Not fully funding 401k? Why not?

[Anonymous]

Anonymous wrote:

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.

Same here, but not in biglaw. As a matter of fact I met DH in college, and we both started maxing 401k when we got our first jobs. We've never noticed the money missing because we've always treated 401k like a tax.

[Anonymous]

I am a teacher. I was maxing my 403b in my twenties. At the time it was a lot less than $18,000. I knew there would be time where I couldn't max it out. When my kids were little, I didn't work, so couldn't contribute for those years. It took a few years to get back to the max when I returned to work. Now, I max out my 403b and 457.

[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.

I don’t understand extreme asceticism to fund retirement. You could get hit by a bus tomorrow. Live in the present as well as save for the future.

[Anonymous]

Anonymous wrote:

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.

I don’t understand extreme asceticism to fund retirement. You could get hit by a bus tomorrow. Live in the present as well as save for the future.

The poster is smart. It's called delayed gratification ( I know, a concept difficult to grasp). I did the same thing started right after I graduated from college (my parents are also financially responsible and save to pay my college) and though it was a sacrifice in my early/mid 20s, the payoff now of that investment in my 20s is enormous now 2 decades later. I absolutely now have a ton of disposable income, but luckily my 20s could calculate compound interest and realized that my 20s was the absolute best time to invest. As a matter of fact, I could completely stop investing in 401k today and still have well into 7 figures at retirement time.

[Anonymous]

Anonymous wrote:

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.

I don’t understand extreme asceticism to fund retirement. You could get hit by a bus tomorrow. Live in the present as well as save for the future.

Statistically you are a lot more likely to grow old than not.

[Anonymous]

We put in quite a lot. 14% for me and about 16% for DH. That includes matches. We are still nowhere near the max. Explanation? It’s expensive to fund a household. We have one car, a kitchen from the 1970s and take one simple vacation per year. My vice is Starbucks.... and that’s it.

[Anonymous]

Anonymous wrote: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.

If you really believe that you will be in a much higher tax bracket in retirement, you can see if your work offers a Roth 401k option. Most companies that do also offer matches.

[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.

I would bet the sample was of Vanguard investors.

[Anonymous]

I'm trying to get to the max out point! This year I'll put in over $10k. I make $75k and receive $10k/year in child support (as of 2017, before that it was less child support and more like $65k in income).

I'm trying to minimize my AGI so that my PSLF student loan payments are lower.

[Anonymous]

Anonymous wrote:

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.

I had a number of friends in biglaw who weren’t maxing out and some didn’t even open a 401k until age 30-32. And as I think about it, it was the people who had a ton of debt. It was people who were living large, assuming the gravy train would continue, and if it didn’t - so what, I’ll go make 300k someplace else. We were at a firm that’s not doing great despite vault rankings etc — ie very few new partners made. So then in year 6 when the firm started talking to them about - you probably won’t be partner here and the faced the reality that a lot of govt/in-house/smaller firm jobs would pay 200k if super lucky but tend to be lower than that - then they freaked out and started maxing out the 401k for 2-3 yrs before being pushed out. But leaving with a sub 100k 401k when you were making 300k and now having to focus on your 401k on your 150k or 200k salary in your mid 30s is ludicrous.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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.

I had a number of friends in biglaw who weren’t maxing out and some didn’t even open a 401k until age 30-32. And as I think about it, it was the people who had a ton of debt. It was people who were living large, assuming the gravy train would continue, and if it didn’t - so what, I’ll go make 300k someplace else. We were at a firm that’s not doing great despite vault rankings etc — ie very few new partners made. So then in year 6 when the firm started talking to them about - you probably won’t be partner here and the faced the reality that a lot of govt/in-house/smaller firm jobs would pay 200k if super lucky but tend to be lower than that - then they freaked out and started maxing out the 401k for 2-3 yrs before being pushed out. But leaving with a sub 100k 401k when you were making 300k and now having to focus on your 401k on your 150k or 200k salary in your mid 30s is ludicrous.

It was NOT the people with tons of debt.

[Anonymous]

I can't afford it; I only make about 55K

[Anonymous]

When I first started out, in 1994, I was making 35K. I had to pay back some loans. And I had to pay my bills. I did not have the ability to lose 15% of the top.

[Anonymous]

Anonymous wrote:OP here. I'm getting a little flak for this question but that's actually a bit reassuring. We've had times when we had a ton of outgoing expenses (two in daycare) but solid salaries. It was stressful but survivable. Now we're in a situation where it's precarious. I'm in my early 40s. The crap has hit the fan. I don't recall exactly when I started maxing out my 401k but I think it was when I was 24. It's hard for me to pull back. But, perhaps needs must.

I'm 48, a divorced, single mom of three kids ages 8-16, with no child support because I "make too much." (80K take home after taxes) I have NEVER maxed out my 401k because there simply isn't enough left over after basic expenses. I do my best to contribute a small sum to a modest 401k and college funds (that will barely put a dent in their expenses). If you are doing your best, as I know I am, stop stressing and count your blessings. If you've been maxing since 24 you're in a better place than the majority of Americans.

[Anonymous]

Ugh, OP, you sound awful.