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.
- 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.
- 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.
- 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.
- 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?
- 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
- LinkedIn NotShroffWow 1M at 40, anyone actually have that much $$ in their 401K at 40? I have 350K at 37.
- New osMS13Following 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
- Salesforce / Eng aSff4636 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.
- 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
- New kxAd17Since 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.
- 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.Jun 2 1
- 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.
- 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.
- EA Mk55hdWow 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 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.
- 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.
- Apple purifier@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 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.
- Microsoft cqWK35It 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.
- 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.