I should 1.5x my income in 401k by age 35…?

[karamel7]

@jasonrporter0316 That avg house repairs sounds really low to me. You should be saving at least 2% of house value a year for when the bigger items hit

 

[jay83x]

@jasonrporter0316 Not willing to sacrifice $15k per year in vacations and $6k in eating out...

You need go "re-balance" your budget by starting with retirement. Come up with a number you want to save and determine your budget for everything else AFTER that.

$110k - $25000 retirement (out of pocket not including company match on 401k = $85k

$85k - home ownership = $36k (holy shit this is why I don't own a house lol)

$36k - cars = $22k

$22k minus groceries = $16k(will actually be more after your tax burden is reduced from contributing to your retirement)

$16k is now your new budget for vacation and eating out. At least until you pay off those cars or find other ways to reduce your necessities above or get a raise.

 

[ironfeather]

@jasonrporter0316 Dud idk what you’re doing wrong with your taxes but you make about 40k more than me gross but only 19k more than me net and I’m in a state with state income taxes of about 5% which is most like states. Plus you have kids so that’s another tax deduction and I have no deductions

 

[skimmy]

@jasonrporter0316 Ever look into r/churning or r/awardtravel ? I just did a 2 week Europe vacation for 4 and only paid around $1500 total to cover hotels/flights. Cash value would’ve been something like 40k.

 

[acubarry]

@jasonrporter0316 That’s the sad truth. Inflation has eaten it all away.

I had to start side hustles to even afford life

 

[milliesmom]

@jasonrporter0316 i make basically in the same financial situation as you, but the difference is you gotta pay off that debt. sell or pay off the cars asap. you gotta grind for a year or two; those are expensive vacations for someone with all that debt. your living beyond your means and keeping up with the joneses.

 

[tjh]

@jasonrporter0316 6k in eating out a year? 14k a year in car payments? Those two could be drastically reduced if you are firm on not wanting to reduce vacation expenses. Basically you have to start making choices.

I make a lot less than you and at 39 have 2M (though discipline, not luck or inheritance, etc). And with no partner or help.

 

[foolsmind]

@tjh Honestly $6k in eating out with kids isn’t that bad. My wife and I alone spend close to $15k between eating out and grocery’s.

Now we’re still saving about 35% and sacrifice other things like clubs/bars, so I’m not saying OP shouldn’t save more. But eating out isn’t the worst thing he had going on. I think the $20k in “etc etc” is probably something that isn’t a necessity

 

[tjh]

@foolsmind I had to cut eating out largely out of my budget to be able to save

 

[foolsmind]

@tjh A lot of people do for sure, but OP makes $170k a year. The $6k eating out isn’t the problem. Of course cutting it out would help, but there’s easier things for him to start with is what I’m saying

 

[tjh]

@foolsmind It’s all a problem when added together though if they won’t budge on vacations

 

[foolsmind]

@tjh Vacations is definitely high and could easily be cut in half. But I’m way more concerned about the $22k in “etc etc”. If it wasn’t important enough to list out it is very likely to be silly spending. Id wager he’d have to do some serious digging to even know what that was spent on.

Edit: but you’re absolutely right, it is all a problem when added together. He will have to pick what’s a priority and cut down on the others.

 

[notsparedtherod]

@jasonrporter0316 15k per year vacation with no kids is too much. You can pull 10 out of that for savings

 

[ambermill4]

@jasonrporter0316 How are paying 4k in utilities?

 

[amyers3]

@ambermill4 That's... Not high. Unless maybe it's like a 500sqft house

 

[jasonrporter0316]

@ambermill4 AC on nonstop for 6 months minimum and watering the lawn… we were above $600 a few months this year

 

[carson4]

@jasonrporter0316 4k in utilities is nothing. electricity rates are high, water went up, nat gas is luckily still cheap, but $333/month for total utilities is not bad at all unless you live in a cardboard box in North Dakota! you talk about income, but is that a dual income or are you a single parent? if there is another I come in play that isn't being accounted for, you should be saving that whole amount! if you are making 170 combined as a couple, you both need to at least contribute enoigh for the match, but you should still be increasing that significantly.

 

[selenesue]

@jasonrporter0316 30% should be your marginal tax rate, not effective tax rate. Are you sure your withholding is correct, or are you also including your medical, dental, etc there?

 

[meeniminyong]

@jasonrporter0316 You are undersaving. The floor that you should be putting away for retirement is 15%. You should be targeting 25%. If you can't then your lifestyle is too expensive.

Contrary to what most people think, the more you make the higher your savings rate needs to be because social security will cover a smaller percentage of your expenses.

 

[vixen8]

@meeniminyong If by 25% you mean overall retirement savings (including IRA if possible, 401k, and non tax advantaged brokerage), then sure. But $170k x .25 is $42,500, well above the IRS maximum contribution of $22,500. Regardless, OP needs to be maxing 401k contributions out per year at a minimum.