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1
Posted on 11/14/23 at 4:28 pm to lynxcat
quote:
How do people get these sums in 401K when there is a max of ~$23K a year? Two HHs contributing maxing for like 20 years....does that get there?
I presume it is just compounding.
I typically double my 401k every 3 to 5 years.
A 52 year old has probably been working 28 to 30 years.
The sooner you start, the more power to the compounding.
Posted on 11/14/23 at 4:28 pm to TorchtheFlyingTiger
Projected, given average market returns.
Posted on 11/14/23 at 4:30 pm to Lgrnwd
quote:
plus some “after tax” contributions.
Wouldnt you be better off investing in a taxable brokerage. Gains could then be harvested in low tax rate early retirement years at zero or 15% versus paying income tax rates on the gains if I understand how it works. Sure you get tax differed growth but if you're invested long term in low dividend funds doesnt seem like there'd be much tax drag to worry about. Something to consider if you were otherwise intending to continue loading up "after tax" 401k contributions for next 8 yrs.
This post was edited on 11/14/23 at 4:31 pm
Posted on 11/14/23 at 4:31 pm to Lgrnwd
This is a brag. If true, you have more money than God.
Posted on 11/14/23 at 4:34 pm to lynxcat
quote:
What are you monthly expenses? Pension likely covers insurance and property tax. Your monthly living expenses are the most important variable to be able to provide any real analysis of the situation.
Current monthly utility bills plus vehicle and home insurance, about 1300 a month
Posted on 11/14/23 at 4:37 pm to kywildcatfanone
quote:
This is a brag. If true, you have more money than God.
False.
Multiple people in this thread have already said retiring at 53 with those numbers us not a good idea.
Posted on 11/14/23 at 4:46 pm to Lgrnwd
You should edit the initial post to clarify all numbers are projected.
You are looking at $150k annual draw (pre tax) at a 4% SWR if your assumptions hold true. With no debt that would fund a nice lifestyle today. Unless your projected return accounts for inflation, thats not going to go nearly as far in 8+ years though.
You are looking at $150k annual draw (pre tax) at a 4% SWR if your assumptions hold true. With no debt that would fund a nice lifestyle today. Unless your projected return accounts for inflation, thats not going to go nearly as far in 8+ years though.
This post was edited on 11/14/23 at 7:34 pm
Posted on 11/14/23 at 4:57 pm to Lgrnwd
My 53yo 401k projection makes me sad compared to you. With 6% growth, it says I should have $1.44M.
You must also make a sizeable amount of money and have great public schools in your area. Oh the things I would do with the $50,000/year we spend on private school in Metairie.
You must also make a sizeable amount of money and have great public schools in your area. Oh the things I would do with the $50,000/year we spend on private school in Metairie.
Posted on 11/14/23 at 5:11 pm to lynxcat
quote:
How do people get these sums in 401K when there is a max of ~$23K a year?
My employer contributes 20% of everyone's W-2 into our profit sharing plan up to the max allowed by the IRS, which is 66K. It's incredible. I don't know how common that is though.
Posted on 11/14/23 at 5:18 pm to Lgrnwd
I'm not shocked at the amount of money you have. I am shocked that you have that much in a 401k.
Can you walk me through this? Are you sure its a 401k and not a SEP?
I can put around $60,000 a year into my SEP but 401k limits are like under $20,000.
Can you walk me through this? Are you sure its a 401k and not a SEP?
I can put around $60,000 a year into my SEP but 401k limits are like under $20,000.
Posted on 11/14/23 at 5:22 pm to TheWiz
quote:
You must also make a sizeable amount of money and have great public schools in your area.
I do well. Entered a high stress, long hours, high pay career in my 20’s. And lived below my means, payed off a relatively modest house quickly(yea I know that’s “dumb”). Sacrificed to get to my current financial position.
And yes, I live in an area with a good public school.
Posted on 11/14/23 at 5:25 pm to Lgrnwd
What are your monthly expenses?
Posted on 11/14/23 at 5:27 pm to I Love Bama
quote:
401k limits are like under $20,000.
IRS limits for total contribution between employee and employer goes up to $69K in 2024. The $23K limit is for how much you can personally contribute
Posted on 11/14/23 at 5:30 pm to I Love Bama
quote:
I'm not shocked at the amount of money you have. I am shocked that you have that much in a 401k.
At 53 I will have been maxing out 401k contributions, plus company match, plus some after tax contributions for 25 years. While managing to achieve over “average market returns” yearly on my money up to this point.
This post was edited on 11/14/23 at 5:33 pm
Posted on 11/14/23 at 6:02 pm to Lgrnwd
And your wife contributed as well?
I was able to get to a $3M+ figure at about 30 years of maxing 2 401Ks…but did not assume employer matching.
Regardless, you need more after tax dollars in brokerage or liquid cash to hold you over before you can access the 401K monies.
I was able to get to a $3M+ figure at about 30 years of maxing 2 401Ks…but did not assume employer matching.
Regardless, you need more after tax dollars in brokerage or liquid cash to hold you over before you can access the 401K monies.
Posted on 11/14/23 at 6:32 pm to Lgrnwd
These numbers at 53 would be safe for “retirement.” You also said you could work from home for $1000 a month so it’s really more cutting back work than actual retirement. You could always scale up your work from home if needed or take one vacation instead of three. You have flexibility in adjusting your budget and little fixed costs. Just don’t get crazy with your investments and diversify risk.
Posted on 11/14/23 at 6:57 pm to Lgrnwd
quote:
I am aware there is a penalty for 401k withdrawals at that age, but I think I can absorb that with those numbers.
Don’t do this. Set aside some cash now and try to bridge the gap.
But otherwise you have an okay plan and should be proud of yourself. I could probably retire on that at 55. But I am not most people.
This post was edited on 11/14/23 at 7:01 pm
Posted on 11/14/23 at 7:35 pm to Lgrnwd
You’re in the top 5% of net worth in the US and you’re asking if you’ll be ok. Definitely a brag thread
Posted on 11/14/23 at 8:21 pm to Lgrnwd
quote:
3 million in 401k, house and vehicles paid off (debt free), $1500 a month pension, $300,000 in savings/liquid accounts, 50% employer paid to health insurance.
I retired years ago at 48. At that time my wife and I were 60% taxable with a ton of loss carry forwards, 5% cash/near cash and rest 401k and Roths, and a little over $60k in a HSA account at Fidelity which has grown as we have not touched it. Not knowing what tax rates will be in the future having an inordinate amount of funds in a taxable 401k could lead to some challenges. Our investment balances have grown to where we could spend $200k/year but we are currently under $130k spend rate, and my wife will start a small pension in 5 years and we will claim SS at some point but likely put it off until 67'ish. House value is roughly $825k and we owe $240k @ 1.625% for 59 more months. I think you would be fine, but if you are going to work another 5-6 years I would be stuffing money in Roth 401k, taxable brokerages, and tax loss harvest like crazy when the opportunities exist. I am going to get f'd this year due to the MMP acquisition in September and they sent me $36k in cash to offset 10+ years of non-taxed distributions, don't invest in MLP's as you will have to pay out the arse further down the road. Good luck.
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