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Yeah. I'm surprised that I'm downvoted. If you are clearing six figures ( most software devs should in this environment ), you could max out your 401k/ira/etc (
by liftbigweights 8y ago
Yeah. I'm surprised that I'm downvoted. If you are clearing six figures ( most software devs should in this environment ), you could max out your 401k/ira/etc ( $40K ) to lower your tax basis and then save half the remaining income easily. Especially if you are single with no kids.
My biggest problem was hitting the max and not being able to shelter more income from taxes.
$40K per year in retirement + $20K or $30K in saving and interest + capital gains will easily make you a multimillionaire over 20 years. I don't think people understand how long 20 years really is and how consistent savings starts to add up.
As long as you don't gamble away your money or do something stupid with it, a six figure salary as a software engineer should make you are multimillionare ( in assets ) by your 40s.
- deanmoriarty 8y agoFully agree. Just out of curiosity, is the $40k pre-tax including 401k contributions of a spouse too? Otherwise, how can I, as an single person, achieve retirement contributions of $40k? In general, working for startups with crappy retirement plans, retirement accounts have been a big pain point for me, a big portion of my assets are actually held in taxable accounts, which is not too bad if you invest in tax efficient funds which at most provide qualified dividends, and during a downturn you can do some valuable tax loss harvesting, but I would gladly take advantage of more tax deferred space.