Reply to Anyone NOT maxing out your 401(k) even though you're making decent money?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I would max out to limit taxes.  If you choose to use 1,000 on your house instead of putting in your 401k you're choosing to pay at least 2,500 in income taxes.  The 401k is one of the best tax breaks out there.  I'd only not use it if you like giving the government money.

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I definitely see your point.   But do some people want a little money ( other than the emergency fund and college savings) that isn't locked up in retirement?  I feel guilty about the prospect of not maxing out because I know the tax benefit.  Then again, I know I will have to pay tax on it eventually, albeit presumably at a lower rate.   [/quote]

OP, on a $340,000 HHI, even if you max out both 401ks for a total of $36,000 this year, you have a monthly gross income of more that $25,000  Figure you're netting $15,000 a month, after health insurance, taxes, etc. (likely more after you both hit the social security max).  You have a mortgage of $330,000, the payment for which, even including taxes and insurance should be somewhere around $2500.  You have not identified any other debts.  Are you seriously trying to set up a binary choice, whereby you save either in a tax-advantaged plan or outside a tax advantaged plan, but not both?  You can't save anything out of the $12,500 monthly you have left over after your mortgage?  No offense, but that's ridiculous.

You recently said that your HHI was $200,000, so you just got a $140,000 increase, and yet can't manage to save any of it.

The question in your initial post implies that you view yourself as a "financially responsible person."  You need to reassess that.  You're not.  [/quote]

Op here.   You are completely right about the numbers above.  Our main financial commitment is tuition for our two special needs kids. Our third child is in public school. Hence the lack of savings other than 401k, emergency fund, and college.  [/quote]

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