Maxing out an account is usually bad news. But with retirement, that’s the goal. These Americans are on track to cap their retirement, and they revealed to an online forum how much money they make a year to do it.
Note: Some quotes in this piece have been lightly edited for grammar.
A Penny Saved
Maxing out one’s retirement account happens by contributing the maximum 401(k) amount allowed by law. Many employers also have a percentage match for retirement accounts that helps speed up the road to retirement. It offers benefits like tax breaks and peace of mind for your future.
Not Quite There Yet
The original poster, a 24-year-old who makes $68K a year, says that even with living below their means, they cannot make significant contributions to their retirement fund like others. They asked the internet what they’re making to max out their retirement accounts.
One commenter makes $110K now, but they were maxing out their retirement well before. The strategy? “I moved companies and got a bump from $45k to $70k. Decided I was fine with my quality of life at the time and put that raise into my 401k.”
Choosing Your Battles
Making about $120k a year, one commenter sacrifices other prize items to make room for retirement. “My monthly expenses are $2.5-3k a month. After retirement and expenses, I only save about $1-2k per month. I want to buy a new car and a house, but saving up takes a while when maxing out my retirement accounts.”
“I started maxing [out my retirement account] around 100K, but the max was less back then,” says one savvy saver. “If you don’t inflate your lifestyle, you can save 95% or so of every additional dollar you earn. You could save more now by going pre-tax.”
Make Good Choices
One commenter shared they could do 457, 401k, and 403b plus IRAs in full when their household income hit $190k. “That was a little tight for us, after taxes, but doable. It just meant a little less for vacation. We could do Roth IRAs, 401k, and 403b with about $140k. It’s priorities and lucky/smart housing and car choices.”
One person who makes around $130K lives with their girlfriend, who makes about $55K, and they make it work. “I max my 401k, HSA, Roth, and put $225 a week into my brokerage account. GF maxes her 401k and HSA and is starting to add to her Roth. We spend between 5 and 6k per month all in for our 12-month average.”
There’s a Way
You don’t need to be a brain surgeon to save big for retirement, implies a former restaurant server who had been making solid headway. “Until I got fired the other day, I made about $60-70k gross as a server and had maxed out my IRA and 401k the last two years. I live at home and have almost no expenses besides a $550 mortgage and repair costs on a rental I’m fixing up.”
Keep It Up
One commenter makes $75K and has maxed out contributions in three different accounts but assures the original poster that’s not the important part. “Far more relevant factors than just my income are that I have no debt, own my car in full, and live with well-off parents for free. All of which is luck of circumstance, by the way. Most people saving a lot on less-than-6 figures have some sort of boon in their corner.”
Saving for Someday
As long as you make saving a goal, it’s possible for many. One commenter says, “I made it a priority and started my first full year out of school at $75K (although the pandemic led to salary cuts for most of that year, so really more like $68K). I live fairly frugally, but I was still doing that in a major city and enjoying doing stuff with my friends.”
Under One Roof
To max out their retirement account, a 24-year-old made some sacrifices with their living situation. “The only reason I can is because I live with my parents and have few expenses. I’m only making 40k currently and don’t have much left over to save.”
$95K is the golden number for one commenter. “Roughly my first salary after I finished my PhD. I was fine living on my Ph.D. salary at ~$33k, so I just continued doing it. Minimum lifestyle creep. I even sold my car. My housing is more expensive now, but I can max 401k, IRA, HSA, and save ~$2k per month.”
It was challenging, but one commenter says they could max out their accounts, making $70K in their 20s. “I paid $600/month, including utilities, in a crappy small city in the Midwest. I had a paid-off car and no student loans. On my parent’s cell phone plan, none or cheap vacations.”
Time Is Money
Maxing out your retirement isn’t an easy feat. One commenter offers encouragement to the original poster. “I’m investing 150k/yr, but up until last year, I had never maxed out any retirement account before age 37. I’m aggressive because I have some serious catching up to do. You’re still better off than me because you have time on your side.”
When it comes to major life purchases, this commenter is choosing retirement over a house. “I’m getting really close to maxing my 401k, and I have maxed my Roth IRA the past few years. I’m in a weird spot where I make more than enough money for my hobbies and lifestyle, but buying a house is so far away it’s almost impossible. Maxing out retirement accounts seems like the best idea.”
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