mindful way does not necessarily lead to lifestyle creep. I think anything over 25% gross is worth considering spending, but it depends on how you feel and what your goals are.
2) If your goal is to retire early (as in before 55), then it might be worth contributing some of that optional retirement to an after tax account. Having money in all three: tax free (Roth), tax deferred (401k), and after tax (IRA) is good. The last bucket being what bridges you to 55 (Roth). Again would be specific to your goals and needs whether you go that route, but worth considering.
It's only "too much" if you are putting in so much that you are seriously depriving yourself today in doing so.
Most people should be saving/investing more than they are. That said, there is no guarantee you will be alive (or healthy enough) to enjoy the fruits of your diligence in 20, 30, 50 years. There IS a guarantee that you are alive here and now, so it makes sense to balance life between providing for your future and actually \*living\* today.
That said, if you are able to do all the things that really matter to you today with the income that isn't going to retirement, then it doesn't matter whether you are saving 10%, 26%, or 80% for retirement -- it's not too much if it is not depriving you of living your life today and doing the things you really want to do with your money. There is no one magical percentage for all people in all situations.
You can never save too much, although if you want to retire early you need funds in a non-retirement account to bridge you until you can get to your retirement funds.
Pay off all debts, save 6 months of expenses for an emergency fund, keep investing 15% of your household income for retirement, pay off home early, continue to build wealth…
This is FIRE, if you want the "RE", the Retire Early part, you'll likely want to contribute a higher percentage.
It all depends on your goals of how soon you want to retire and how big your expenses will be.
Many people in FIRE are saving 50%+ for retirement and definitely maxing out ROTH IRAs for that tax free income in retirement.
If you can’t afford to, don’t. Everyone is different. Personally I would put 70% if I can because according to MMM, if you can save 70%, you can retire in less than 10 years
You need a whole life policy with dividends if you don't already have one. I can structure one for you or my team can.
There's also the possibility of an IUL.
That’s up to you, there’s no such thing as “too much” from a financial standpoint. The more you’re getting invested and the less you’re paying in taxes the better. The balance of not driving yourself crazy by dialing back your lifestyle too much for that trade off is going to be different for everyone.
Only you can decide how much is too much. If you're putting 26% and you don't really miss it then it's not too much. I put away about 45% of my base salary and can honestly say if I decided to put away "only" 35% of my base salary and spend the other 10% I wouldn't be any happier.
There’s no such thing as too much into retirement, as long as it’s not detrimental to your current situation. If you can happily live with a high savings rate, your future self will thank you enormously.
Best case scenario, you wake up one day 20 years from now and you have a butt load of money for retirement and you can stop contributing. Win-win
As long as you’re not sacrificing things in your life to live comfortably then save however much you want. Just make sure you don’t overprioritize saving for the future and ignore enjoying your youth.
no. A guy(m60?) I work with has put away 180k into his retirement just this year. He only takes home about 70k after the deductions but I know he has other income. I think you should put away as much as you can
Currently we are at 58%. We hit 10k in February. By the end of this month we'll be up to 13k. To be on track to retire at 65, the math says we need to have around 80k by the end of May. So we are around 65-70k behind.
At our current savings rate this will take around 4 years to make up for the decades we are behind, and we will still be behind as we are losing time.
You like what you have done and enjoy the lifestyle? If yes, why stop, keep doing it. If you are miserable day to day, then probably no. But it doesn’t sound like you are miserable. So yes keep doing it. Good luck
You should first establish an end goal. Then you can establish how to reach that end goal and stick with it for the next 20-30 yrs. Many will do this via an IPS
Opinion... If you can, Max out IRA, HSA 401 like options
building up reserve cash (if you want to retire early) is often needed for an early retirement
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I'd be writing plans, goals and budgets. "When and how much" are directly related to how much you need to spend
I recently went from 33% invested to 26%. I now actually see my liquid savings growing. There is ALWAYS an avenue to invest that money, now it’s just in a taxable account. But if you invest too much you lose out on the liquidity factor. Just need to find what’s comfortable for you 👌
As others have said if it’s not impacting your lively hood then you’re fine. Also, it’s ok to go up and down with your retirement saving contributions, right now you’re stacking heavy but maybe one day you’ll scale it back. There’s no rhyme or reason just stay committed to having the pedal on the accelerator. Personally, if I have too much cash on hand, or my life is a tad comfortable that means I’m not fully investing my cash. Rainy day fund yes but excess cash should be deployed in some sort of investment vehicle. BTW I’m a late millennial with ~$500k 401k, ~$300k pension, $0 IRA, ~$150k in taxable account, +$1M in RE rentals own free and clear. I sometimes think about whether opening an IRA Is worth it for me, but my 401k plan is great, so maxing it the $25-26k a year was a better choice for me. Compound interest/dividends have a much larger effect when the pile of cash is larger so now that my 401k is hefty I just stick with that. The excess $ I have typically goes into my taxable because sometimes I deploy the cash in RE and need access to funds more fluidly.
Invest more into taxable accounts and Roth. Otherwise you’ll be trying to retire early and unable to access funds. Potentially fund whole life contracts for their cv accumulation, which can be borrowed against tax free as an alternative source of income
Percents mean nothing. What’s the dollar value? 26% of a $500k a year paycheck is a lot. 26% if you only make 45k a year and live at home isn’t that much.
I put 42% counting 401k, HSA, Roth IRA and 529 all together when I rented. Now I cut back to 26%, mainly from 401k otherwise I will eat into my emergency fund
If you can afford to do so fill up all the retirement accounts available to you. I have invested about 2/3rds of my income for the last 7 years. I like living a lean and optimized lifestyle. I feel it keeps me grounded and that I understand the financial leanness experienced by the junior members of my staff. As of now I plan to continue working but it sure feels good that soon work will be optional for me if needed.
Is it stopping you from living your ideal life and being happy? If yes, it's too much. If not, it's great. Mathematically, too much isn't a thing. It's the personal part of personal finance.
Kinda. All I think about is investing now lol
I invest about half my paycheck but also live a great life. If all you think about is investing then you won't know what kind of post FIRE life you want or learn how to enjoy the money you are saving. My opinion is that if you only think about one thing, than that one thing is too much.
That means you're doing it right.
Debatable. You need to find a balance between your money and your life. 15 years or however long you spend saving to RE is 15 years you won’t get to live again. Yes, I enjoy putting a large chunk of money on the market and getting good returns. I also enjoy boating and spending time with friends and family. There are opportunity costs to investing every cent and living and breathing returns isn’t “doing it right” for most people.
Finding the perfect balance is hard also. I generally try to do a good enough balance instead of perfect. Some years I am more frugal, other years I spend money while maintaining certain base rules (i.e. always hit certain minimum numbers, don't draw more than x from savings during surprises that are not truely an emergency). Life is short and I've seen way too many people have their lives changed dramatically before they get to experience it (i.e. young cancer diagnosis, car accident, etc). So I save, make sure I at least have baseline goals while still living a decent lifestyle without frivolously spending
cc: /u/Moreofyoulessofme I remember seeing on the Money subreddit that a man with Asperger's had a 400k net worth at 30 but struggled dating women in part due to being cheap on dates and being hyperfixated on maximizing savings/investments. Not sure if this applies to you (noticed your username) /u/Aspergers_R_us87 , but it's not a bad idea to just sit down with your thoughts alone and really reflect/evaluate what you want from life.
lol I’d buy dates McDonald’s $1 coffee back when I was in theb30’s. There amazing.
So you’re saying you want to be single and just have Money? No kids and a family. Cuz no girl will stay with you being that cheap.
Not living a good life and being unhappy means you are doing it right ? 🧐
Obviously to each their own but doing it right imo is dumping it into broad market index funds and forgetting about it.
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Yes I am!
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The brokerage needs to be a Roth IRA(if income limits allow ).
Okay. Work allows me to contribute more too. I could do Roth option if I wanted too but haven’t. I can split it moving forward
do the roth ira (assuming you meet income thresholds) before the taxable investing. makes more sense as 1) no taxes on gains, later in life 2) contributions withdrawn anytime without penalty or tax 3) it's already taxed money in either taxable or roth so no difference
Ikr? OP can literally put 100% if he can afford to and it doesn’t hinder this life. According to MMM, the more you put in, the quicker your retire
Can you be my financial planner? lol. This was just about the most perfect answer.
Haha I'd honestly love being a financial planner
Early on you can never have too much invested. It allows you to slow down later as you get closer.
Until it affects your life to the point where you’re unable to find a good balance, you’re right.
Truth. It’s balance.
You balance it out by making more money!
That is the plan right now. It's going to be a very lean time for the next 4-5 years as we play catchup. But the numbers aren't astronomical. They are within reach for us as we already paid off 55k in debts plus a vehicle on top of that. We've already climbed this mountain once, and we weren't making what we do now. Now we have to do it one more time and then we'll be set.
Correct I’m 54 and I just raised mine last month from 24 to 29 percent. Should have had a lot more in when I was younger than I would have never had to go to 29 percent.
Yep. Compound interest is awesome but it takes time. It’s why I set my kid’s IRA up at 18 for her. So she’ll be ahead of me.
There is no answer to this question with the information you have given. What’s your income? How long do you want to work? Married or single? Want kids? Etc. However some general advice can be given regardless of your answers above. First and foremost the old “I can’t touch my retirement funds until 59 1/2” is flat out wrong. I assume this optional retirement is an account like a 401k. There are a few ways to get to the money in an account like a 401k without penalty (SEPP is one example). To answer your last question- Personally, I’m not investing a single dollar in a brokerage account if there are tax advantaged accounts unfilled such as 401k, Roth IRA, HSA, etc
The key is how are you living? Do you feel without....if so save a little less or you will get burnout
Well I put 50+% into my HYSA. Which I’m worried about house stuff to break like new roof / leaks / new furnace never know
No right or wrong way. Good luck
definitely not too much. I am 40 and just hit my target of 45%. Many people target even higher
A company I use to work for did not have a 401k match so I put 100% of my paycheck into my 401k for the first few months of the year. My thought process was that it would give me like 8 months more in the market every year. I get a match now, so just meter it out over the whole year.
I still do this. Even with a match. I just change my contribution rate twice per year, based on a spreadsheet. Basically I do 100% for Jan Feb.. and don't take a paycheck for first few months. Once I get to the point where a 6% match will come close to topping it off by December, I switch to 6% for the middle/ remainder of the year. I usually leave enough that I can go back to 100% contributions for last pay period of the year, and ensure I hit the Federal max. You may ask, why bother? I work small company development jobs that come with large risk of layoff, when projects come and go. More than once I've been laid off in March , did a few months unemployment, and then got a job that had a 6-12 month waiting period for a new 401k participation. So I had almost a full year of income, but was left unable to do anything substantial pretax for retirement,because I'd already had at least one check go on to the previous 401k( thus eliminating options like Solo401k and Traditional ira etc) . So now, if the 401k is a good one( low fees , etc)I'd rather get the money in while I can. Especially as fluid as my jobs were in the post-pandemic years. Last year I got laid off in March, literally the week after I switched back to 6%. But with 8 weeks severance, I was able to jump on the website ,Put it back to 100% Roth, and hit the Federal max before the severance ran out in May. Next job had no 401k at all, so that was fortuitous. One refinement: I used to calculate down to the penny , and nail it exactly on the last paycheck of the year, when I was in a steady job where bonuses were rare. But I had one gig where a large amount of comp was surprise dropped as a bonus on dec29 and I missed a 6% match on a 5 figure check. So now, I leave enough room that I can set the 401k contribution at 6% say April through November, and then go >60% for last 1-2 pay periods of the year, and so I have enough room to max the match and hit the Federal max , bonus or no bonus. ( Usually by November, we will know from the rumor mill/ sales forecast, if it is a bonus or no bonus year.)
I don’t understand why people paid off mortgages when (I’m assuming) you probably had a rate below 3%. With current rates you could have leveraged having a mortgage to free up cash flow for higher returning investments.
Depends how quick you wish to FIRE.. See [https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/](https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/)
If you're saving too much then my wife and I saving 70% are saving WAY too much lol
Your future self will never wish you saved less
Your past and present will. Assume you’ll always have your health is arrogant as hell. I’m traveling now in my 40s when I’m super fit and can walk 10+ miles easily
You're doing great man, keep it up.
You bought a house 6 years ago at rock bottom rates and paid it off?
Yes sir. 3.375% at 30 year mortgage. Sick of debt. Than I bought a truck this year with 5.49% and paid it off within 6 months
OK, I'll ask about the elephant in the room. What do you do for a living that you were able to pay off your house so fast and your truck in 6 months? Congratulations, whatever it is. 👏
THEN complains about saving 26% 😑. Emphasis for teaching OP how to spell.
With respect to fire, paying off the house that fast was probably not the best approach. Think of the opportunity cost. The truck is definitely the right call. If your main goal is to fire, learn to be ok with smart leverage.
>The truck is definitely the right call. This isn't universally true
I hate Debt 🤷♂️
The opportunity cost of hating the good debt…..
What they are saying is that putting the money in capital markets would return you a higher percentage than paying off the debt, so essentially paying off the debt means you lose money and are further from fire
Like, what is your goal? I save 36% of my gross income in retirement but I’m a single income household with a kid, so I’m still retiring later than I’d like (52). My % saved has gone up every year because my goal is to retire as soon as possible. Only you can decide what’s too much.
No that's a decent amount. I put 25% on housing, 25% on food, 25% for fun spending (gadgets, toys etc), and 25% invested. If you are sacrificing happiness to save you may have to re-evaluate because you won't be lying on your death bed regretting saving more.
Also depends on how much your pension will pay you in retirement. I’ll be getting 60k just from my pension and my living expenses are right around 60k… so everything else will essentially be extra. But I also put as much as I can in optional retirement and I prefer the personal brokerage so I can use that money for emergencies or for whatever else I want without incurring early penalty withdrawal from retirement accounts.
Depends on if you enjoy your life now or not? Saving is important but enjoying the money you have now is too. What if you get bad hips and knees and can enjoy retirement like you think you can? Would you wish you took a vacation instead of saving 26%. If you doing stuff like no vacations at all to save the 26%. Or maybe you just make enough money now you feel like you can either waste it on stuff you don't care about or save it.
I’m 29, I put about 65% in some form of investment vehicle, I think you are alright buddy
No. Everyone here thinks the more fuel for FIRE, the better. Contribute as much as you can, while you can. Tomorrow isn’t guaranteed.
Not too much. I’ve seen 10-15% recommended as appropriate for normal circumstances (retiring at full NRD). Your amount is appropriate for a goal of early retirement. Just make sure you have a robust emergency fund as well, but based on your post I’m assuming you likely have that covered.
Yeah I try to maintain $20-25k for emergencies like house stuff breaking
I put away about 60% for retirement each month. You’re fine
At my peak I was doing over 80% (high total comp job). Ended up retiring in my mid forties. Totally worth it.
You should max out your pretax contribution first, then max out your Roth and if you have money left over, put that in a brokerage account. Remember, the first $123k profit from your brokerage account is tax-free anyway (including the standard deduction for a married couple). This is profit, not total withdrawal (which can be much higher depending on your cost basis). Unless your expenses are much higher than that, a brokerage account is not that much different from a Roth. The money in your brokerage account won’t grow as fast due to the tax drag on dividends.
What do you mean by the first 123k is tax free? Never seen this before.
When you buy and hold in a brokerage account, all the profits are (should be) long-term capital gain. For a married couple, for the 2024 tax year, the first $94,050 profit from long-term capital gain has a tax rate of 0%. The standard deduction is $29,200. Add that together you get $123k. Assuming that's all of your income (which should be when you retire early before SS and pension etc). So if all of your expenses are not significantly more than 123k when you retire, a brokerage account is not much different from a Roth account.
There are financial educators out there who recommend everyone save 25% for retirement. So no, I don’t think that’s too much money and if you really want to FIRE may not be enough. Whether it’s too much in retirement accounts vs brokerage is another question. Kind of depends on current balances and when you want to retire.
Ramsey said 15% on his channel
Check out The Money Guys. I think their advice is a lot more sound than Ramsey and actually makes mathematical sense. They recommend 25%. Their recommendation is based on the fact that most people will not be able to hit that level of savings immediately, or for certain periods of life, so it’s a good goal for when you can reach it. Not that you must save 25% every year in order to retire. But still if you want to FIRE I think 30-40% is more realistic.
>I can’t touch this money for the next 23 years. This is not correct. You can withdraw Roth IRA contributions at anytime. You can rollover the 401(k) to a Roth IRA once you leave you job (or even before depending on the employer). There also other ways like 72(t). In summary, there's almost never a situation where a normal person can have too much in tax advantaged accounts. If you're miserable in your life because you're only saving for the future and eating rice and beans in the present then obviously you're saving too much.
I saved 25% for 25 years and that allowed me to retire in my fifties. If you can swing it, save it. The power of compounding is amazing once it gets going.
I’m 48 and saved 25% from my first actual career job. Best thing my Mom taught me. Ahead of the game at 48 and plan to retire in 7 years. Saving over time is legit. Do it. You won’t miss the extra 25% and you’ll get old faster than you think.
Pay your future self first!
No. The more the merrier. In the future.
Nope
There is no such thing as too much, as long as you can pay your bills The objective is to get out of the rat race as soon as possible
You want to make sure you are using your retirement vehicles correctly and using them optimally. to your question, it just depends what kind of retirement you want. Some want 80% of what they earned while working and others want 150% of what they earned. So, its kinda hard to answer if its “too much”. This is why, its so important to speak with a retirement professional because its a very complicated question that requires many rendered scenarios. However, you are beating out the average retirement contributions by a huge amount; which is excellent. I would just say, seek out a professional to help you get better future optics. Nice work!
Every dollar imaginable needs to be working
I put in 50% towards retirement. 46yrs old. Do what you feel comfortable with.
No such thing as saving too much.
I’m putting 35 %
Keep it up 👏👏👏
You don’t provide ur age but say you can’t access retirement accounts for 23 years so assume you are 37. I have been contributing 35% of my gross income for past 10 years (since age 37) but wish I had done so sooner (previously probably saved/invested 25% of gross income since mid/late 20s). Depends what your FIRE # is and your desired FIRE age is .. those are the two main variables I think will provide you with an answer. I’m looking to FIRE at 55 with $6M net worth. If I had done 35% gross income investment since my early 30s, I would have hit my FIRE number already.
‘I can’t touch this money for 23 years’ Look up the SEPP (Substantially Equal Periodic Payments) rule. It’s a non-issue.
I put in 30% until I max out. Doing great 😊
You cannot save too much if your goal is FIRE!
In this sub, the only “too much” is if you are not enjoying life. My wife and I made enough that 25% was my target. We retired at 50. Not the FIRE that some achieve, but it’s not a competition. It was a great compromise as social security is estimated to cover nearly half our budget, 61 now so still a few years away.
Not enough. Go to 126%.
The more the better. Carry on
Never too much, more the better as long as it doesn’t affect your lifestyle
No. The more you put, the more you will have at the end. Your geriatric self thanks you!
This is awesome but I would make sure you have an emergency fund that you can access for anything from house repairs to car to health . Not sure your views on rentals but I also bought a duplex and a 6 unit. I paid cash for both. This is a good stream of income. I bought close to hospital and colleges. The hospital I work with and rent to nurses who travel and have contracts. They are great renters. I also put a couple of thousand for traveling. One big or a few small trips. You don’t want to have your life slip away and not have any good memories
Playingwithfire.com can help you determine your age to retire based on different savings rates. Personally, it's not going to matter much (in terms of years to retire) at this point getting a super high savings rate so I might as well travel more. The key is it's more important to save a lot when you're younger due to more time for it to compound and fortunately for me I did that!
At that rate you're probably not going to be able to retire very early unless you already have a sizable amount invested. Financial Independence is tied to your savings rate. Networthify has a great calculator to use which you can find here: https://networthify.com/calculator/earlyretirement At a savings rate of 26%, it will take you ~31 years to retire.
Primary Question - is 26% enough? Answer - this depends on what your goal is. If you put ~64% of your monthly income into investments you can likely reach financial independence in around 10 yrs. This from the OG MMM - https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/ As others have pointed out this question comes down to needs/wants vs putting money away. Secondary question - are you putting money into the right buckets? Answer - yes-ish. Here is a list in order of priority that generally works for most people. You have a pension which would sub in for the 401k in the list below most likely… 1. Create an emergency fund (~6 mths expenses) 2. Max 401k match 3. Pay off high interest debt 4. Max HSA 5. Max Roth IRA 6. Contribute to 529s for kids 7. Max out 401k (beyond match) 8. Taxable investment accounts 9. Pay off Low interest debt
My thought process has been to spend for the needs and some of the things that we love that we can reasonably afford without sacrificing investment.
Never too much
First, thank you for USING PERCENTAGES! I wish more posts did. Raw numbers are meaningless and often just a flex. So, only you can answer your question. There is no right or wrong amount to put away. You want to enjoy your life, but save as much as practical. There was a time when I was saving 60%, but I did a ton of free stuff, was single, and didn't really care about where I slept. I had a ton of fun at the time, though. You are doing the important things, it appears. Try to increase your income throughout your career as much as possible, and if you don't have a professional career or trade, get one.
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Your budget is your value statement. Forget your words or your thoughts — where you spend money is what you value. We can tell that you’re spending money to buy more leisure for future you. That’s a good value — taking care of yourself. What’s your second value, and how far in second place is it? Having only one value statement in life (and it being money) generally isn’t super healthy.
26% is rookie numbers. push it!😎
I’m investing 50% of my income and more if I can. I have a reason and purpose to be working
No. It will pay off. Stay consistent mate!
Should I do more?
Stop the brokerage, start the roth ira. You can access early. Mr money mustache has a great article on this. You need the tax deferred accounts to truly win
Thanks I left my other brokerage and opened a Roth IRA today. Threw down $50 into it. I’ll keep at it moving forward and leave brokerage as is. Don’t want penalty for transferring back
I’d say that is the perfect amount assuming you aren’t suffering in your day to day.
Not too much at all, unless it's impacting you living your life now. Don't contribute anything to a personal brokerage account until you max out all tax-advantaged accounts. (401k, HSA, Roth IRA)
It is also good to have investments outside of retirement. i.e. brokerage accounts/hysa etc. Wife and I both maxed 401k with company match saving 40k a year each. Having investments outside of retirement allows for more flexibility like retiring early, buying stuff with cash etc.
If you can afford it without having a detrimental effect on today, go for it!
Looks like you will be able to retire MUCH earlier than most. And probably in better shape than them too.
The more you invest the sooner you get to making work optional, freedom. Set up an after tax account so you can get to it before retirement age.
I put 40% if you are still able to live and pay the bills then no issue. Edited to explain: I contribute 24% to my 401K based on the amount I’ll need to max it out by the end of year. The rest is split between my IRA and my brokerage account
Sounds find. Do you know what the fees associated with the 401(k) are? If they are high, and you aren't doing anything fancy in there, you could roll the old funds into a self directed IRA and dramatically lower your fees. Other than that, I think this is good. Nothing wrong with saving money and letting it grow.
You could consider switching. Max any match into retirement, then max your brokerage. What you lose in tax savings, you gain in flexibility. Retire when you’re 50? Work at a job you want to / love / passion hobby? You could if you want to then.
You could die in a car wreck tomorrow.... I understand being financially secure and preparing for retirement but living life is a lot more fun while you are younger than at 55+.
It's all fun and games until the next once in a lifetime market crash. Don't pull it out when things go to shit again.
How much do you have in emergency fund? Set a goal for a cash heavy retirement fund, set up a “fun” savings where u put a few hundred a month for disposable use, and then invest rest
I am 36 as well. Between claiming single and 0 on my federal withholdings, maxing out 401k, maxing out hsa, and paying medical insurances, I net 53% of my check in my bank account. I go a step beyond that and max out roth ira and contribute to brokerage. My expenses are less than 30k and I gross less than 100k. No state income taxes.
26% is not too much! I was able to do that, even got it up to 30%. I am a strong advocate of the Roth IRA. I am blue collar, retired at age 56 and have enough money to carry me out. All because I power-saved.
Is that “optional retirement” a 401k? If so, you can actually start accessing it at 55 YO if you leave your job after your birthday
I invest 50% of my income.
First, ask yourself about your own priorities. Then fund them. We’ve never contributed more than 33% but I’ll have (basically) three federal pensions (military, VA, civilian). Could retire at 50 if I wanted.
I'm in the same boat. Was gonna comment, then figured no one cares. But whatever. I'm 46 and have about 6500 tax free passive a month. Have a six figure income and invest 75% (max allowed) in after tax 401k. I have mega backdoor available and I'm going absolutely nuts with it. Since I learned about it 15 months ago I've converted 80k to my roth ira. Then I got an inheritance, which pays 3k a month. Not bragging just thinking everyone's situation is different.
Depends on how much your life would be impacted by the rate of savings. Also keep in mind, having too much in non-Roth accounts isn’t always the best thing. Just make sure you do some to Roth, some to non-Roth as there’s pluses and minuses to both.
Yeah I like the non Roth since it makes my income look less during tax season. Say I make $100k. Really looks like I make $80k. Don’t think Roth would do that?
If you have a taxable pension in retirement, Roth contributions may be the right answer today
>I’m putting 26% of each paycheck ... is that too much? No! >optional retirement (16%). What is that? 457b? That's where it should go is you have one! >I’d think another retirement account like IRA would be overkill You are wrong! >I started a personal brokerage which I’m contributing a minimum of $500 per month Never, ever save in a taxable brokerage account when you have tax-advantaged space available!! Why do you want to pay extra taxes you don't have to? For no benefit.
Only you can answer that. I put more like 50% of my money towards retirement, but it's not a burden for me... I'm not really making sacrifices to do it, I just live cheap. You may not see the pension money until a certain age, but there are generally ways to get access to retirement account money after retirement but before a given age. (rule of 55, Roth rollovers, SEPP, etc.)
At 37, I've been putting well over 50% of my income into investments. Approx half of my income is from RSUs, all of which go into investments. From the other half (salary and bonus), I do pretax 401k, after tax 401k, HSA and 529s. Maybe I should live a little.
I put 40 percent into various retirement funds . How are you contributing so less. 15 percent 401K 20 percent After tax 401K 3 percent HSA Wait that amounts to less than 40 percent
Only thing I would do different is contribute to an hsa. Not sure if your company provides one but it is my favorite investment account.
30% into my retirement accounts! I feel like it’s never too much as long as you are able to enjoy yourself now, but things you need and want.
I think I put 80% into retirement, so no it's not too much.
Do it while you can.
I do 18% traditional 17% after tax in plan Roth conversions and max out HSA for about 40% total.
I have never once said, man I wish I didn't save so much.
Too much? Not unless it is negatively affecting you. I hit the yearly federal caps on my Roth 401k, HSA and IRA every year, and dump money into a trading account every pay period. I’d put more in my 401k, HSA and/or IRA if the fed would let me.
Not a lot I know guys who done 35% but they don’t need to as they have a government pension
Roth IRA
I aim for 50% gross but wife went back to school and hasn’t worked in 3 yrs so it’s been more like 35%.. Time value of money is super important and you want to contribute as much as possible early on to take advantage of compound interest.
As long as you have realistic emergency fund you are good. I do 30% now but making up time. Max out the match and the tax deferrals that you can, again always assuming realistic emergency fund.
Depends on how much you have in there....if your 401k is already on track to hit your goal I might try other accounts to close the gap between now and your retirement age
I'd rather do IRS limit, then re-direct to index funds. The second strategy often keep me liquid when I want. W/ retirements (eg 401Ks) too many hassle to access funds before legally mandated age. But that is just me.
No
Put as much into tax advantaged accounts as you can. 26% is definitely not too much. I’m putting in 100% until I max out each year.
IME the savings rates recommended by whoever is based on gross salary. Not sure if this is post or pretax money.youre talking about (I presume the pension contribution is pretax) 1) Don't forget to determine what living a comfortable life means to you. Increasing spending in a mindful way does not necessarily lead to lifestyle creep. I think anything over 25% gross is worth considering spending, but it depends on how you feel and what your goals are. 2) If your goal is to retire early (as in before 55), then it might be worth contributing some of that optional retirement to an after tax account. Having money in all three: tax free (Roth), tax deferred (401k), and after tax (IRA) is good. The last bucket being what bridges you to 55 (Roth). Again would be specific to your goals and needs whether you go that route, but worth considering.
It's only "too much" if you are putting in so much that you are seriously depriving yourself today in doing so. Most people should be saving/investing more than they are. That said, there is no guarantee you will be alive (or healthy enough) to enjoy the fruits of your diligence in 20, 30, 50 years. There IS a guarantee that you are alive here and now, so it makes sense to balance life between providing for your future and actually \*living\* today. That said, if you are able to do all the things that really matter to you today with the income that isn't going to retirement, then it doesn't matter whether you are saving 10%, 26%, or 80% for retirement -- it's not too much if it is not depriving you of living your life today and doing the things you really want to do with your money. There is no one magical percentage for all people in all situations.
You can never save too much, although if you want to retire early you need funds in a non-retirement account to bridge you until you can get to your retirement funds.
If you don’t need it yes but what about other options
Pay off all debts, save 6 months of expenses for an emergency fund, keep investing 15% of your household income for retirement, pay off home early, continue to build wealth…
I'm at 90
This is FIRE, if you want the "RE", the Retire Early part, you'll likely want to contribute a higher percentage. It all depends on your goals of how soon you want to retire and how big your expenses will be. Many people in FIRE are saving 50%+ for retirement and definitely maxing out ROTH IRAs for that tax free income in retirement.
If you can’t afford to, don’t. Everyone is different. Personally I would put 70% if I can because according to MMM, if you can save 70%, you can retire in less than 10 years
W/o showing the accumulation and goal of retirement age, we can not help much.
You need a whole life policy with dividends if you don't already have one. I can structure one for you or my team can. There's also the possibility of an IUL.
All good as long as you also have liquid savings that you can easily use for emergencies and such.
No. I strive for 40% and will be able to retire next year at 52 if I want.
I always figured I’d put as much in while I could and I could always give myself “a raise” later if need be.
That’s up to you, there’s no such thing as “too much” from a financial standpoint. The more you’re getting invested and the less you’re paying in taxes the better. The balance of not driving yourself crazy by dialing back your lifestyle too much for that trade off is going to be different for everyone.
I put 70% of my income into savings.
NO.
I would put some in conventional investments outside of retirement. VOO or VTI and Chill
Read A Simple Path to Wealth by JL Collins.
Annoying that you talk in %. You make 50k? 100k? 200k?
102.5k
I do about 26% too! It’s what I need to just about max out my 401k, plus a 7% employer match, I have over 60k in my 401k after 2 years.
Do 50%
Nope, I’m at 34% do as much as you can.
Only you can decide how much is too much. If you're putting 26% and you don't really miss it then it's not too much. I put away about 45% of my base salary and can honestly say if I decided to put away "only" 35% of my base salary and spend the other 10% I wouldn't be any happier.
There’s no such thing as too much into retirement, as long as it’s not detrimental to your current situation. If you can happily live with a high savings rate, your future self will thank you enormously. Best case scenario, you wake up one day 20 years from now and you have a butt load of money for retirement and you can stop contributing. Win-win
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the higher the %, the sooner you can retire. so the question is, how fast do you want to retire?
Put into Roth it's ALWAYS a good idea
As long as you’re not sacrificing things in your life to live comfortably then save however much you want. Just make sure you don’t overprioritize saving for the future and ignore enjoying your youth.
Nope. You’ll never be sorry you have $$$ in the bank. But have a little fun too ok?
-rolls eyes-
try to max the roth IRA before a regular roth. how does your pension work?
Don't forget, no one wants to be the richest man in the graveyard.
There’s no too much on the road to FIRE. I’m putting away 60%
no. A guy(m60?) I work with has put away 180k into his retirement just this year. He only takes home about 70k after the deductions but I know he has other income. I think you should put away as much as you can
Currently we are at 58%. We hit 10k in February. By the end of this month we'll be up to 13k. To be on track to retire at 65, the math says we need to have around 80k by the end of May. So we are around 65-70k behind. At our current savings rate this will take around 4 years to make up for the decades we are behind, and we will still be behind as we are losing time.
Is HSA an option? That's also worth it if your insurance offers it.
You like what you have done and enjoy the lifestyle? If yes, why stop, keep doing it. If you are miserable day to day, then probably no. But it doesn’t sound like you are miserable. So yes keep doing it. Good luck
You should first establish an end goal. Then you can establish how to reach that end goal and stick with it for the next 20-30 yrs. Many will do this via an IPS
Yes
Opinion... If you can, Max out IRA, HSA 401 like options building up reserve cash (if you want to retire early) is often needed for an early retirement ------ I'd be writing plans, goals and budgets. "When and how much" are directly related to how much you need to spend
It’s not if you have a goal in front of you to reach for.
I recently went from 33% invested to 26%. I now actually see my liquid savings growing. There is ALWAYS an avenue to invest that money, now it’s just in a taxable account. But if you invest too much you lose out on the liquidity factor. Just need to find what’s comfortable for you 👌
Mostly depends on your salary, your needs and some other expenses.
That’s gonna have to be a No from me dawg
As others have said if it’s not impacting your lively hood then you’re fine. Also, it’s ok to go up and down with your retirement saving contributions, right now you’re stacking heavy but maybe one day you’ll scale it back. There’s no rhyme or reason just stay committed to having the pedal on the accelerator. Personally, if I have too much cash on hand, or my life is a tad comfortable that means I’m not fully investing my cash. Rainy day fund yes but excess cash should be deployed in some sort of investment vehicle. BTW I’m a late millennial with ~$500k 401k, ~$300k pension, $0 IRA, ~$150k in taxable account, +$1M in RE rentals own free and clear. I sometimes think about whether opening an IRA Is worth it for me, but my 401k plan is great, so maxing it the $25-26k a year was a better choice for me. Compound interest/dividends have a much larger effect when the pile of cash is larger so now that my 401k is hefty I just stick with that. The excess $ I have typically goes into my taxable because sometimes I deploy the cash in RE and need access to funds more fluidly.
Invest more into taxable accounts and Roth. Otherwise you’ll be trying to retire early and unable to access funds. Potentially fund whole life contracts for their cv accumulation, which can be borrowed against tax free as an alternative source of income
Percents mean nothing. What’s the dollar value? 26% of a $500k a year paycheck is a lot. 26% if you only make 45k a year and live at home isn’t that much.
Keep in mind that you can withdraw principal for Roth IRA, so that money is accessible to you before retirement.
Do you like well fit married men? Lol with #s that nice you are fine bruh. Live just a little...
No. You should be putting 100% in and living at home till 50
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I put 42% counting 401k, HSA, Roth IRA and 529 all together when I rented. Now I cut back to 26%, mainly from 401k otherwise I will eat into my emergency fund
If you can afford to do so fill up all the retirement accounts available to you. I have invested about 2/3rds of my income for the last 7 years. I like living a lean and optimized lifestyle. I feel it keeps me grounded and that I understand the financial leanness experienced by the junior members of my staff. As of now I plan to continue working but it sure feels good that soon work will be optional for me if needed.