How much should be in my 401k at 35? Anyone have a good baseline to share?
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- Put in just as much as your employer will match, or more, then find some other more interesting investments
- Barclays PLC finra40 yrs old. Only 300k in 401k but wife has 400k in her 401k so technically I have 700k right? 😂
- I moved to the US about 4 years ago. Now I'm 40 and I have ~$200k on 401k.
I'm pumping $55k there every year to catch up.
- SAP / Sales dogpilein my opinion, a 401k is a bad investment even with a company match. Not only is your money tied up until 59 1/2 but after you pay taxes on your withdraw you will have <1/3 of your total amount. A 401k is the best annuity the government ever invented for themselves. Ever heard of anyone getting wealthy with a 401? Nope! The wealthiest people on the planet don’t have one. Take the money you would put in a 401k and invest it in cash flowing assets that you control not someone else. If done right, you will lower your taxes and put more money in your family pocket.
- What terribly uninformed advice this is. 401k is generally a better investing vehicle whether you go Traditional or Roth route, because you don't pay any capital gains. If you invest on your own, you're doing it with money you already paid income tax on, AND you'll get to pay capital gains taxes once you sell.
There are certainly other factors to consider, like the fees and investing options in your company 401k, and your ability to weather financial storms without dipping into your 401k, but for most people the advantages outweigh the drawbacks.Jun 1 17
- What if you invest the same in REITs? My point is your money is no good to you if you don't have access to it. You invest it somewhere else it is there when you need it, depending on your investment.
It's tax free today but you'll pay the tax tomorrow with no penalty free access today.
- You are missing the point of a 401k. It's not supposed to be there for emergencies. The purpose is different, it's for retirement. Your savings should not be limited to 401k. I think you are also missing how compounding of the tax savings upfront can make a massive difference. Try putting some numbers in based on last 20years REITs and SP500 pre-tax, and let us know if you feel the same. Maybe I am missing your point
- I suppose I am coming from the standpoint that you don't know when you'll die. So I rather have lesser today but at least have it on me. Yes that extra 25-36% sure does make a difference but the tax man will come and it's still a percentage. And your 50k turned in to 2 million but your currency has lost value over the last 50 years. Is 2 million the same buying power at age 65 that it did when you were 25? What if at 35 you bought a rental property.
Thinking along those lines... I came to the conclusion that I get my employers match but then after 5-7 years make a withdrawal invest it elsewhere, perhaps, commercial real estate.
- If you don't know when you will die, you also don't know how fast you should spend your money as well. So I don't think that will end up working, coz you will never be able to spend your savings in time. Either you will over spend and have no money left, or under spend and have money left. Buying power changes, but you are not keeping cash, you are investing your 401k money in index funds or something else. Your tax argument doesn't hold as well, since if you don't invest in 401k, you pay tax upfront and lose on the compounding of your tax savings. If you want, give a concrete example with numbers and we can walk through this 🙂
- If you think you will be in the same or higher tax bracket when you’re retired, then make Roth contributions. But most of us are in higher brackets now, and won’t have nearly as much income when taking out retirement funds, so pre-tax is a win. You also have more money to invest now, and if you have any confidence in your investment plan, this can make a big difference.
I do both. For a long then I did only pre-tax, so that’s the bulk of my retirement savings, but nowadays I max that and then do the mega backdoor Roth. This lets me contribute more, and have a good balance of tax advantages and the added flexibility of Roth (eg not being forced to withdraw as early).
Calling a 401k a “scam” is a pretty severe level of ignorance. You must just not understand the basic concepts involved. And if your employer offers matching contributions and you aren’t making them, you’re just leaving money on the table.
- New VFcO68I think that as always, ppl in blind exaggerates a lot. Somebody 34 with 500k in 401k? Let’s do math. Assuming you started at 20, assuming That you maximize 401k saving 20k per year. 14x20k=280k. So this person saved 280k, good. Money has been invested in average 7 years because half of money been more than 7 years but half less than 7 years. If you have 280k for 7 years earning 7% a year, no wAy you can reach 500k, not even using compound interest. As I always say, blind is ok but people exaggerates numbers for some reason.
Edit: I was so generous when I said you can save 20k a year. Before 2010 limit was like 15k, until last year limit was 18.5k and not 20k as I put above. Also, I assumed that the person max out the 401k at 20 of age which often is not true. Also I assumed 7% returns but often company 401k do not give those returns, those thieves will erode the savings. Anyway if you say 350 or 400 I may believe you but 500?
- If someone is 28 and has been at a high paying job since 22, they could’ve been maxing their contributions which would get them as high as 300K or so without factoring in gains. Just throwing it into any decent index fund would’ve more than doubled their investment from the first year or two. So this seems doable given the right timing, job, and discipline.
- Status money is similar to mint but it loses some functionality and the ease of the interface in order to give you comparisons based on various criterion: age, income, location, etc. The comparisons are helpful ... the takeaway is that either people on Blind are phonies and liars or Blind just attracts the 25% of the 1%. The truth is likely a bit of bothJun 8 1
- 40 and have net worth of $980k. That includes equity in multiple houses, mutual fund accts, 401k and rainy day cash. Started very late in life... started making serious money at the age of 33. I now invest about $4500 into my 401k and other high growth mutual funds every month. Tracking to hit around 4.5m by 60... I also should own many many more properties by then. I don’t believe we will have social security, so passive income from properties should cover that piece.
- @XyYh51 Amazon when they relocate you from Seattle they do not adjust your salary down. So yeah would be cool if I could move to TX with my Seattle salary. That maybe a possibility for me soon :-) will see.
Amazon will only increase your salary if you go from Seattle to NYC or SFO.
- Procore RQJi2Do You follow any specific financial advice or wealth management? Got any preferred blogs or books? Would love to get into real estate but don’t know much about it. Contributing 4500 to your 401k; I assume you max out 401k quickly and just do post tax savings? Back door IRAs at all?
- 4brains- I migrated to a competitor, and they moved me and increased my salary.
Rq- my financial advise has always been my own. 30% real estate, and the rest in high growth mutual funds. I guess that would be the Dave Ramsey method. I also have no debt except my homes which are all mortgaged and being rented. No back door iras. Honestly didn’t even know these existed. Max 401 and then homes, and mutual funds.
Wv- I live in Austin and work for a large Msft partner.
Also- property taxes do suck here, but I’m in suburbia Austin, so cost of living is much better than Austin proper.
- I’ve just had a very strong mindset to stop spending on useless stuff and pocket as much as I can. I still enjoy the finer things in life but am cautious about my spend. I also keep a sharp eye on my budget. That’s the toughest part, but it is amazing how much you can have when you make your money work for you not the opposite.
- LinkedIn NotShroffWow 1M at 40, anyone actually have that much $$ in their 401K at 40? I have 350K at 37.
- Following on my first comment - most folks who hit 1M by 40 actively invest within that 401k. I have 2 colleagues/friends who did that. One did our company stock and the other did Amazon (though he doesn't work there.) Those of us old farts who went through the stock crash can tell horror stories. My 401k tanked 25% but colleague 1 was very aggressive and ranked more than 40%
- Oracle uNTN08moreMaximize 401k all the time. Contribute to Roth IRA for yourself if income permits. If spouse is not working, contribute to traditional IRA, again if income permits. Also maximize HSA while you are young (and by extension hopefully healthier and thus very few doctor visits so that you can have a HDHP). Dont forget 529 for kids especially if state allows tax breaks. After you do all that, THEN look into brokerage accounts.
- Leanplum ballsacksI'm unsure about 529.. will our kids, in 20 years time, still spend ~$50k/yr for an institutional degree? Or will we have moved on to cheaper yet still rigorous education paths?
It's a reason why I don't max out 529.. my kid can get a top-tier education by ingesting free information online
- 36 here and I'm way behind according to the above spreadsheet(40k in 401k). This year, I've started maxing out my roth 401k and opened a roth IRA with max contributions. With that said though, I'm aggressively catching up my 401k position but also have a healthy savings, own property, about $100k in various stocks, and my wife is also contributing to her roth 401k with the goal to max it over the next few years. I also live in the Midwest so cost of living is really low. I'm very confident that my retirement will be comfortable and I'll be able to gtfo at 60 if I want.
- There’s no downside to doing a backdoor Roth contribution, besides very slightly more complicated tax returns. It’s a good idea to strongly consider it even if you plan on being under the income limit since you’ll be pretty close.
Also, is a Roth 401k your only option? At our income levels, a Traditional 401k might be a better option depending on what you expect your tax rate to be in retirement.May 31 4
- I only contribute to a Traditional 401k, then backdoor Roth IRA, and finally regular brokerage accounts (see if you’re able to do a mega backdoor roth contribution).
Your tax rate is likely to be SIGNIFICANTLY lower in retirement and the Roth IRA account is enough tax diversification for me. Consider doing the math on your potential tax savings now with being able to deduct 19k in Traditional 401k contributions vs the expected taxes on your expected income in retirement.May 31 1
- Since the contribution limits are the same for both traditional and Roth 401k ($19,000) if you can afford to max out the Roth then you should absolutely do that and stop trying to figure out if you'll be in a higher or lower tax bracket in retirement since 19k growing tax free for 30 years in a Roth account will be wayy more valuable than that same money in a traditional account
- Don’t listen to anyone advising you to not do the math yourself. The fact is, if you assume that your tax rate remains the same indefinitely, then there is no difference whatsoever between Roth and Traditional accounts. The misconception from the comment above arises when you ignore the fact that you’re contributing after tax money to a Roth account.
For example, if you contribute $19k to a Roth account, and you assume a 25% tax rate, then it’d be equivalent to contributing $25.3k to a pretax account. You come out way ahead if your tax rate in retirement is lower than it is now with a Traditional account, and the opposite is true with a Roth account.
- Yelp ghJhGj83Two articles that helped me decide which to contribute to:
- You’re better off just taking the amount of 401K that you would be depositing automatically out of your check, then investing that money into your own investment choices.
- Boohpo has it correct, 401k is only part of saving for retirement. Take advantage of ESPP plans (Employee stock) also if available, take 10-25% out of the paycheck after all that for short term liquid savings. I usually invest this in a money market or index fund depending on how I feel about the market.
- So much stupidity in this thread. 401k should be a small part of your portfolio that you don’t even conceive of touching until you are well beyond 60. Yes invest in a brokerage account as well, but 401k with its tax free compounding over decades is a formidable vehicle. Do both, and absolutely take the 401k match. Only an imbecile leaves that on the table.
- I’m 34 and have 100k in it. 401 is a shitty investment anyways. Better to start a business
- Starting a business is great. But assume that you might wind up draining savings before getting the business to pay you back. My savings went stagnant after I launched my company, so I’m behind where I would have been. However I have several million in company equity that will get me back to where I expect to be.
- Symantec / Eng cardi_B401k is just making someone else money. I was doing 10% and then came the realization that I could actually invest it in something else with better returns in the short term. I think that if you are smart, you can use that money in better ways. My 2 pennies.
- It’s not 10%, by default employer sponsored 401k is required to hold 20% and then the IRS will impose 10% penalty on the money from your 401k before you retire. So it’s literally like capital gains tax. I mean what’s a 5% difference, plus at least if your money isn’t tied up inside of a 401k you can move it or do whatever you want with it.
- Depends on your 401k, some (like ours) let's you choose from selected funds or if you like you can choose whatever you like. If you are worried about liquidity, don't put as much in your 401k. I see 401k as gravy after expected retirement age and if my company is going to throw some money in for that, all the better I'll take it gladly. P.S. healthcare costs at 60+ are a muther, I like to have a war chest built up for that.
- Yeah that’s utterly absurd.
401Ks provide substantial advantages and it almost always makes sense to max your contributions if you can. Definitely max anything that your employer matches.
Some employers do offer better 401Ks than others. Ours offers a bunch of great super low fee funds, or the Fidelity BrokerageLink option so you can invest it in whatever you want. We also get automatic daily Roth “mega backdoor” rollovers.
You also have opportunities to roll your 401K into an IRA. Usually you’d do this when leaving your company, but some let you do it while still working there. Then you can do whatever you want with it, regardless of employer.
- Cardi_b; you are talking out of your ass. 401k contribution makes 50% return (employer match) on the money you would be paying 45% tax on otherwise. So a $1 towards 401k is $1.5 pre tax vs $0.55 after tax in hand. You can apply whatever rate of return or tax rate at retirement but it will be tough to do one better than 401k route
- Chewy / Eng jeasy1080morePersonally, I am over 35 and have not put $$$ aside into a 401K program. It was either I had some financial hardships I was dealing with or the company did not match at all, therefore, I felt at the time it was a waste. Now things are different and am thinking of putting away in a 401K and/or IRA. But, I do pretty well financially and have been extremely diligent at saving very aggressively into money market accounts and CDs. So for me continuing that momentum makes sense as if I absolutely NEED to take $$ out I won’t be penalized. But, that is my personal preference and experience.
- Wow of all the threads that made me depressed in Blind this is the worst 😥 - I am in my mid 30s and only have 120k on my 401k. I do have 35k on Roth IRA and another 100k on a taxable account. I started super late because I am an immigrant and only opened my 401k when I was 29 but still it looks like I am way behind
- Amazon moved2msYou’re doing great. I am 32 and have 150k total. A huge chunk of that was from the last few years.
At 155k of retirement savings and 100k of regular savings you can go years without work if needed and if not then that savings will grow to a comfortable level when you need to retire. Keep up the awesome work! And don’t believe everything on blind. Lots of people here talk a big game but have nothing to back it up.
- Amazon lamardavisFrom
A good rule of thumb is to add on one year of salary saved for every five years of age — for example, at age 30 you’d want to have saved one year of salary, at age 35, two years, at age 40, three years, and so on. Use these guidelines along with your post-retirement budget to gauge if you are on track for a comfortable retirement.
By Age 30
By the time you are 30, it’s ideal to have a 401k equal to about one year’s salary — so if you make $50,000 a year, you’d want to have $50,000 saved in your 401k account.
By Age 40
Most people have more stable jobs and have seen an increase in their annual income compared to their 20s. By age 40, three years worth of salary saved in your 401k is a good place to sit, so someone who makes $70,000 a year, should have approximately $210,000 saved in their 401k account.
By Age 50
This is a good checkpoint for your financial future. By age 50, it’s recommended to have roughly five years worth of salary put away. Assuming your annual income has increased to $80,000, this would mean that you’d want to have saved $400,000 in your 401k account.
- @temp_ yeah I think the Intuit guide for 401k may not be applicable for tech works with high TC. Also, I think it is dependent on what type of life style you choose to live. Do you need lots of fancy cars and homes? Or do you want to live a simpler life with little possessions? My thoughts are I want to dump my big ass house and get something much smaller in a low cost of living location.
- They increased the age limit to 72. I won’t be surprised if the communists in congress ask you to share it with a homeless after you could finally make withdraws.
- @Splunk you can withdraw at 59 1/2. What you refer to is the required withdraw for traditional IRA starting at 70 1/2. This means today you are forced to withdraw starting that age even if you don’t want to. The proposal is to raise that age to 72 or even 75. That’s my understanding
- 40. Started at 27 really.
401K. - $500K
Cash/STI - $700K
Not sure when when to think about retiring.
- Some advice - Start living like you have money. Otherwise there could come a day when your investments go sideways and you’ll wonder why you didn’t get/do the things you wanted when you could. Advice from someone who spent her nest egg on a startup. I could have done more traveling, bought nicer things before I did the entrepreneur thing. I’ll get back there again soon- but don’t miss an opportunity while you have it.Jun 2 4
- Yeah that's not easy. I'm a non US born (from India) but want to retire in US. This country is just much easier to deal with. When you retire you want a place that is reliable and stress free. India isn't a friendly place to retire if you still want to be independent. Also quality of healthcare in India still has to catch up overall besides the Uber expensive hospitals.
- Microsoft bKFl33I'm 36 and I have $40k in 401k. I moved to US 5 years ago. TC 200k. My plan is to work till I die.
- Just retire in a country where they have free or almost free healthcare and low cost of living. You can live a very good life with $40k a year (including traveling).
Clearly brokers want your money and ask you to put as much as possible
- Microsoft ufhudv500k in 401k at 36yrs old. Been maxing my 401k since 30 but been investing at least 12% since I graduated. Maxing your 401k regardless of what your company matches is the first best move of investment.
- It also doesn’t hurt that Microsoft matches 50% of our 401k contributions with no limit. It’s a free $9k each year.
I also recommend taking advantage of the Mega Backdoor Roth that Microsoft offers. It allows us to contribute another $27k/year in post-tax dollars to a tax-free-growth account after maxing out your 401k.
- There is no one right answer. No two people are the same. The target amount depends on many factors, including your goals, life expectancy, etc. Most people in the United States don’t have the money to handle a $400 unexpected expense. Most of us on Blind are very blessed.
If you can, you should be doing 401k at a minimum of your employer match. It’s free money. Otherwise I’d try to max it out (~18k/year).
If you leave an employer you may want to consider rolling over your 401k to an IRA that would provide a wider range of investment choices. I’ve done this a couple of times.
For peer reference, I’m 35 and have 550k in retirement accounts, another 500k in other stock, and 480k in property equity.
- I cashed out the 100k I had in my 401k 😂 28 years old and currently have a portfolio of 18 single/multifamily properties
- Microsoft devopsas“Households in the final retirement stretch headed by a 60-64 year old averaged $229,101.05 with a median of $16,000.”
My 401k had a temporary negative accumulated return after the market drop last December. It made me doubt all the bullshit that you can get 5%~10% return every year from your 401k plan. Then I found the above number.
Do yourself a favor, stop believing all the financial advisors’ bullshit. You are 1% of your generation, they are probably 30% at most.
- 27 with ~186K TC
~$110K in Roth IRA/401K, ~$10K in HSA. ~$5.5K in investments, and $50K savings for a house.
- PayPal jckamfigI am 29. Will be 30 in few months.
401K $58,000. Contributing for 3 years now.
Maxing out Roth IRA for myself and wifee.
$10,000 taxable account.
Around $20,000 send to home country for additional investment.
Chinese proverb. The best time to plant a tree was 20 years ago. The second best time is now.
- Max out 401k as every chance possible. Find a way to back door money into Roth as much as possible. Roths are better for long term wealth since you are never forced to withdraw that money, unlike IRAs and 401ks. Unless they change the rules.
Depending on your state, 401ks and money rolled into IRAs from 401ks are protected from creditors and legal claims. Which to me is a huge bonus given so few assets are protected this way without a great deal of effort being made to hide your money.
If you max out all of those, then you can start a post tax investment account and just do general long term investment.
If you think you may be saving too much, then get a financial adviser and make a long term plan.
- Sure, well divorce isn't exactly getting sued. That is a known risk. It's hard to hide money from a spouse. I am sure there are more ways than crypto.
Many trusts are insulated from spouses.
If you are a high earner you should always be looking at prenups if you aren't on even footing with your spouse.
- Amazon HandsoloAccording to FIRE, it's all about expenses and 4% rule. I think it makes sense to build the emergency fund first, then dump everything into tax advantaged retirement savings like 401k and Roth IRA/401k. That being said, cash truly is king and provides the most options in downturns. Property is great but not everyone wants to manage it or manage the manager. I'm pushing 50, have -$1.5m combined savings (401k/IRAs/investments) but don't plan to retire - I like what I do. My strategy has been to move around internationally and experience life as I would *if* I was retired. Don't wait until your older to do anything since you may never get that chance, live it now.
- Hahah, the only problem is that before we retire there is high likelihood of the government enacting "All your 401k are belong to us". I still contribute to my 401k but I am not completely depending on it to come through
- I'm 34 and at $500k. This is also after some disasters in my life that probably cost me about $100k. Been aggressively saving since I graduated, but I also paid my own way through BS and MS. And I didn't join FANG until recently.
- That's exactly right, started working at the crash. Invested aggressively, lived like a pauper. Still drive the same beat up car I did in college.
Seriously, the biggest thing is that almost every single person I meet lives extravagantly compared to me. Money can either be used to consume goods/services or make more money.
- You don't need to live like a pauper (what's the point of making good money?) but also don't need to live a luxury lifestyle. As usual, the correct way is somewhere in the middle. My DTI is around 14% now and I definitely don't live like a pauper. I just don't buy cars over $50K, etc.
- Wife and I both 40. ~$3M net worth.
$600k individual accounts. $1.1M in retirement - 401ks and wife pension). $500k in investment real estate (condo) and $750k home equity. If I invested in stocks over the last decade I would be well over $4M - but I was chickenshit and stayed in cash and real estate. Real estate did very well thankfully. Cash didn’t do well!! Invest early and invest aggressively until you are at least 50. My two cents.
- About equal, actually. I like real estate because 1) it’s a physical asset 2) tax benefits 3) raise rent with inflation annually against a fixed mortgage 4) depending on location, much safer. But you need to have the tolerance to manage a property just like a stock portfolio.
Problem I had was I didn’t find another property with my “dry powder” for years and i sat in cash waiting. In hindsight I should have been less picky/conservative. Investing is a long game.
- In hindsight I should have done more real estate. I had gut feelings about undervalued small places near downtowns of mid sized cities - could have bought a bungalow in 5 points near downtown Huntsville for $40k in the ‘90’s, loft west of Denver for $100k in the 00’s, downtown Las Vegas after the 08 recession for $100k, San Fran 1 bedroom for 300k in 2003. Every time I had some excuse for not doing it. Any of those investments would have paid off.
- Try to save a much as you can. Also remember that everything is relative. If you spend every dime you have and have a lavish lifestyle, you will need the same amount of money or more to be happy in retirement. Try to live frugally and not lavishly, take a lavish holiday once an year maybe. Then when you retire, your expectations will be manageable. As humans we always want the same or more than what we have now, so it's hard to cutdown on lifestyle.
- You should have double your salary but again max out every year if you can. I also max out my health savings account and don’t spend it, more money for retirement because most expenses when you get old are medical related.
- If your company offers a high deduct health plan you have access to put pretax money into a HSA account, it rolls over year to year, once you have a minimum balance you can invest it and you can use it on qualified medical expenses. If you leave your company it goes with you too. Since it’s high deductible I wouldn’t suggest it if you have high medical costs now but it’s great when your young and healthy and some companies match your contributions or seed this account to encourage enrollment. Think of it as a 401k for medical expenses.
- Twitter finetodyWhat if u get hit by a car tomorrow and die?
- That's why you have to have a little fun :-) I do save a lot of money and put most of it towards retirement as you can see by scrolling up and reading one of my previous posts. However I do splurge occasionally. You could die tomorrow and not enjoy your money that you worked hard to get. Also if you get too old you won't be able to enjoy your money. I know older people that have money but they can't go on nice trips because physically they can't do it.
- Splurge on vacations. I took myself to Hawaii a couple times. However I kind of cheated on that splurging. I use airline miles to take me to Hawaii three times already. I also used points for some of my hotel visits. Last time I went I used airline miles to get there but then I paid for a really nice hotel.
Also when on vacation I do tend to spend a little bit more a nice dinners especially if I'm using points for hotels flights. Also if I'm using points I'll spend money on experiences. Like helicopter rides or shows.
- 401k has 2 main advantages:
1. It is pre-tax and therefore reduces your taxable wages.
2. It often comes with an employer match, which is a 100% return on your money up until their limit.
After those two things are accomplished, a ROTH IRA or a traditional IRA make sense over a 401k.
- If you invest on your own, you'll pay income taxes on your money, and then you'll pay additional capital gains taxes on the growth. With 401k (whether Traditional or Roth) you effectively only pay the income taxes.
If your 401k has excorbinently high fees, it's possible to eat up that difference in taxes, but if your cost ratios are in the <0.1% range you're definitely better off investing in 401k first
- 28. $200k combined in 401k/457/503b. Worked for the state for a couple of years so I put nearly $40k a year I to pre tax accounts. Also got lucky with 401k matching. Company matched with company stock, and the stock went up nearly 10x in 4 years or so.
- New fAAj6432 with a PhD. 100k in combined retirement savings. Only got my first 401k at age 30.
- Zero at 30, have 4 houses totally paid off at different locations. They are earning me money now to invest more. Should I still think of putting into 401k?