Old folks with experience (retirement stuff)

[92xj]

401k contributions maxed out with an additional 9%company match, do you create a personal investment account and add 1-3% each year or stop saving for retirement, because the 401k is enough and build personal savings for random big purchases every 5 years?

I know this is very vague and depends on a million circumstances but generically speaking, someone in the middle/earlier stage of their working life or so, 25 years more to work. I am kind tired of dumping all my money to 401k and now, after 11 years in my career, I’m finally maxed out ocontributions. Would like to dump that into personal random savings instead of another investment long term deal.

Two kids, 5 and 3. Both with college funds set up dumping 200 each a month into those accounts. Figure whatever is in them when they get to the college stage they can have for payments.

Wife is a teacher with state pension and whatever horrible 401k deal they have on top of the pension.

I should really pay for a financial planner but figured random weird hunters on Rokslide will suffice.

 

[Clarktar]

I'm not old and pretty green to preparing for the future. But with a Roth account you can always take out your contributions without penalty. So I'd toss that 1-3% there, let it earn and you can pull out contribution when needed. You can also take a loan out to yourself if you need more ....

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[Bland316]

It depends on total family income on whether or not you would qualify for a Roth, but if you do, that is where I would put the remaining funds. I would also only put up to the match in your 401k and max out the Roth for both you and your spouse. Roths grow tax free tax deferred and the income will be tax free in retirement. Once you get closer to retirement you can then do some advanced retirement planning with your social security.

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[Bland316]

You could also look into life insurance strategies after you max out the Roth's as cash value in life insurance can also be tax free if done the correct way.

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[gbflyer]

Just keep working.

 

[Ross]

Your well on your way, keep at it..my thought the more pots of $$$ the better…slowly steady and diligent wins the race to retirement funding and peace of mind that you have planned well…..so many unknown variables to each household and family situation…life is a balance, plan but also have fun….keep mrs happy and stay on course…like anything staying accountable is key.…..

 

[VernAK]

A. Start a hunting fund......as you hear on this forum, prices are climbing rapidly and ya gotta have priorities!

B. Do you have several months living expenses easily available in case of illness etc?

 

[92xj]

A. Start a hunting fund......as you hear on this forum, prices are climbing rapidly and ya gotta have priorities!

B. Do you have several months living expenses easily available in case of illness etc?

A. Hunting fund has been started and used often, I’m good there for now

B. We have an emergency cash pile that’ll cover several months of expenses.

 

[Bl704]

See if your employer offers other parks... E.g. Mine offers stock purchase at a discount - no tax bene unlike a 401k, but a 15% discount to hold their stick for a year. Another they offer is post tax contrib into the 401k (technically they have a separate fund because you can't comingle pre and post tax $).

You can do a separate investment fund, but you would use post tax dollars also. While no tax benefit a good way to build wealth, fund college or whatever.

My guideline, no more than ~4% of my stock in any particular stock, to help diversify. This, after taking a bashing in the pop of the dot com bubble circa 2001.

 

[Wrench]

It depends on total family income on whether or not you would qualify for a Roth, but if you do, that is where I would put the remaining funds. I would also only put up to the match in your 401k and max out the Roth for both you and your spouse. Roths grow tax free tax deferred and the income will be tax free in retirement. Once you get closer to retirement you can then do some advanced retirement planning with your social security.

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This is pretty much how I roll. Use the match money on the 401k and everything else goes to the roth. My TSP account has been hitting some incredible numbers....and I'll take as much tax free as I can.

Lots of guys play the market, and many are successful....but given the times we're in, I proceed with caution.

 

[5MilesBack]

Would like to dump that into personal random savings instead of another investment long term deal.

An investment account doesn't have to be long term. I can have money transferred from any of my brokerage accounts into my bank accounts very quickly if needed.

 

[Steve from GA]

If I missed this, my apologies - but I assume that you have already funded a savings war chest? Some people will disagree, but I recommend a minimum of 6 months cash in perhaps a money market or something that will earn at least a little bit of interest (though it's sad these days). I speak from personal experience when I say, DO NOT get caught off guard without a decent size firewall savings account and do not consider early 401k withdrawal as an emergency plan - that's more like the nuclear option.

So really, #1 is war chest savings and #2 is continue to max out 401k. For #3, I split my money between discretionary/recreational savings account and some "sandbox" investing.

What I mean by sandbox investing is, I picked some stock funds (some safe and some aggressive), created a small portfolio, and then set up small automatic transfers to fund that. I use the dollar cost averaging approach, meaning that I make regular, incremental investments over a set period of time (like 6 or 12 months), as opposed to throwing in larger sums in one go.

Whatever it is, whether it's stocks or real estate or whatever, do not stop actively investing. Find that balance between spending money on life experiences and investing, but keep strategically investing. You'll likely end up glad you did, and you'll be well diversified. Good luck!

 

[Marble]

With everything fully funded and 25 years to work, I would be paying extra on my house. That would be the final thing tying up money that can be invested. As soon as it is paid off then that money can be invested and grown.

With a paid off home you would have a financial foundation built on rock that no one could mess with. If death, disease or something dumb happens, you will always have shelter for your family.

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[rayporter]

i maxed out my 401k and then i started a war chest. eventually i paid off the house with it and then put the house payment into a savings plan. this got me debt free and allowed all those payments to be put aside.

i kept an account available for hunting and guns.

i retired at 51 because i had kept saving and the war chest was quit large. i lived off the war chest for 2 years and let my 401k grow. this turned out to be a very good move as it got me through a down cycle of the market.

if you blow it now it is real hard to recover!

 

[GSPHUNTER]

My wife and I both have good monthly pension and SS. I am now just applying for withdrawals from my investments because your govt. requires me to. I am going with minimum monthly withdrawal and will likely reinvest that. We live within our means and still get to do things we enjoy just like everyone who plans carefully. If I were in your position I would continue investing in medium to high risk stock. When I got closer to retirement I moved everything into low risk bonds and it has worked great for us. I have friends who staid in higher risk investments and saw their investments go in the tank. while mine were not making large gains they never suffered any loses.

 

[Keep On]

If you are maxing out your 401k with a 9% match, you are way ahead of the vast majority of people. You have 25 years to let it build. If you keep that level of contribution up for another 25 years you'll be sitting on a pile. Between SS and your wife's pension, you should already be set for retirement. Any financial advisor is just going to tell you that you have to save more, because he wants some commission money out of you.
Everyone has a personal perspective on how much to save, and how much savings is enough, but you also have to balance saving with living.
If you've already got an emergency cash fund, and it sounds like retirement is funded as are college funds for the kids, use what's left to pay bills and have fun. My .02

 

[HuntHarder]

I might have missed it, but is your 401k roth or traditional? My 401k is comprised of 80% roth, 20% traditional. If you do this right, when you retire, you can take small amounts from your traditional and still not be taxed on it because it counts as income and you will be below the threshold to pay income taxes.

For example: you need 60k to live on when you retire. So each year you take 50k out of roth 401k and 10k out of traditional. The Gov't see this as an income of 10k that year, since you already paid taxes on the 50k roth.

I am much in your same position as I am 37, only debt is 100k left on mortgage, max out my 401k for the last 7 years as well as a company match. I also have 529 accounts for each of my 2 kids, a broker account that I trade stocks in, a crypto account that I trade crypto in, a Roth IRA that I used to be able to contribute to but now my income excludes me from contributing more. I also have a savings account that has 3 years of living expenses in it, should I need them.

 

[Wrench]

You'll never realize how stress free life can be till you only need to cut a check for taxes and insurance. I pay 3k a year for those and average $225 a month on utilities.

That is REALLY relieving during these times.

 

[Ondavirg]

Best way to determine if you are on track for retirement is to figure out what your expenses will be when you retire. Healthcare is a bit of a wildcard, so be generous with that number. But likely your mortgage will be gone, as well as expenses for the kids. They say you can safely withdraw 4% of your money every year and never run out, but I’m shooting for a 3% withdrawal rate as my wife’s family lives well into their 90s and I don’t want her to run into trouble. Social security will be around in some form, so don’t forget that. It’s hard to know if you can afford to retire without knowing what you need. Several online calculators you can use to give yourself a retirement money goal.

 

[street]

HSA is good option if your employer has that benefit. 100% tax free.