WDYD after you max out 401k

[Anonymous]

Dual earners here - but I contribute 10% of my salary to my 401k.

I guess you can guess my salary now but I maxed out the 401k at the end of Sept., so I have 6 paychecks in Oct / Nov and Dec that give me back that 10%. In the olden days I used to just spend it but I’m trying to do something better with it now.

We don’t need to save more for retirement - between what I put in and what my husband puts in - we are investing 20% of our income to retirement accounts.

I used the 10% from Oct and will put the 10% from 1st paycheck in Nov to pay off my student loans then I’ll be done! (Don’t worry I take out the taxes now - it’s 10% now minus taxes).

I’m leaning towards putting the 10% for last paycheck in Nov and all of Dec to our kids’ 529s but just wondered what others do. My husband doesn’t care what I do - but he’s the saver and I’m the spender fwiw.

[Anonymous]

Debt, 529s, Roth, stocks, mortgage, fun.

[Anonymous]

I'd do 529s and then vacation.

[Anonymous]

How do you know you don't need to save more for retirement? Just bc you are contributing 20%? Or do you have like 5M+ NW? We max 401k, backdoor ROTH IRA, then taxable brokerage. Also could check if your employer has mega-backdoor ROTH post-tax contribution options. If you are all set with your numbers, then you can invest in real estate or invest in classic cars or a hobby or just donate to charity and do something good!

[Anonymous]

While you save in 529 and 401k, there are people out there who make 30-50%+ a year tax free inside of a Roth IRA. All depends on what they buy in it.
Your money inside of 529 and 401k with fees grows slowly, but I understand why you do it and why millions of other do it. The companies have pushed it down on everyone so they can make money off of you.
You are missing out on a lot of tax free growth and the knowledge and experience how it's done. You also cannot pass down the knowledge to your children as you never acquired it.
You will pass down the 401k and 529 knowledge which is fine, but painfully slow way to grow your money.

[Anonymous]

My nov/Dec is what contributes to the back door Roth. I want to retire at 55 and 45 now.

[Anonymous]

Anonymous wrote:My nov/Dec is what contributes to the back door Roth. I want to retire at 55 and 45 now.

If you want to retire at 45, you need to put in a brokerage account, not Roth.

[Anonymous]

Anonymous wrote:While you save in 529 and 401k, there are people out there who make 30-50%+ a year tax free inside of a Roth IRA. All depends on what they buy in it.
Your money inside of 529 and 401k with fees grows slowly, but I understand why you do it and why millions of other do it. The companies have pushed it down on everyone so they can make money off of you.
You are missing out on a lot of tax free growth and the knowledge and experience how it's done. You also cannot pass down the knowledge to your children as you never acquired it.
You will pass down the 401k and 529 knowledge which is fine, but painfully slow way to grow your money.

This is the OP. I make too much for regular Roth. I would have to do backdoor Roth if I do Roth.

[Anonymous]

I am in the same boat. I maxed out in September too. My paycheck goes up this few checks left

[Anonymous]

Isn’t brokerage the easy answer? We do an s&p 500 mutual fund for what we save beyond the max retirement and 529.

[Anonymous]

529

[Anonymous]

Anonymous wrote:Debt, 529s, Roth, stocks, mortgage, fun.

Dp. In that order

[Anonymous]

Seems like 529 it is… thanks all. I don’t think I’ll regret it.

[Anonymous]

we also max out our 401ks. I also have a megs roth through my company and i contribute the max to that which is 32k. We then do direct deposit of 1.5k per paycheck into wealthfront (robo investors). That’s all. we are done turn 529, especially since kid #1 got a full ride. That basically left a major surplus for kid 2. We are 47 and feel we are in a good place to quit at 59.

[Anonymous]

Does your employer not match or true up your matches? If not, you are leaving money on the table and should adjust your withholdings accordingly.

If you are only putting 10% to 401K, how are you putting 20% to retirement if you aren’t doing a backdoor Roth (or I assume mega backdoor).

Anyway, if I really didn’t need the money for retirement, I would put some into index funds and spend the rest. But at your level of income I would consider diversifying your retirement portfolio beyond 401Ks (HSA, backdoor Roth, mega backdoor Roth if available).