- November 11, 2023
- Posted by: legaleseblogger
- Category: Related News
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Understanding Retirement Savings Options
When it comes to saving for retirement, there are various options available that can help individuals secure their financial future. One popular option is a SIMPLE IRA, which allows employees to contribute a percentage of their salary with an employer match. Additionally, many individuals also choose to open a Roth IRA, which offers tax-free growth on contributions.
Maximizing Contributions
Maximizing contributions to a Roth IRA can be a challenging task, especially for young individuals who are just starting their career. It can feel overwhelming to balance contributing to multiple retirement accounts while also managing daily expenses. However, maximizing contributions to a Roth IRA is crucial for long-term financial stability and growth.
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For example, the AI Legalese Decoder can assist individuals in understanding the specific rules and regulations surrounding contributions to a Roth IRA, as well as provide guidance on how to maximize contributions effectively. By utilizing this tool, individuals can gain a clearer understanding of their retirement savings options and make informed decisions that align with their long-term financial goals.
Overall, leveraging resources such as the AI Legalese Decoder can help individuals navigate the complexities of retirement savings and make strategic decisions to maximize their contributions to accounts like a Roth IRA, ultimately securing a more stable financial future.
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****** just grabbed a
I don’t think its likely I ever will. I just don’t make enough and really don’t think its likely that I am going to any time soon.
This year. IÔÇÖm 40 and my husband is 46, we bought a house 3 years ago and we have 3 kids ages 4, 2 & 2. This will be the first year we will likely both max out our 403b/401k ($19,500 each) and max both Roth IRA accounts.
I started maxing my Roth IRA around age 30.
I’m 55. I’ve been saving since I was 27. I’ve never maxed out my contributions; not even close.
Here’s a [recent post](https://pay.reddit.com/r/MiddleClassFinance/comments/mpcc1h/this_week_in_victories/gu9qh76/) where I discuss my 401k.
In addition to that I have an Rollover IRA and a small vested pension. All combined I am at about $980k. Hoping to retire at 62.
**EDIT**
I found that I have a little more detail about this in one of my spreadsheets. I have never contributed more than 60% of the annual max. I have only twice contributed more than 50% of the max. For the prior decade, I have only twice contributed more than 33% of the max.
Additionally, back around 1999 I received a ~$16k pension payout from a former employer that I put in a Rollover IRA. The annual limit that year was $10k, so that was a pretty nice extra chunk of money pretty early in my savings history. I estimate that rollover alone accounts for 6.6% for my current savings.
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Honestly, at 25 just thinking about retirement funds puts you wayyyyy ahead of the curve!!! That 3k will be well over 100k by the time you retire! But to answer your question, this year is actually my first time maxing my 401k, at the ripe young age of 38 🙁 I don’t think maxing really matters though tbh. Putting in enough to retire at the lifestyle you want to retire at is what matters. My napkin math numbers tell me I need to invest about 10-15k/yr until retirement since I started so late.
The only account I will ever be able to max out is an IRA. But I am proud of myself for saving 40% of my pre tax income.
SSI won’t be bankrupt when I get old.It will be a steady stream of great income, and me and Fido will live on that farm he went to back when I was 8.
Posts like this hurt. Because I’m leaving matching on the table. I keep 6mo of essential bills in cash, about that much in savings, and a few dollars in a Vanguard IRA that has grown ridiculously. I am at positive net worth (if I liquidated the items I’m paying on – land, house, and one of our cars) and have a clear (and easy, if I keep my job) path to zero debt of any kind within 5 years. Then all my money will be a little cash, depreciating cars, a LCOL house that is a bit of a money pit, and 15 rocky acres that no self-respecting cow would graze on.
I’m kinda happy at zero, after living in the red for a good chunk of my 20s. 44 now, been living this minimal debt/net positive life mostly for a while, taking great vacations, eating out whenever and wherever, and generally just enjoying the moment since tomorrow isn’t guaranteed.
I’m sure life will interveine soon, and I’ll find a new pile of debt, and maybe figure I might as well sock away the matching money since I’m swewating bills anyway. But for now I’m just hoping life catches me on the right wave – early death or successful SSI story. I’ve maxed SSI contributions for a decade, at least, so Ill be king of the scrap-heap.
26. This year will be the first year that I can completely max out my TSP and my IRA. But, I graduated college entirely debt free, so I donÔÇÖt have any loans. This year IÔÇÖm on track to make $82,000 and I live in a fairly LCOL area. ItÔÇÖs funny because with people talking about GME and BTC I feel so far behind even though I know IÔÇÖm setting myself up well for the future.
I have prioritized maxing out my 403B after finishing grad school at 28, and my Roth within 2 years after that. I look at funding retirement accounts and paying off student loans as ÔÇ£non-negotiableÔÇØ, and what I have after is my true money I have to spend. I essentially live at or below the standard of living of my friends making half what I do, but have been able to completely pay off $150k in student loans and build a substantial nest egg in 7 years after grad school.
This becomes harder on lower income, thereÔÇÖs no debating that. I do think saving and frugality become that much more important the less you make. Seemingly small errors (buying an expensive, highly depreciating car) can really damage you financially for many years.
I was 18 the first year I maxed out my Ira.
Not sure I ever will. I’m 28 and live in a high cost of living area. I’m fortunate that my company matches 5% of my salary whether I contribute anything or not. On top of that, they’ll match dollar for dollar an additional 6%. So I currently just do my 6% plus my company’s 11% (6% match + 5% base).
I’m making basically $65k right now and things around me are way to expensive to contribute 30% of my salary towards retirement.
Roth IRA late 20ÔÇÖs, 401k early 30ÔÇÖs
38 for Roth IRA. I maxed mine or last year, and then created one for my wife and retroactively maxed it out. On track to do it again this year for both.
We currently only do the matching for 401k. I do 5% with a 4% match, and she does 4% with a 7% match, but I plan to start increasing those in the next year or so.
I’m 26. I was contributing 8% plus match, but recently dropped to 4% so I can save up for a house.
We don’t plan on being able to max out our accounts until 33-35 as my husband is in dental school and we’ll focus on paying down his debt first.
I’m thinking of maxing the Roth, once my raise kicks in at the end of July. If I do, it’ll be my first time maxing anything at age 33.
For my job, there’s a mandatory plan: I have to give 5% of my salary and my employer gives just over 9%. That plus the Roth is a decent chunk of change, so I don’t think I’m going to contribute more.
If anything, I might start maxing the HSA, whenever my finances improve.
Last year at 37. I’m hoping to continue doing so, but we’ll see. I’ve hit my CoastFI number if I want to retire at 65, but I don’t plan on working past 57.
22, First year out of college. Worked my ass off for 2 years. Averaged 3700 hours/year in the Oilfields. That gave me such a boost forward to where I’m at today. A little short term pain for long term gain.
I wouldn’t look at it like this… By asking this question it seems as if you are basically comparing yourself to others and making a measuring stick for your perceived success or shortcomings financially. And it’s not really on a sound basis to make that judgment. (And even if not and just simply curious and really good at not letting these worms of info bother you in future, I fear that’s not the case for everyone here. That said I’m glad to see people honestly posting that they haven’t or don’t ever expect to, I do agree it helps to see a range of realities, just don’t want everyone to feel less than because they may not be on the same path as others here.)
But firsties, you’re talking about maxing out retirement accounts and then talking about an specifically a Roth IRA. A Roth/traditional Ira has a 6k contribution limit this year, others are responding about their 401ks which is a 19.5k limit, so two different scales there. Plus you mention a simple it’s, which I had to look up, and looks to be halfway between the two, at 13.5k this year. So not sure which number you are looking at for “maxing out”, but just keep in mind that other’s responses may be referencing a different contribution limit than what you were thinking of (some may also be combining them, like when I think of maxing out myself I think of both 401k + Roth contributions of 25.5k/yr total).
But also, everyone’s finances are different ND these contribution limits are a hard number. If you are able to put in your 3k/year but also able to live off of the remaining 3k (throwing out exaggerated numbers here)/year, and expect to be able to continue a similar life style throughout retirement than it doesn’t matter whether or not you ever maxed out bc you are more than meeting financial goals by contributing 50% your income! Keep that up for 17 years and you are in a great place (by using this guys chart for early retirement https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/)
Now yes, that’s likely a highly exaggerated number for most ppl in the US (which I assume you are based off the simple Ira), but doesn’t change the fact that everyone’s financial situation is different, and what counts as “middle class” here is a very broad range of salaries. There are ppl who quite possibly make 2 or 3x as much as you and consider themselves middle class as well, but how easily they are able to hit that contribution limit is different bc of the different salaries (and dual income vs si gle, kids vs not, homeownership vs renting, hcol vs lcol, expensive hobbies vs free hobbies, etc erc)
All that preface for… I max out my Roth every year and almost got the 401k maxed out 2 years ago (soooo cloooose too, shy maybe 200 bucks). I was 30 then, but since had to cut back for some home expenditures, and then lost my job last year, so this year working in rebuilding my liquid finances while also expecting a torrent of expenditures (roof, car, ac, couch, fireplace, fridge, etc). So not sure when I’d be able to go back to pushing and much into retirement as possible, but I have fairly low expenses and inexpensive hobbies that helps that. (And since how much I make does ultimately matter, was 65-68k last 5 years).
One thing though that does help, seeing numbers in paper makes a lot seem straight up infeasible. I just kept upping my contribution amount to remove from paycheck until I was losing money out of bank account at a fairly steady rate, and it basically hurt. Then I backed off some until was able to basically keep it close to neutral influx and outflux. There would be variations week to week and month to month (like insurance costs were yearly so that month would dip), but overall my balance In bank accounts were staying within the threshold I felt comfortable with, so felt like I could keep contributing that much. Before that year I thought it was absolutely impossible, but found that to a degree “out of sight out of mind” really worked, I have a tendency to check bank accounts a few times a week, so seeing it dip caused me to immediately hold back on some frivolous expenditures that I didn’t otherwise really monitor or care about. That said I didn’t and don’t think I could have maintained that level of contribution for more than a few years, just enough life stuff comes in to disrupt it. But money is in account now and working for me even if I did back off dramatically!
Regardless of anything else, you are ahead of the game to be investing in retirement stuff this early, so good for you! You got this!
Pick an amount your comfortable saving and have that come straight out of your paycheck to your IRA. Every time you get a raise bump up your contributions a bit.
18 maxed out roth ira. But as long as you keep an eye on it and continue writing towards retirement you are golden? At 25 you’re on track for sure!!
This year. 39 years old. ItÔÇÖs taken a lot of years of ÔÇ£annual financial planningÔÇØ with my husband. It definitely helps that we donÔÇÖt have kids
This year, at 31. It would have been last year, if not for getting furloughed for a month. Currently on track to max 401k, Roth IRA, and HSA (barring another global catastrophe). I started saving at 23 and only contributed 10% for the first few years, until my employer match dropped from 7.5% to 4.5% (OUCH) and my student loans were paid off.
I’ve maxed my Roth IRA every year, but I started investing at 30. I just save all year then throw the lump $6k into it at the start of the year… although I can never seem to get the timing right, just now got back above water after this dip/sideways movement we’ve had this year.
I also have a 401k but only 10% of my salary goes to it.
Technically this year. I’m 35, husband is 33, with an almost 3 year old and another on the way. I’ve been maxing my Roth since 2019, and my husband’s (technically with my income) since 2020. This year we both set up employer plans and are matching the 3% (me) and 5% (husband). The budget is getting tight and we may have to adjust when baby 2 goes to daycare, but for now we are able to max out those two things. I would love to have had ANYTHING in Roth or Simple at 25. You’re doing great.
I’ve maxed my roth IRA & HSA for the last several year. 401k I probably average around 9-11k so not quite there, I am not sure if I ever will unless I can get my salary up.
27 or 28, I think.
The only retirement account (the other two are regulated and based on my income) I could max out is capped at about 7k$/year and I was past that annual investment at age 23.
I started maxing my 401k at 26, and both my 401k and IRA at 27. I was still in school until I was 26.
I currently have 11% with a company match of 3% in my 401k, (38 years old). I currently do not have a Roth. Should I lower my 401k contributions and start a Roth?
Last year at the age of 34 I maxed both my 401k and Roth IRA. I make a good salary and live in a VLCOL area.