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

[daffers234]

@jasonrporter0316 Just some quick math to show you the advantage of AT MINIMUM maxing out your 401k (especially at your income).

You currently only put ~$6,800/year away. Meaning you are being taxed on your income of $163,200 @ 30% leaving you with $114,240.

If you maxed out your 401k contributions that's $22,500. Your taxable income is now $147,500 @ 30% leaving you with $103,250. Saving an extra $1300/m ACTUALLY only costs you $900/m.

 

[ellel]

@jasonrporter0316 You really “need” a nice car and vacations? I make less than half of what you do with one kid and am maxing out my 401k and HSA this year. You need to learn to live below your means.

For the record, I bought a cheap but reliable car so no payments and still am able to travel domestically 3-4 times a year occasionally internationally as well. Get a budget.

 

[catiebug]

@ellel Vacations are fine, but they are apparently spending 15K USD a year on vacations. $15,000.

To put that in perspective, two people could go on a 9-day cruise around the Fijian islands [Via P&O Australia] for about 2K USD. A family of four could go to Rarotonga for a week for 5K USD. 15K for vacations is insane.

 

[floydt]

@catiebug Good luck also traveling to those destinations at that price.

 

[stevepaul1983]

@floydt It's possible if you start in Fiji

 

[catiebug]

@floydt I’ve done some pretty extensive research on the costs, lol. Been wanting to go on vacation for a while, but I don’t like spending a lot of money so always try to find the cheapest way to do it while still being able to have a good time.

 

[kadynsmommy]

@catiebug Eh the base fare for a P&O cruise to Fiji that I could find was about $1500 per person for the lowest room class. I’m unsure if that counts all the taxes, port fees, gratuities, etc. Realistically a cruise like that would probably cost at least 1.5 x the fare minimum, not including flights so you’re looking closer to $5K at least. Still not $15K but as someone who loves cruises, the fare isn’t the only cost that adds up.

 

[imqer]

@catiebug This is what I was wondering. What kind of vacations are they doing???

This year alone, my wife and I spent 16 days across five cities in Japan, 8 days in Belize and we’ve taken a hand full of weekend trips to nearby states and cities this year. All for around 12k. I’d like to see the itinerary for his vacations

 

[johny123]

@imqer Ok he has kids, so double it. That’s how.

 

[goneguy]

@ellel Also 6k eating out on top of those

 

[ashrafraza1]

@goneguy 6k eating out doesnt spook me here, ifs $500 a month and hes got at least one kid. Thats date night with the wife and delivery pizza and lunches at work or something.

Should he be saving more for retirement? Yes.

With a 170k annual salary, is 6k a year eating out obscene? Na. The shit just needs to be budgeted in after saving, instead of before

 

[boys3rsk]

@goneguy Exactly. $21k to discretionary leisure is 3x more than their current 401k contributions

 

[righteousjudgement]

@jasonrporter0316 Idk if this makes a difference to say but, I’m 35 and single mom of 2 making 85k a year & have about 70k in my 401k. You might want to reevaluate where
Your money is going.

 

[cblack34]

@jasonrporter0316 I’m your age, make half as much as you and have 9 times what you have saved. You have to change your lifestyle as you aren’t saving enough at all. You should be putting in 15% plus the 4% but since you’re behind, you need to bump it up further.

Since you’re a high earner, you might be able to save more than the $22,500 maximum contribution limit. The mega back door Roth 401k is for high income earners like yourself.

Get online and play with some retirement calculators.

 

[catiebug]

@jasonrporter0316 4% of your income going to retirement [Plus match, 8%], and 40K saved in total at 35, with a 170K salary…

My dude, unless you start living below your means, you are screwed. Screwed, I tell you!

33K on a mortgage, 14K on cars, 15K on vacations, 6K on eating out, 6K on groceries. Why do you have car payments? You make more than enough money to buy 2 decent cars in cash. Sell the cars and get some cheaper ones. 15K on vacations is ridiculous; there are plenty of much cheaper vacation options out there. Hop on Google and find some. $500 a month on eating out is a lot of money - Learn how to meal prep or something if you hate cooking that much.

 

[samlon]

@jasonrporter0316 4% is nowhere near enough. At your income you need to save 20%.

 

[greentwiga]

@jasonrporter0316 Ouch. I won’t pile on. Listen to everyone else here.

Live below your means. You need to be saving off the top. If I was you I’d probably be doing at least 20% to your 401k and DEFINITELY doing a backdoor Roth. There are also other steps you can take but those are just the beginning steps.

 

[snowzealot]

@jasonrporter0316 Your kids will be much happier with not having to fund your retirement and healthcare in your old age than trips to Disneyworld. Please think of a healthy retirement savings as a gift to them. They won’t be burdened by your bills when you’re all older. You could potentially be destroying your future and theirs by not prioritizing saving now.