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[quote=Anonymous][quote=Anonymous][quote=Anonymous]The real hidden cost of retiring early is losing 401k catchup contributions.

this year I did the $23,500 and the new $11,250 catch up for 60-63. So a total of $34,750. And that is before match. For instance Fannie Mae pays a 8 percent match and they match on bonus too.

Someon making lets say $225K with a 75K bonus will get a $24,000 match.

So that would be $58,750 in 401k in one year.

60-63 alone doing max can massively increase 401k

Now imagine you work till 67 vs retiring early at 59.5 when you can first take your 401k penalty free and and did max each year with catch up at a place with a 8 percent match. Given the new 60-63 super catch ups it would grow a ton those last 7.5 years and you will be compounding your current funds too. Most likely it may double or even triple in size those last 7.5 years.

My BIL early retired at 62 in 2020. He had been pulling from his 401k the last 5 years and missed most of bull market Fall 2022 to today. By time he hits RMDs at 73 he will have used up a ton of his 401k already.    [/quote]

Right, but if you started early and have millions in your 401K / TSP by retirement, catchup contributions are small change.  It's not worth forfeiting your healthy years of retirement for another million if you already saved enough.[/quote]

That only works if you can wait till RMDs not if you are hitting it early.Plus 401ks limits were actually pretty low years ago as was salaries. This year at $58,750 is masive for a 60-63 year old. As recently as 2001 the 401k max was $10,500 with no catch up. And in 2001 salaries were less meaning match was less. And from 2000 to 2010 was dead decade for stock appreciation.

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