3 ms·
Paradoxically, if you max your 401k/IRA/HSA every year, the higher your income, the less that money is going to be enough in retirement. If you earn 400k/yr and
by Kirby64 3y ago
Paradoxically, if you max your 401k/IRA/HSA every year, the higher your income, the less that money is going to be enough in retirement. If you earn 400k/yr and only save ~30k/yr, then that implies you spend 370k (incl taxes, so ... say, 250k) per year. You need MUCH more retirement savings than 30k/yr to manage that, unless you want to take a drastic lifestyle cut when you retire.
- VirusNewbie 3y agoUnless most of that is going to pay down a huge mortgage, pay for childcare, and pay off student loans?
- Kirby64 3y agoPaying off incurred debt is saving, especially if you pay it off early. If you retire without a mortgage but own a house, then you effectively have reduced your expenses by that much. The only thing to keep in mind is that debts like that contribute to negative net worth/retirement savings. If you have 200k in student loan debt, you have a -200k net worth (even if it costs ~250-300k to pay off due to interest...)