Joined: 15 Feb 2015
Location: Huntsville, AL
Saving too much for retirement?
I'm 31 and in the past couple of years I have become more serious about my retirement planning. Currently have $60k in 401k/IRAs and have contributed the IRS max for my 401k for the past two years, which also helps lower my taxable income. Last year I made about 30% on investing mostly in No Loads, shooting for at least 20% this year.
At what point are you saving "too much" for retirement? I really don't want to stop contributing the max towards my 401k because it helps lower my taxable income, anything to lower the bill to the IRS every April.
Sun Feb 15, 2015 3:11 pm
Wino Senior Member
Cash: $ 113.80
Joined: 03 Aug 2012
You can never save too much for retirement. That's like saying "You make too much money." Who is to say?
You can stop saving when YOU think you have more than you'll ever need. Want an RV? Those cost up to $5 Million (or more). Do you have enough for one of those? Do you want a private jet? $40 million isn't too much for one of those. Yachts? $300M isn't that out of the ordinary.
Stop when you have enough, which only you can determine.
Sun Feb 15, 2015 4:08 pm
oldguy Senior Member
Cash: $ 715.40
Joined: 21 May 2006
quote: I really don't want to stop contributing the max towards my 401k because it helps lower my taxable income, anything to lower the bill to the IRS every April.
I would keep putting in the $18,000/yr, plus whatever 'match' you get, prolly knocks $4000 or more off the annual tax bill.
quote: Last year I made about 30% on investing mostly in No Loads, shooting for at least 20% this year.
As for 'shooting' - I made a lot more money after I quit trying to beat, or time, the market - and learned to accept the market. In fact, it is liberating to understand that the market cannot not be analyzed/predicted - then you are free to simply invest.
The 'forever' longterm return on the SP500 Index is 11%/yr. Your $60k fund plus $18,000/yr @ 11%/yr is $1.62M in 20 yrs, about $3M in 25 yrs, and $5M in 30 yrs. (Actually more cuz the $18k/yr will increase w/ time). And remember the $5M keeps right on growing after you retire, at that point your $18M/yr is an insignificant part of the equation (I was surprised by that after I retired - most of us think about that goal as an 'end point' , it isn't.)
Huntsville - I did some work on Apollo at Marshall - but that was about 100 yrs ago, lol.