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I have been fairly consistent with putting money into my 401k, and saved up $300k. I'm in my early 30's.
Even using the most conservative projections for market returns, that should provide more than enough for retirement. Not to mention the maxed out Roth account.
What I'm worried about is the minimum distribution rules for the 401k. I don't need $100K in retirement. I'm certainly planning to have mortgage free housing by then. I could probably live on $35-40K in today's dollars.
More than half of that should be covered by SS. So I'd need to withdraw $20K or so from my private retirement accounts. Should I reduce my contributions? Or am I overlooking something? Ideally I'd just drop dead with a large 401K that would be distributed between the beneficiaries 401K's tax free.
I think you have done a SUPERB job at saving this much in a 401k in your early 30's. I think you've saved a great deal and I wouldn't stress too much about saving more honestly.
I think 401k's are a great vehicle for retirement, but it's not the only one. For me, once I get to 100k, that's it for me. I'd rather have liquid funds that I can touch at any age.
I have been fairly consistent with putting money into my 401k, and saved up $300k. I'm in my early 30's.
Even using the most conservative projections for market returns, that should provide more than enough for retirement. Not to mention the maxed out Roth account.
What I'm worried about is the minimum distribution rules for the 401k. I don't need $100K in retirement. I'm certainly planning to have mortgage free housing by then. I could probably live on $35-40K in today's dollars.
More than half of that should be covered by SS. So I'd need to withdraw $20K or so from my private retirement accounts. Should I reduce my contributions? Or am I overlooking something? Ideally I'd just drop dead with a large 401K that would be distributed between the beneficiaries 401K's tax free.
Ideas?
I've always wondered about this too. At what point do you say, I am doing fine and begin to "enjoy" some of your money. However, I have noticed if you go to personal finance forums the answer tends to be never, but I think that is just because of the types of personalities that congregate here. I'm not doing quite as well as you (congrats by the way!) but I am 30 and my wife is 28 and we have 130k in investments and retirement accounts and are still putting away another 20-25k/yr in 401ks and Roths. If you assume my investments will average 7% and you pull out 2.5% of that for average yearly inflation, so run the #s on 4.5%. I will retire with approximately 2.4 million dollars. This also assumes I will not contribute more as I get raises/promotions, etc. which is obviously not true.
IMO I think I am good, and if I think I am good, you are doing fantastic with about double my nest egg, but if you ask around here they will say you can never have too much.
I max out 401k and always will bc tax-free savings make sense to me.
I save even more into a brokerage account bc money = security and it is a nice feeling to know I can tell ppl to go eff themselves and move on if I do not like my current situation.
I have been fairly consistent with putting money into my 401k, and saved up $300k. I'm in my early 30's.
Even using the most conservative projections for market returns, that should provide more than enough for retirement. Not to mention the maxed out Roth account.
What I'm worried about is the minimum distribution rules for the 401k. I don't need $100K in retirement. I'm certainly planning to have mortgage free housing by then. I could probably live on $35-40K in today's dollars.
More than half of that should be covered by SS. So I'd need to withdraw $20K or so from my private retirement accounts. Should I reduce my contributions? Or am I overlooking something? Ideally I'd just drop dead with a large 401K that would be distributed between the beneficiaries 401K's tax free.
Ideas?
You are only in your 30's. Reduce contribution later, not now. You may not be in a position to contribute as much say 10 years down the line. The whole idea of saving for retirement is the earlier and the more your saved earlier, the better position you will be in.
For me, once I get to 100k, that's it for me. I'd rather have liquid funds that I can touch at any age.
I see the 401K a little more liquid than that. If there is a very very very unlikely scenario that I'm in a money bind, I can withdraw from the 401K and take the 10% penalty. Say if I lose my job, my income will go down to $0, and I withdraw $20K from a 401K. I'll pay 10% penalty, and 12% federal taxes, since the lack of primary income will put me in a much lower tax bracket. So the 10% penalty does not become a big deal at this point.
Quote:
Originally Posted by mizzourah2006
but if you ask around here they will say you can never have too much.
You can't have too much, but you can pay too much taxes, and have the rightfully earned social security benefits reduced or overtaxed if other income is too high.
Quote:
Originally Posted by Huckleberry3911948
401 and 457 can be used for buybacks no tax consequence rollovers are great
Can you please elaborate? How does it help in situations when there is too much in a 401K and minimum distributions kick in?
At some point I'm going to stop putting as much in my 401k and put that money into a brokerage account. I'll do this so that I can have the possibility of retiring earlier. If I choose to retire at 55, I'll need 4 1/2 years of taxable account income before I can tap the IRA or 401k.
I won't reduce my savings amount, because whatever I get used to living on now is likely what I'm going to want to be living on in retirement....so if I save less now, I'll want to spend more later, and thus I'll need more money saved to keep me in the style to which I'll be accustomed.
If I have too much in retirement - which is a strong possibility that doesn't bother me - I'll have more to give away to charity
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