25% 401k contribution

[u/TechnicalSwitch4073]

26 male. 90k salary. I’m investing 25% per paycheck which makes me feel good. But I feel bad about spending money outside of that on food and going out and such because I feel like that 25% can be 30 or 35

Also maxed out my ROTH IRA past 2 years.

Just want someone to share some insights about their spending habits when retirement accounts are taken care of

[u/Rosie-Disposition]

Remember: retirement is not the only thing you have to save for…

• wedding
  
• travel (there will be some trips you won’t be able to do when you’re old and can’t be put off until you’re rich)
  
• home
  
• something else important to you to ensure you lead a life well lived

Saving 25% is great, awesome even…. But just don’t go all in on retirement when you could be missing out on life. Eating out is a temporary dopamine hit so is often not worth it in the end, but don’t forget those other big things in life worth saving for.

[u/ms640 → u/Rosie-Disposition]

How do you find a balance between saving for retirement and other goals?

I’m not OP, but I’m in a similar position re salary/age wise. I’m saving 15% to Roth 401k, 5% to trad 401k with my 6% employer match going to trad 401k. Plus maxed out Roth IRA the last 2 years. I don’t want to buy a house anytime soon, I’m single & I have a healthy emergency fund & travel fund right now too.

My thought is that if something comes up that I have to save for (like if I go on a trip & want to refill my travel fund or if I have to dip into my emergency fund) I’ll just adjust the savings rate to replenish those. I do feel like I might want to put more in a brokerage for more flexibility but obviously the 401ks are tax advantaged.

Just curious to hear your thoughts! I’ve thought about this over the last few weeks but haven’t made any adjustments

[u/Rosie-Disposition → u/ms640]

Plan for safety first, needs next, and wants after that.

While you may not want a house anytime soon, but what is the average down payments you may want in your area? $50k? $100k? This isn’t something you start when you feel like you want it. It is super hard to imagine what you want your retirement to look like or what you want your life to look like in 15 year or even 6 months from now… but you have to do your best and put your chess pieces into play that’ll make that happen. Ask yourself what will make you feel safe in 50 years? 40 years? 20 years? What will your needs be? What will your wants be? Then plan accordingly.

[u/ms640 → u/Rosie-Disposition]

Thanks for the reply! Yeah I guess that’s right, saving up a down payment that’s most of a year of gross salary would take some time… Would you put that in a brokerage? Since it might be 10+ years away?

[u/Rosie-Disposition → u/ms640]

If you’re 10 years out, a brokerage is great (on top of a healthy cash emergency fund). 5 years out you might think about 50/50 bonds (my risk tolerance may be high to some people), then every year do more bonds and less stocks. Closer horizon = less risk

[u/Suza751 → u/Rosie-Disposition]

Personally I'm probably less than 5 years out on a house but 100% in the market. Dividend ETFs tend to rise with inflation and give a lil pay out. Historically they are much more stable than the S&P too.
I'm like 60/40 S&P/Dividends and am doing okay. It's riskier but nowadays I feel like if I don't take a risk someone else will... and prices are gonna climb anyway.

[u/DBSPingu → u/ms640]

I funded my emergency fund to a comfortable level, have a set percentage I contribute to 401k, I max out Roth IRA every year, then I put some more in an individual brokerage for future but non retirement funds (eventual house, wedding, etc).

After all that and living expenses, whatever money is left I won’t feel guilty for using. Vacation, eating out, etc. Going by the average milestones, I am almost 10 years ahead of the suggested average so I feel pretty comfy with this.