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Maybe. But what if you were forced out? It might be nice to have FU money, if that happened. You could semi-retire, maybe get a p/t job and take up a new hobby and be safe. You wouldn't have to stress about whether you were going to lose your home, or how you were going to pay for health insurance.
My former company has been laying off the 50+ year olds for the past 5-7 years. I survived a number of rounds and was finally hit in 2017. I was able to find another well-paying job, but it required moving. There are many, many stories of people out there who aren't so lucky. 50s is an incredibly scary time in life to lose a job. If you have great retirement savings, you can go into that decade confident that you're covered. If you don't get the boot, great! If you do, you don't have to panic that your life as you know it is over.
Understood, but I'm referring to people who've drunk the FIRE Koolaid and think they can just go back to work at 50 if they run out of money. Good luck with that!
If OP retires at 65, he won't have missed the mark by much.
Wow, a 30 year old who thinks it will make sense to work for 40 more years until the age of 70. This is like a 6 year old saying they want to grow up and be a fireman. There is just nothing to discuss.
Speaking analogies right back to you, fireman is a lot more realistic than CEO.
Yes it would be generally speaking. His company is high enough though that he couldn’t put in 16% of his total compensation. There’s no reason why he shouldn’t be allowed to put 50% in if he wants to front load the year unless the plan is top heavy. Small companies can exempt out from adp testing altogether I believe either on head count basis or contributions 3% fixed to employees
Yes it would be generally speaking. His company is high enough though that he couldn’t put in 16% of his total compensation. There’s no reason why he shouldn’t be allowed to put 50% in if he wants to front load the year unless the plan is top heavy. Small companies can exempt out from adp testing altogether I believe either on head count basis or contributions 3% fixed to employees
This is a publicly traded, Fortune 20 (twenty, not a typo) company.
There's no option to front load anything. 16% slow and steady is the max. It's that, or you put less. For those who are wondering, no, my retirement options don't allow me to do the "mega backdoor Roth" possible in some setups.
More and more people find themselves out of work well before they expect it.
I agree with this.
Things that could force you to retire early:
--Corporate merging/downsizing.
--Automation making your job obsolete.
--Your own health problems.
--Health problems of family members that require your time/money to help take care of them.
--You're 30 years old. You could get bored. You expect to work a this job longer than you've currently been alive. Think about that. Trust me. Your 40 year old self is likely to have different priorities/focus in life than your 30 year old self, not to mention your 70 year old self.
And that is why it’s prudent to save as though your goal is to retire in your mid-50s. Having the financial ability to retire early doesn’t commit you to doing so, but it gives you options - options you just might find yourself needing.
Hope for the best, but plan for the worst.
Agreed.
I see it all the time. People age 30 who've been working a few years can't imagine doing anything else. By the time they're 50 they're saying "I'm so tired. I'm burned out. I didn't believe my field would have changed this much in the last 10-15 years". I see and hear this. All. The. Time. And that's from the people who haven't been involuntarily booted out of good paying jobs in their 50s.
I see it all the time. People age 30 who've been working a few years can't imagine doing anything else. By the time they're 50 they're saying "I'm so tired. I'm burned out. I didn't believe my field would have changed this much in the last 10-15 years". I see and hear this. All. The. Time. And that's from the people who haven't been involuntarily booted out of good paying jobs in their 50s.
I would have $1.1 M at age 50 at the max 16% contribution rate, since only 6% is matched. 50 is not a plan. It is a derailment of an otherwise sound retirement plan.
Even doubling my contributions to a full third of my gross (which would undoubtedly involve me spreading this across multiple accounts, at least some of which I'm sure won't be tax-advantaged) won't move the needle enough for me to retire at *50* on my nest egg. With today's life expectancy figures, no one should, even if the numbers suggest otherwise. The only time I'd feel GOOD about retiring that early is if I qualified for a defined benefit pension and subsidized retiree healthcare, such as if I worked for the city from age 20-50.
20 years of contributions (even 30, if I were to have started at age 20, remember, my income was much, much lower then) wouldn't make me feel comfortable retiring that early. I'd just have to find something else. And if I had medical complications, I'd need to establish that I had a disability. Use short term, long term. If I wasn't able to return to work, then I'd need to go down the SSDI route to try to collect SOMETHING.
I would have $1.1 M at age 50 at the max 16% contribution rate, since only 6% is matched. 50 is not a plan. It is a derailment of an otherwise sound retirement plan.
Even doubling my contributions to a full third of my gross (which would undoubtedly involve me spreading this across multiple accounts, at least some of which I'm sure won't be tax-advantaged) won't move the needle enough for me to retire at *50* on my nest egg. With today's life expectancy figures, no one should, even if the numbers suggest otherwise. The only time I'd feel GOOD about retiring that early is if I qualified for a defined benefit pension and subsidized retiree healthcare, such as if I worked for the city from age 20-50.
20 years of contributions (even 30, if I were to have started at age 20, remember, my income was much, much lower then) wouldn't make me feel comfortable retiring that early. I'd just have to find something else. And if I had medical complications, I'd need to establish that I had a disability. Use short term, long term. If I wasn't able to return to work, then I'd need to go down the SSDI route to try to collect SOMETHING.
There is no reason why you cant do alternate retirement contributions outside of work provided plans though. And if you do a Roth which has no tax advantage at this point, you are already planning to pay taxes on that money anyway since you arent investing it in a retirement vehicle as of present, AND it has a very distinct tax advantage on the back end. You will pay taxes now but you wont on a million dollars later. Spreading your retirement investments over a few different retirement accounts, some as tax shelters and some after tax then you are executing a very thorough and thought out retirement plan. There is also the very real possibility of investing in real estate. If you save the excess money you arent investing and put it into rental houses you can not only greatly improve you income creating more invest-able money you are also putting a network of income producing sources in place for the future which will supplement your retirement income.
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