Not fully funding 401k? Why not?

[Anonymous]

I think your questions seems a littttttle disingenuous because it seems braggy?

Fully funding a 401K at 24 is pretty exceptional and rare. Being gobsmacked that circumstances could change is naive. Asking why seems obvious: people don't fully fund their 401Ks because they can't, or don't care enough, or don't need to.

[Anonymous]

I've always rented cheap apartments so I could max it out. Even when I made 60k I put the 18k in.

Dh doesn't like to and I can't change his number so through his work so he only puts 10k in. It is what it is.

[Anonymous]

A lot of people reduce contributions during those 5-10 years in which daycare expenses are at their highest. Most people hit that point of life in their 30s, which means they also typically carry a newish mortgage.

As daycare expenses go down and mortgage becomes a lower percent of a household's income, people are able to dedicate more resources to funding retirement.

It really is a simple as that, this is a wealthy area so we often lose sight of this, but very few people can afford daycare + mortgage while deferring $18,500 of income.

[Anonymous]

I don't max mine out because I assume my tax bracket will be higher when I retire than it is now. Right now I have a fairly big mortgage and a dependent. In 20 years when I retire, I might not. All that 401K savings will be taxable upon withdrawal.

I do put 15% of my income in my 401K, but I think it's a good idea to invest in a 401K up to the match, then max out a Roth-IRA, then go back and fund more of the 401K.

[Anonymous]

I found this excerpt from an article in Business Insider:

"In fact, according to data from Vanguard, just 4% of people earning below $50,000 a year max out their 401(k) at the current limits, and 11% of people who make between $50,000 and $100,000 do. People making over $100,000 are the most likely to max out their 401(k), perhaps unsurprisingly, with 32% making the highest allowable contribution."

[Anonymous]

Anonymous wrote:

Anonymous wrote:Is it really that inconceivable that not everyone's budgets allow them to max out their 401k every year?

I think a better question would have been to direct that at high income people. Obviously someone making 100k or less might not be able to contribute max, but what baffles me is upper income people making 150k+ not contributing the full amount, or even worse those in the 250k range.

I don’t know why you would be baffled when you don’t know what people’s expenses are. We have two kids in private school, which eats up $50K plus a year. No, public school is not an option. We have a second home I inherited that we are trying to sell because it’s too expensive to maintain with tuition costs and having to pay for college for twins in a few years. So, you are really ignorant and uninformed.

[Anonymous]

I make $50k a year. If I maxed out I couldn’t eat or pay rent. Are you too dense to understand not everyone makes six figures?

[Anonymous]

Anonymous wrote:I found this excerpt from an article in Business Insider:

"In fact, according to data from Vanguard, just 4% of people earning below $50,000 a year max out their 401(k) at the current limits, and 11% of people who make between $50,000 and $100,000 do. People making over $100,000 are the most likely to max out their 401(k), perhaps unsurprisingly, with 32% making the highest allowable contribution."

Anyone else find these numbers much higher than expected? These numbers seem way too high to me.

[Anonymous]

daycare.

[Anonymous]

Because i can’t afford it, is it really that hard to comprehend?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Is it really that inconceivable that not everyone's budgets allow them to max out their 401k every year?

I think a better question would have been to direct that at high income people. Obviously someone making 100k or less might not be able to contribute max, but what baffles me is upper income people making 150k+ not contributing the full amount, or even worse those in the 250k range.

I don’t know why you would be baffled when you don’t know what people’s expenses are. We have two kids in private school, which eats up $50K plus a year. No, public school is not an option. We have a second home I inherited that we are trying to sell because it’s too expensive to maintain with tuition costs and having to pay for college for twins in a few years. So, you are really ignorant and uninformed.

Cry me a river. You are the typical spendthrift who is outwardly rich and inwardly poor. Probably no better off than the poster making 50k/yr.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I found this excerpt from an article in Business Insider:

"In fact, according to data from Vanguard, just 4% of people earning below $50,000 a year max out their 401(k) at the current limits, and 11% of people who make between $50,000 and $100,000 do. People making over $100,000 are the most likely to max out their 401(k), perhaps unsurprisingly, with 32% making the highest allowable contribution."

Anyone else find these numbers much higher than expected? These numbers seem way too high to me.

Sounds right to me. I bet if you further break it down to higer income over 50% are maxing out who make over 200k. Its the other 50% who are the dumb dumbs.

[Anonymous]

DH was stage 4 of a serious illness (not cancer) and I had daycare. Went down to 3% or whatever the company matched. Have been building back since. Shrug. I did what I had to do to get by. I also sold stock at $65 that would be worth $170 today...

[Anonymous]

Anonymous wrote:I've always rented cheap apartments so I could max it out. Even when I made 60k I put the 18k in.

Dh doesn't like to and I can't change his number so through his work so he only puts 10k in. It is what it is.

Where would you be able to rent today on 60K and save 18K a year in a 401K? How is this relevant to someone today with student loans and other day to day expenses in DC?

I've saved anywhere from 5% to the max over the past decade (I'm 34). I opted to take on a cheap mortgage 10 years ago instead of cheap rent and now live in a place I couldn't afford to lease today. I'm contributing 10% now.

I'm sure most people on DCUM will be fine in retirement.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I found this excerpt from an article in Business Insider:

"In fact, according to data from Vanguard, just 4% of people earning below $50,000 a year max out their 401(k) at the current limits, and 11% of people who make between $50,000 and $100,000 do. People making over $100,000 are the most likely to max out their 401(k), perhaps unsurprisingly, with 32% making the highest allowable contribution."

Anyone else find these numbers much higher than expected? These numbers seem way too high to me.

Those are probably people married with high income spouses who don't need the income. Folks who don't have to work.