Not fully funding 401k? Why not?

[Anonymous]

I'm just getting my first 401k at 32 (thanks to grad school and postdoc type work that didn't offer them), but my spouse is out of work so I'll be supporting our family with kids on $68k gross until we are a two income household. I definitely won't have $18k to spare, but I'll put in up to the employer match.

[Anonymous]

Anonymous wrote:

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.

I don’t max it out to the $18.5k as I am considered a “highly compensated employee” at $120,001 per year and am limited alto 5% of earnings - not even enough to get the full employer match.

[Anonymous]

I have no job, but when I did, I maxed. I'm into delayed gratification and bought a much cheaper house than I qualified for.

[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.

Yea, they seem incredibly high. I’m wondering if Vanguard tends to work primarily with well established professional roles and the white collar blue collar divide would look different. I.e. sampling bias.

[Anonymous]

You’re an idiot, OP. Also LOL at the poster who said, I maxed out even when making $60k. I made $28k at my first job out of college and had to take a second job to pay for expenses. When you put yourself through college, you often come out with student loan debt. I worked two and three jobs at a time my first ten years out of college to pay off my student loan debt and save up for my down payment on my house. So I just started putting in the max at 34 years of age.

Please go somewhere else with your judgement.

[Anonymous]

Recently I hit an income that would allow me to max out and not miss the $$$. I don’t max because I:

(1) am waiting for a market correction;
(2) don’t get a match because my employer offers a pension;
(3) bought a fixer upper, so I sink extra money into my house

Currently contribute 10% and have a decent amount of cash on hand. I’m 35 with a child in daycare, so plan to increase contributions after my kiddo goes to public school and stocks are lower.

[Anonymous]

Anonymous wrote:Recently I hit an income that would allow me to max out and not miss the $$$. I don’t max because I:

(1) am waiting for a market correction;
(2) don’t get a match because my employer offers a pension;
(3) bought a fixer upper, so I sink extra money into my house

Currently contribute 10% and have a decent amount of cash on hand. I’m 35 with a child in daycare, so plan to increase contributions after my kiddo goes to public school and stocks are lower.

I think you just missed (1).

[Anonymous]

Anonymous wrote:Recently I hit an income that would allow me to max out and not miss the $$$. I don’t max because I:

(1) am waiting for a market correction;
(2) don’t get a match because my employer offers a pension;
(3) bought a fixer upper, so I sink extra money into my house

Currently contribute 10% and have a decent amount of cash on hand. I’m 35 with a child in daycare, so plan to increase contributions after my kiddo goes to public school and stocks are lower.

Um -- market is up 35% (after the correction we just had this month) since Nov. 2016. Are you seriously waiting for it to go back down 35% before you invest?

[Anonymous]

Not everyone needs to retire with 2 million in the bank. Plenty of people's have survived their whole lives on 50k and will do fine on that in retirement (not in this area of course). In dhs hometown 3 hours from here you can buy a nice townhouse (3 bedroom) for 75k. Most of these will run out if they need long term nursing care, but Medicaid nursing homes will be ok.

[Anonymous]

STFU with your maxing out a 401k at age 24. You are so out of touch it isn’t even funny.

[Anonymous]

Anonymous wrote:STFU with your maxing out a 401k at age 24. You are so out of touch it isn’t even funny.

+1

Most people I know who work in biglaw aren't doing this ... at age 28!

[Anonymous]

Lol, because I make $60k and there is no employer match at my company. I put 10% in, but more would be rough.

[Anonymous]

Anonymous wrote:Not everyone needs to retire with 2 million in the bank. Plenty of people's have survived their whole lives on 50k and will do fine on that in retirement (not in this area of course). In dhs hometown 3 hours from here you can buy a nice townhouse (3 bedroom) for 75k. Most of these will run out if they need long term nursing care, but Medicaid nursing homes will be ok.

As someone who works in long term care / assisted living I am sort of chuckling at any plan that involves government reimbursement for nursing support. By sort of chucking, I mean I am laughing at the thought that someone believes MedicAID (or even MedicARE) would be able to sustain a current level of service given the Senior tsunami that is coming. But it is offset by my dismay that someone, likely many, will use this as an excuse to not save beaucoup bucks for retirement.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Not everyone needs to retire with 2 million in the bank. Plenty of people's have survived their whole lives on 50k and will do fine on that in retirement (not in this area of course). In dhs hometown 3 hours from here you can buy a nice townhouse (3 bedroom) for 75k. Most of these will run out if they need long term nursing care, but Medicaid nursing homes will be ok.

As someone who works in long term care / assisted living I am sort of chuckling at any plan that involves government reimbursement for nursing support. By sort of chucking, I mean I am laughing at the thought that someone believes MedicAID (or even MedicARE) would be able to sustain a current level of service given the Senior tsunami that is coming. But it is offset by my dismay that someone, likely many, will use this as an excuse to not save beaucoup bucks for retirement.

Pp here. I agree but I'm not sure what you expect someone to do who makes 50k (average Americans). Dhs grandma is in a Medicaid nursing home in her 90s. Her money ran out after 10 years in a nursing home. It's not a bad place. People are living too long and doctors spend too much on unnecessary treatments in the last 3 months of life.

[Anonymous]

Anonymous wrote:

Anonymous wrote:STFU with your maxing out a 401k at age 24. You are so out of touch it isn’t even funny.

+1

Most people I know who work in biglaw aren't doing this ... at age 28!

There’s something wrong with your biglaw friends. Started in biglaw in 05 when the starting salary was “only” 125k though 2 years later we jumped to the 160k scale. Started maxing out at 25 — and yes I had debt and I lived in Manhattan in a doorman building with no roommate.