Sam_Julier
$50 Site Donor 2024
I agree with your statement. It is actuarily correct.
However, I have yet to hear anyone complain that they had too much money in retirement.
How many in pre-retirement make catch-up contributions to 401K
- Thread starter Donald
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However, I have yet to hear anyone complain that they had too much money in retirement.
?? Not sure what you are saying here??
I’m guessing it would make for a boring podcast/video, but I really would like to see this scenario played out, where someone made a “bad choice” in where the parked their money. And then suffered in retirement from undue taxes.
Only thing is, it really needs to have real numbers put on it. I’ve always assume that people with this “problem” make like seven figures a year, or some high level, and thus have written it off.
Only thing is, it really needs to have real numbers put on it. I’ve always assume that people with this “problem” make like seven figures a year, or some high level, and thus have written it off.
I’m 99% sure he missed a word—I’m assuming he meant, “it’s a shame that there is a contribution limit…”.
Don't get me wrong, I'd likely enjoy the higher limits but at what point does it move from a savings vehicle for retirement, to a tax shelter.
If a 25 year old maxed out at today's limits (not including catch up contributions) on their IRA and 401k and the limits didn't increase over time, with a 8% return/year, they would have $8MM at 65. Don't start savings until 35 and max out every year, 8% return/year, $3.5MM at 65.
I like Roths because of the tax free growth and the lack of RMD, but for me as someone that maxes their accounts, I'd purely be using it for the tax advantage and wealth growth, not as a need for retirement. At some point I can just suck it up and contribute to the brokerage account.
Sam_Julier
$50 Site Donor 2024
Did the same for my kids.
Contribution limits. Sorry.
I probably wrote this somewhere before but when all the Roth type stuff came about it was too late for me. The company I was working for did not offer it at first and I was too committed to regular 401K and my income was too high. Plus the businesses kicked me into self employment taxes.
Not complaining - I will just pay my taxes on the withdrawals. My taxable income is controllable and I have municipal bonds held in my taxable accounts.
I get my first social security check Feb 22. Wife is firing up for SS and her income is better than taking the spousal benefits.
But if anyone wants to send me $200,000 for an RV I’m open to that too.
Not complaining - I will just pay my taxes on the withdrawals. My taxable income is controllable and I have municipal bonds held in my taxable accounts.
I get my first social security check Feb 22. Wife is firing up for SS and her income is better than taking the spousal benefits.
But if anyone wants to send me $200,000 for an RV I’m open to that too.
I wish you all good luck in your investing. You can also invest some of your after tax monies as well. Go for it! You're welcome.
Gonna do like John Madden and take a Bus or RV and travel North America? I'd ride along just for the sight seeing. Going to the Honda factory or a tour to the Crown Royal Distillery would be neat. Like to see the Clydesdale Horses at Budweiser factory and see someone really green like Eureka Springs. Finding a Furrs cafeteria would be okay too.
Catch up contribution (50 and older) should be an extra $15K for both IRA and 401K, 403B, Thrift Savings.
I max out everything with respect to my 401K. Last year I was considered an HCE and was limited to just 7%. Then my company opted for Safe Harbor so now I am just limited by IRS rules.
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Sh** one year I got an email to introduce me to deferred comp. I was actually thinking this cannot work, I need to find a new employer.
Approached my boss and he said oh, I don’t do 401k but I heard Pam and Anthony talking about deferred comp.
Suddenly, didn’t need to do it anymore. I didn’t know the reasoning behind it but a coworker said that was stupid. Now everyone on the email knows these are the people who make over $x per year.
Going back to grad school I do understand the concept where ordinary employees have a tendency to contribute little and HCEs are at the IRS max, putting qualified plans in jeopardy…
I have only had truly good jobs for the past decade or so, so my 401k contribution have been short on years but high on monthly dollar contributions.
Still total less than a lot of other folks.
I will continueto contribute the max thats still employer matched after that no more.
Also dont have all thta confidence in our fiat currency anymore.
There are so many more dollars in circulation than even just 3 years ago but we do not produce more goods and service than we did 3 years ago and this iwll not get better.
Whats employer matched ot me is free money so I will do it but not beyond.
Still total less than a lot of other folks.
I will continueto contribute the max thats still employer matched after that no more.
Also dont have all thta confidence in our fiat currency anymore.
There are so many more dollars in circulation than even just 3 years ago but we do not produce more goods and service than we did 3 years ago and this iwll not get better.
Whats employer matched ot me is free money so I will do it but not beyond.
Because decent medical plans are too expensive.
https://www.investopedia.com/terms/h/highly-compensated-employee.asp
Exactly how do you know if you are a HCE?
It's time in the market yes. I still own stock that I bought in 1981.
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Hate to give me age away but who cares, right? haha
I inadvertently starting making catch up because my % exceeds the IRS maximum. I thought that my employer bungled it and panicked, but it's age related.
Why do I say my employer? In 2020, instead of adjusting my FSA to $0, they terminated me 8/31/20. In November 2020, I got an email. You have $2700 and your last day to spend it is 8/31/20. THE 20 SOMETHING HR DIRECTOR SAID, "I'll see what, if anything, can be done."
I've lost 10X that on the stock market, but have never lost anything near that amount due to administrative error. end rant lol
I inadvertently starting making catch up because my % exceeds the IRS maximum. I thought that my employer bungled it and panicked, but it's age related.
Why do I say my employer? In 2020, instead of adjusting my FSA to $0, they terminated me 8/31/20. In November 2020, I got an email. You have $2700 and your last day to spend it is 8/31/20. THE 20 SOMETHING HR DIRECTOR SAID, "I'll see what, if anything, can be done."
I've lost 10X that on the stock market, but have never lost anything near that amount due to administrative error. end rant lol
My issue with pouring lots of extra earnings into the stock market, especially a tax-deferred account such as an IRA/401/403/etc., is that it's tied up in the stock market, in a 401k/etc., you're beholden to your employer's HR department (i.e.: low IQ people) selection of 401k salesmen who have selected "great" funds for you to invest your hard-earned money.
Then comes the time when mandatory distribution might kick in and you don't necessarily need/want it at that point.
I know my groanings don't apply to all or possibly many, but I'm at a point where I will continue to contribute ~10% to an employer-sponsored plan but due to what seems like continuous volatility, I am looking for other avenues of investment outside the stock market.
So my thoughts are don't slam people for not throwing as much as they can into an employer-sponsored plan. Most of them suck with regard to choices of funds.
Then comes the time when mandatory distribution might kick in and you don't necessarily need/want it at that point.
I know my groanings don't apply to all or possibly many, but I'm at a point where I will continue to contribute ~10% to an employer-sponsored plan but due to what seems like continuous volatility, I am looking for other avenues of investment outside the stock market.
So my thoughts are don't slam people for not throwing as much as they can into an employer-sponsored plan. Most of them suck with regard to choices of funds.
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