At what HHI did you start fully funding your 401k?

[Anonymous]

Anonymous wrote:

Anonymous wrote:You really don't need as much money in retirment as many people think they do

All those calculators assume the same or even higher income in retirment which is nuts.

Think about your major expenses, mortage and kids

In retirement both of those are gone

Even in this area I think most people even DCUM people are going to be perfectly fine on 100k a year in retirement and most should be fine on more like 75k a year.

When you factor in SS you are looking at around 60k at most per year that you actually have to save for.

We have no mortgage or other debt and still blow through $100,000 a year. We do have kids at home though.

Then you are a high consumer with wants you confuse with needs.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I tried fully funding at $160K, but found I could not do it - I ended up with credit card debt. So now I fund about $10K annually, plus a company match of 5% of my salary.

What does your budget/expenditure look like? I find it interesting that it's hard to fully fund at 160k without incurring CC debt for other expenses.

OP here. It's not interesting, it is sad because I don't know where the money goes....mortgage is $2300 per month, save about $1,000 per month in 529s for college kids, we have (unfortunately) pretty high health care costs (because of costs that are not covered by insurance), car payments, utilities, cell phone, cable....and the rest is just living. I'm not complaining because I have a high quality of life, and am saving way more than most people. But at the end of the month I am always out of cash.

(I should also add that I am a fed, so will have a pension on top of my 401k/TSP savings. So that's part of why I don't worry too much about not maxing out)

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I tried fully funding at $160K, but found I could not do it - I ended up with credit card debt. So now I fund about $10K annually, plus a company match of 5% of my salary.

What does your budget/expenditure look like? I find it interesting that it's hard to fully fund at 160k without incurring CC debt for other expenses.

OP here. It's not interesting, it is sad because I don't know where the money goes....mortgage is $2300 per month, save about $1,000 per month in 529s for college kids, we have (unfortunately) pretty high health care costs (because of costs that are not covered by insurance), car payments, utilities, cell phone, cable....and the rest is just living. I'm not complaining because I have a high quality of life, and am saving way more than most people. But at the end of the month I am always out of cash.

(I should also add that I am a fed, so will have a pension on top of my 401k/TSP savings. So that's part of why I don't worry too much about not maxing out)

I sense a bunch of replies in here are from fellow feds. A word of caution...the pension is a pittance. A fed with exactly 20 years of experience and retiring at 62 with a high-3 of $100k gets a yearly pension of $22,000. Social Security benefits are projected to be paid out over the next century, but they might be at a reduced rate (~80%) by 2034. TSP is the key cog to a comfortable retirement as it's your own hard-earned cash that you will have some control over. Lastly, if a 401k (and especially the TSP) wasn't such a great deal, why would the fed put a yearly cap on the max that you can put in??

Max out, then build a budget around it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I tried fully funding at $160K, but found I could not do it - I ended up with credit card debt. So now I fund about $10K annually, plus a company match of 5% of my salary.

What does your budget/expenditure look like? I find it interesting that it's hard to fully fund at 160k without incurring CC debt for other expenses.

OP here. It's not interesting, it is sad because I don't know where the money goes....mortgage is $2300 per month, save about $1,000 per month in 529s for college kids, we have (unfortunately) pretty high health care costs (because of costs that are not covered by insurance), car payments, utilities, cell phone, cable....and the rest is just living. I'm not complaining because I have a high quality of life, and am saving way more than most people. But at the end of the month I am always out of cash.

(I should also add that I am a fed, so will have a pension on top of my 401k/TSP savings. So that's part of why I don't worry too much about not maxing out)

I sense a bunch of replies in here are from fellow feds. A word of caution...the pension is a pittance. A fed with exactly 20 years of experience and retiring at 62 with a high-3 of $100k gets a yearly pension of $22,000. Social Security benefits are projected to be paid out over the next century, but they might be at a reduced rate (~80%) by 2034. TSP is the key cog to a comfortable retirement as it's your own hard-earned cash that you will have some control over. Lastly, if a 401k (and especially the TSP) wasn't such a great deal, why would the fed put a yearly cap on the max that you can put in??

Max out, then build a budget around it.

I'm not as negative as you are.

That $22,000 is probably the equivalent of about $1 million in savings. So you can save a lot less as a result of having that pension nest egg.

[Anonymous]

I started fully funding when I started making $90K. I was 28.

Prior to that, however, I was putting in around 10%, and I received a company match of 6%

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I tried fully funding at $160K, but found I could not do it - I ended up with credit card debt. So now I fund about $10K annually, plus a company match of 5% of my salary.

What does your budget/expenditure look like? I find it interesting that it's hard to fully fund at 160k without incurring CC debt for other expenses.

OP here. It's not interesting, it is sad because I don't know where the money goes....mortgage is $2300 per month, save about $1,000 per month in 529s for college kids, we have (unfortunately) pretty high health care costs (because of costs that are not covered by insurance), car payments, utilities, cell phone, cable....and the rest is just living. I'm not complaining because I have a high quality of life, and am saving way more than most people. But at the end of the month I am always out of cash.

(I should also add that I am a fed, so will have a pension on top of my 401k/TSP savings. So that's part of why I don't worry too much about not maxing out)

You're funding 529s before fully funding TSP? That leaves tax-advantaged money on the table.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I tried fully funding at $160K, but found I could not do it - I ended up with credit card debt. So now I fund about $10K annually, plus a company match of 5% of my salary.

What does your budget/expenditure look like? I find it interesting that it's hard to fully fund at 160k without incurring CC debt for other expenses.

OP here. It's not interesting, it is sad because I don't know where the money goes....mortgage is $2300 per month, save about $1,000 per month in 529s for college kids, we have (unfortunately) pretty high health care costs (because of costs that are not covered by insurance), car payments, utilities, cell phone, cable....and the rest is just living. I'm not complaining because I have a high quality of life, and am saving way more than most people. But at the end of the month I am always out of cash.

(I should also add that I am a fed, so will have a pension on top of my 401k/TSP savings. So that's part of why I don't worry too much about not maxing out)

You're funding 529s before fully funding TSP? That leaves tax-advantaged money on the table.

I guess I am...but I can't pay for my kids' college with TSP savings. And I think I owe it to my kids to pay for their college.

So what should I do here.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I tried fully funding at $160K, but found I could not do it - I ended up with credit card debt. So now I fund about $10K annually, plus a company match of 5% of my salary.

What does your budget/expenditure look like? I find it interesting that it's hard to fully fund at 160k without incurring CC debt for other expenses.

OP here. It's not interesting, it is sad because I don't know where the money goes....mortgage is $2300 per month, save about $1,000 per month in 529s for college kids, we have (unfortunately) pretty high health care costs (because of costs that are not covered by insurance), car payments, utilities, cell phone, cable....and the rest is just living. I'm not complaining because I have a high quality of life, and am saving way more than most people. But at the end of the month I am always out of cash.

(I should also add that I am a fed, so will have a pension on top of my 401k/TSP savings. So that's part of why I don't worry too much about not maxing out)

You're funding 529s before fully funding TSP? That leaves tax-advantaged money on the table.

I guess I am...but I can't pay for my kids' college with TSP savings. And I think I owe it to my kids to pay for their college.

So what should I do here.

You can borrow against your TSP to pay for college, which may still leave you ahead given the tax advantage. You can also start withdrawing at 59.5 without any tax penalties (not sure if that's within your kids college age). And finally, your kids can borrow for college but you can't borrow for retirement. You can paying off their loans once you reach 59.5 and can withdraw without tax penalties.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I tried fully funding at $160K, but found I could not do it - I ended up with credit card debt. So now I fund about $10K annually, plus a company match of 5% of my salary.

What does your budget/expenditure look like? I find it interesting that it's hard to fully fund at 160k without incurring CC debt for other expenses.

OP here. It's not interesting, it is sad because I don't know where the money goes....mortgage is $2300 per month, save about $1,000 per month in 529s for college kids, we have (unfortunately) pretty high health care costs (because of costs that are not covered by insurance), car payments, utilities, cell phone, cable....and the rest is just living. I'm not complaining because I have a high quality of life, and am saving way more than most people. But at the end of the month I am always out of cash.

(I should also add that I am a fed, so will have a pension on top of my 401k/TSP savings. So that's part of why I don't worry too much about not maxing out)

You're funding 529s before fully funding TSP? That leaves tax-advantaged money on the table.

I guess I am...but I can't pay for my kids' college with TSP savings. And I think I owe it to my kids to pay for their college.

So what should I do here.

You can borrow against your TSP to pay for college, which may still leave you ahead given the tax advantage. You can also start withdrawing at 59.5 without any tax penalties (not sure if that's within your kids college age). And finally, your kids can borrow for college but you can't borrow for retirement. You can paying off their loans once you reach 59.5 and can withdraw without tax penalties.

Thanks! Every now and then I learn something on DCUM...I will reassess how I am allocating these savings.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I tried fully funding at $160K, but found I could not do it - I ended up with credit card debt. So now I fund about $10K annually, plus a company match of 5% of my salary.

What does your budget/expenditure look like? I find it interesting that it's hard to fully fund at 160k without incurring CC debt for other expenses.

OP here. It's not interesting, it is sad because I don't know where the money goes....mortgage is $2300 per month, save about $1,000 per month in 529s for college kids, we have (unfortunately) pretty high health care costs (because of costs that are not covered by insurance), car payments, utilities, cell phone, cable....and the rest is just living. I'm not complaining because I have a high quality of life, and am saving way more than most people. But at the end of the month I am always out of cash.

(I should also add that I am a fed, so will have a pension on top of my 401k/TSP savings. So that's part of why I don't worry too much about not maxing out)

I sense a bunch of replies in here are from fellow feds. A word of caution...the pension is a pittance. A fed with exactly 20 years of experience and retiring at 62 with a high-3 of $100k gets a yearly pension of $22,000. Social Security benefits are projected to be paid out over the next century, but they might be at a reduced rate (~80%) by 2034. TSP is the key cog to a comfortable retirement as it's your own hard-earned cash that you will have some control over. Lastly, if a 401k (and especially the TSP) wasn't such a great deal, why would the fed put a yearly cap on the max that you can put in??

Max out, then build a budget around it.

22K is definitely NOT a pittance, particularly after only 20 years of work. I'm in the private sector and will have zero pension - would feel immeasurably more secure to know I'm guaranteed 22K a year for life once I hit retirement age.

[Anonymous]

Since about $150K combined we've been fully funding two TSPs.

[Anonymous]

Anonymous wrote:Fund it fully from the moment you get your first job. Cut other expenses to the bone if you need to, but you have to assume that what you save will be all you will have.

I just don't think this is realistic for many people in the DC area. You can cut as much as you like, but you still have to live somewhere, eat, and many people have student loans.

Personally, my first job at $41k just didn't allow for fully funding a TSP at the time at $15.5k given my obligation to repay my student loan. And to live somewhere. Even in a group house where I shared a bathroom my rent was still $550 a month, plus utilities. I funded to the match and then at each step increase or COL back when we used to get those, I just funneled that into the TSP until I finally did reach the max. But it took time.

At the same time, I figure I have to work roughly 40 years to be eligible to collect all portions of my retirement, so those first 5 years where I didn't make the maximum will be long forgotten by the 35 years in which I do save the max.

[Anonymous]

We jumped from 185 to 215 in one month. I upped mine to the Max. A few months later, went from 215 to 235, and my partner did his.

[Anonymous]

Question: when you all day you noticed big leaps at 300k you mean your individual account- not your combined accounts.. Right? DH and I have about 200k combined but, due to job changes, we have about 6 different accounts we consolidated as much as possible but we each have a Roth, Ira, and 401k. It seems like it will be forever before we hit the 300 mark on any of these accounts.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I tried fully funding at $160K, but found I could not do it - I ended up with credit card debt. So now I fund about $10K annually, plus a company match of 5% of my salary.

What does your budget/expenditure look like? I find it interesting that it's hard to fully fund at 160k without incurring CC debt for other expenses.

OP here. It's not interesting, it is sad because I don't know where the money goes....mortgage is $2300 per month, save about $1,000 per month in 529s for college kids, we have (unfortunately) pretty high health care costs (because of costs that are not covered by insurance), car payments, utilities, cell phone, cable....and the rest is just living. I'm not complaining because I have a high quality of life, and am saving way more than most people. But at the end of the month I am always out of cash.

(I should also add that I am a fed, so will have a pension on top of my 401k/TSP savings. So that's part of why I don't worry too much about not maxing out)

You're funding 529s before fully funding TSP? That leaves tax-advantaged money on the table.

I guess I am...but I can't pay for my kids' college with TSP savings. And I think I owe it to my kids to pay for their college.

So what should I do here.

You can borrow against your TSP to pay for college, which may still leave you ahead given the tax advantage. You can also start withdrawing at 59.5 without any tax penalties (not sure if that's within your kids college age). And finally, your kids can borrow for college but you can't borrow for retirement. You can paying off their loans once you reach 59.5 and can withdraw without tax penalties.

You can use the Roth contributions for college too. Conventional wisdom is to contribute enough to get the 401k employer match, then do Roths, then put more in the 401k, and then work on saving for college.