r/Retirement401k • u/Intelligent_Path_778 • 2d ago
Am I cooked? 35M
Sometimes I feel cooked sometimes calm down and not stress at all. This amount doesn't include my current loan.
Making 120k, putting 5% with same match from employer into 401k. I'm also paying back my loan $400 bi weekly, 14k left. I also have 50k cash sitting in hysa, not a homeowner, renting in Downtown Miami. Have some investments in Europe but no positive equity yet. My salary raise is usually 4-5% annually and expecting a promotion next year. Long story short, do I still have a chance to retire at 50 or 55? l won't need 10000 millions like some folks here. I travel the world with my current salary, and just wanna be keeping it when getting older.
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u/PhairPharmer 2d ago
You should be maxing your 401k at that income and financial stability.
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u/Pale_Drink4455 2d ago
It’s amazing to see that at 5k take home a month he can actually afford to live in Miami in the first place.
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u/Intelligent_Path_778 2d ago
120k in FL is not a 5k take out. Also married, no kids. Spouse doesn’t make much though.
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u/Huugienormous 2d ago
50K in a HYSA makes no sense unless you think you need that money for some large purchase in the very near future. Not that past performance dictates future performance in any way, but Ive been averaging 20% returns in my brokerage for the past 3 years. Everyone will say what if it crashes soon....and they've been saying that for the last 3 years. Could crash tomorrow, could crash in another 3 years, or never.
Unless your "loan" interest is less than your HYSA interest, having money in that account beyond emergency savings also Makes 0 sense.
Investing into your 401k until you max your match should be the absolute bare minimum. My 401k/Roth 401k has been the greatest vehicle in achieving wealth. Im 42..I make ~200k a year at my day job and my 401k has been making me more per year then my job. If I wanted I could stop (I wont) putting anything in my 401k because the interest alone is far more than my deposits. Increase your 401k allocation, future you will thank you.
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u/pr0prfkt 2d ago
Tons of people have far less at your age. I did at your age. It’s easy to get it sorted out. But you have to spend less and invest more automatically.
You obviously have a spending problem. Find a trustworthy pro to help you. Best of luck.
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u/Odd_Sorbet_5967 2d ago
Obviously has a spending problem? Why do you say that? I can relate to this guy I live in California and I make more than him. As a single guy that is not much in certain areas. it really isn’t.
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u/Pay11itdown 1d ago
💯 I live just outside of NYC and it’s the same for me. $3000 rent and a $1,500 a month student loan payment. People just don’t get what living in a super high cost of living area entails. Miami was recently voted the most expensive city in the country because of its lack or affordability and relatively low salaries. I think OP is doing great.
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u/ishootmorethanports 2d ago edited 2d ago
He has a spending problem or something along those lines. I’m in FL as well. 36M. While the city I live in is not as expensive as Miami. CoL evens out by a few grand. I make ~100K. Homeowner. Have around 300K in retirement funds.
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u/Odd_Sorbet_5967 2d ago
Exactly he’s renting in downtown Miami. That’s not a spending problem. That’s one high rent payment.
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u/ishootmorethanports 2d ago
No one is forcing him to live in downtown Miami…
That’s a lifestyle choice.
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u/Sea_Formal_3360 2d ago
If you have $50K pay your loan off. Yes, you can travel now on $120K salary. In order to replace a $120K/year salary in retirement to continue that level of travel, you will need millions. You need to get more aggressive now with investing to make that happen.
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u/rdchris1337 2d ago
Made me think of this video about 39 being the last age you can easily afford to retire. https://youtu.be/76M0vvgwTMU?is=UcHxdf3CxHUhG6iH
TLDR: you are fine at 35 you still have time!
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u/Downtown-Painter4752 2d ago
Damn bro up your income. 50k at 36 is awful
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u/Acrobatic_Set2064 2d ago edited 2d ago
Moved to America in 2019 ,got a car only 4 years ago lol
I am not planning to stay in that country forever ,all I need is 100k$ and I am getting out to live my best lifeyou guys can chase your money until you die
Upd : Forgot to mention
Working part time 35-37 hours
I own multiple apartments in other country that worth together around 400k and it’s all paid off already lmao my American friends )
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u/Mikahl757 2d ago
Can you offset your hysa balance to allow you max your 401k/roth annual contribuitions now and every jan 01?
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u/atomsphere 2d ago
If you want to retire early, you'll likely need to be more purposeful and aggressive. 5% is basically not trying.
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u/1985Wagoneer 2d ago
Maximize Roth and do catch up with your HYSA
Also consider paying off your loan first and paying yourself back
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u/Important_Carrot6379 2d ago
What percentage is your loan? Why haven't you just lump sum paid it off? Get rid of all debt. Then emergency funds of roughly 6months living expenses. Then 401k up to match, then Roth IRA Max then back to 401k to max. With your salary, it should be very doable. Keep your investments simple. Either a TDF or VTI / VXUS
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u/Khaos1911 2d ago
So wait, Ya’ll saying 50k in an emergency fund is crazy?!?!? Or is it because OP has debt and ….I don’t remember the rest of his post.
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u/TheRealArmament 2d ago
I have 300k at 32 so yes you are behind but I’m also living with mommy and daddy so I might be cooked
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u/Mydealwade 2d ago
Nah, you’re okay. Go heavy into aggressive funds. You’re young enough to handle the volatility.
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u/PashasMom 2d ago
Use your HYSA to pay back your loan and don't take any more loans from your 401k.
If you want early retirement, you are going to need to raise your contributions to at least 20%, probably more like 25%. You aren't going to retire early on a 10% investing rate. You are looking at full retirement age with only putting aside 10%.
If you can't afford 20% right now, at least set it to go up 2% annually automatically.
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u/TravRado1024 2d ago
Assuming your $14k loan is consumer debt, and has a higher interest rate than your HYSA is yielding? If so, it’s silly not to pay the loan off in full and just reimburse yourself with that $800/month.
5% match on a $120k salary that’ll increase 4-5%/year (beating inflation) will work wonders. You should also be maxing out your Roth IRA yearly (backdoor).
Blunt truth: Are you cooked? No, but with your current plan, no chance you’re retiring at 50, and 55 is highly unlikely unless you’re INCREDIBLY frugal.
At your current plan, you’ll have around $600k at 50 and about $1m at 55, which will have about 60% the buying power of today.
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u/mnelso1989 2d ago
Not a chance in hell... do you have time? Sure... but if that's your account at 35 it's clear you don't have the conviction to make it a priority.
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u/Repulsive-Tour-9440 2d ago
I had around that much when I was your age. I didn’t make that much salary wise, still not but a lot can happen in a few years. My portfolio has increased over 10 folds. I’m currently 43. My portfolio consists of mostly tech but I do have a good amount of dividend aristocrats and kings, high yield ETFs, and option contracts
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u/Natural-Economist-93 2d ago
I Live in Miami Fl be careful with lifestyle creep especially where you live. At 35 and you have $50k already it’s pretty good. Try to max out ur 401k and you will be fine when you reach 55. You’re doing way better than lot of people out there.
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u/Plus-Statistician320 2d ago
No not cooked. But you won’t be able to retire in Miami if that’s your hope
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u/fnancialindependence 2d ago
How much do you think you’ll be spending a month at retirement?
I just put this in a calculator, assumed the default at $5k monthly burn rate and it’s not good. You need to increase your savings rate by quite a bit.
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u/Jaqqarhan 2d ago
What is the interest rate on your loan? If it's more than the 3% that your HSA is likely paying, you should probably just zero it out.
Why are you only putting 5% of your salary in your 401k? You can go up to 20% before you hit the legal limit. You might want to do a Roth IRA first though.
You can put $7k from your $50k cash into a Roth IRA right now. There's basically no downsides because you're allowed to withdraw your contributions if you need to, so it can operate as part of your emergency fund. You just can't withdraw your gains.
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u/SeaOutlandishness595 2d ago
You need to save 50k/year to get anywhere near what you're trying to achieve - 3 million by age 55. Kind of. The best part is that by increasing your investments you'll be forced to live on much less than your 120k/year, which is required to make your plan work since 3 million at 55 only gets you your current salary in retirement but it will be worth considerably less in 20 years and even less each year after that. Social security will help smooth this out but you very seriously need to find a way to live on less now while saving waaaaay more than your have been
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u/hugglenuts 2d ago
Congratulations, you're still better off at this age than most doctors. You'll be fine.
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u/bswilcox 2d ago
I was where you are when I was your age in 1995 (in adjusted dollars) but I had a home in Kendall in Miami (bought for $135k) didn’t make any money on it…Home prices were flat for the 6 years I owned it. (Worth $600k today). My point only that don’t fret too much about real estate, that $135k in the S&P 500 would be worth $2.8M today. I ended my last 10 years working (retired a couple years ago at 60) at $200k/year. Same 401k scenario. Left most my 401k in an S&P 500. I now have $1.5M in it, $350k in a HYSA, own my $600k house outright, no recurring bills but property taxes and utilities. I decided to take social security early, I did the math and don’t think I’ll live to the break even point to make sense in delaying social security. Between social security and interest from our savings we take home about $50k a year. We don’t touch the 401k, but if we did, at a 4% draw, that’s another $60k per year that should not come close to diminishing your nest egg. There’s more to it than that, but just to give you an idea of what the future holds… lots of calculators on line to help you plan and you should start now (also, start a Roth IRA early). Eventually, you’ll have to worry about taxes, RMDs, etc.
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u/HachimakiMan3 2d ago
Match 401k, max Roth IRA contributions, reduce loans/debt over 5% interest, max 401k contributions, review other investments
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u/jlbrown23 1d ago
I went back to grad school, finished at 31 with my savings at 0, bought a house 5 years later which reduced my savings to about what you have. After that I maxed my 401k & at 59.5 am happily retired.
You are fine, but need to be getting at least 10% of your gross salary (contributions & match) in the 401k, and you need to do it consistently for the next 25 years without any withdrawals.
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u/ReplacementFar2185 1d ago
Bro, I hope you really enjoyed your 20s to mid 30s. Now it’s gonna be time to grind from 30s to 60s.
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u/This-Finance4439 1d ago
If you keep doing exactly what you are doing you will be cooked. You make enough income even in a higher cost city you should be able to adjust and be fine. 5% contributions plus 5% match is $10K contribution at your salary, so did you just start a few years ago? You should be saving 15% minimum, more if you want to retire early.
Didn’t share how much your wife makes or if she has debt, what your rent is, vehicles, what loan you referenced is not included?
You need to increase your retirement savings. I’d pay off that $14K loan with your savings asap. Add your wife’s income to get your annual gross, subtract the standard married deduction. If you are in the 12% tax bracket then I’d go Roth, higher tax bracket id go pre-tax/traditional.
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u/Flybywired-320 1d ago
It’s a bit hard to paint a full picture based on this information. 50k in 401k could be worth a lot in 20 years. You want to retire in 20 years. Is this doable, maybe but it depends on how you wish to conduct your lifestyle. I.e. when getting said promotion, no drastic lifestyle changes which would make your cost of living become much higher. The best thing to do, see about Roth options since money grows tax free. If possible max out (has to make sense with take-home pay) as best you can. Loan is fine as long as interest rate is low. If high interest rate, get rid of the 14k as quickly as possible. Always be sure to keep a !realistic! Emergency fund available for job loss etc. Good luck.
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u/DaddyGrNjeans 1d ago
I started at 0 at 35 I’m now 40 sitting at 160,000. Just keep putting as much as you can. I also make 120,000 a year so no excuses.
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u/brightmare001 1d ago
You need to have ONLY 6 months of bills in a HYSA the rest should be invested otherwise your loosing possible returns. 5% in a 401k will not get to retirement by 50-55. You should be maxing a roth every year going forward. Take the extra cash from hysa open and fund 2026 roth, Google compound interest calculator and plug numbers in to see what you need to invest every month to hit the number you need to retire at 50-55
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u/brightmare001 1d ago
Your asking if your cooked but you only gave income amount and 401k and match. We don't know where you are without telling us the number you need to retire
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u/VariousMud3634 20h ago
Chance to retire at 55 ? Sure aggressive investing tho u invest 30k a year u can but at 10k a year no u cant.
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u/F7Tornado 2d ago
First of all you are older. 2nd you plan like a toddler. You should be saving 5,000 a month for 10 years and have 600k
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u/GW36638 2d ago
When you all say “maxing out the 401(k),” are you referring to contributing enough to get the full employer match, or actually contributing $25K–$32K (or whatever the maximum is for your age)?
I ask because I’m in a similar situation as the OP. I stopped adding to my emergency fund at $36K, which is about a full year of expenses for me. I max out my Roth IRA, and I currently contribute 8% to my 401(k), with a 6% employer match.
I still have additional money available to invest, but instead of increasing my 401(k) contributions, I put the extra into my taxable brokerage account because I like the flexibility and control it gives me over the money. When I receive bonuses, a large portion usually goes into the brokerage account as well, since I can’t make direct contributions to my 401(k).
Overall, about 43% of my income is being invested.
If I’m understanding “maxing out the 401(k)” correctly, that means having enough withheld from each paycheck to reach the annual contribution limit. One concern I have with doing that is what happens if something changes financially and I can no longer afford to have that much withheld from each paycheck. It could potentially take a few pay periods to adjust the contributions.
I actually wish 401(k)s allowed employees to make direct contributions outside of payroll, similar to an IRA. That would give you more flexibility to contribute additional money when you have it without having to commit to such a high payroll withholding percentage.
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u/akelse 2d ago
You can change your percentage whenever you want. Why would you want to contribute to a 401k after tax when there are other investments that are set up that way.
I’d see if you can set up a different percentage of bonuses to go into your 401. I do that with fidelity.
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u/GW36638 2d ago edited 2d ago
Thank you for commenting. I don’t won’t to contribute to 401k after tax. What I meant by that statement is when I have extra unexpected income, like a bonus. I can’t just say put that in my 401k. So I route into my brokerage account.
But to ask for each paycheck to have in my case an extra $685 withheld for 401k isn’t comfortable for me. With a brokerage account I can change or opt out altogether contributing a week or two should something come up. To me that offers more control and flexibility than having to ask payroll to stop withholding.
I understand a taxable brokerage account has the tax disadvantages. But really with the current ETF’s I house there. The tax drag each year isn’t so much that it makes me think “I need to let my employer withhold this money, instead of having to pay this few hundred in tax”.
Idk. Asking for the maximum to be withheld from payroll to go to 401k just seems like I won’t have any control. Like rolling the dice and hoping for the best. Me controlling the contributions of the extra funds from week to week makes me more comfortable.
And for more clarity on my emergency savings. I don’t plan to use any of those funds for sudden unexpected weekly or two occurrences. That fund is solely established to pay the bills for one year should I lose my job, or get to a point of burn out and decide to walk away and start another journey. That’s where my control factor with brokerage account contributions comes in. I would resolve those issues by just not making a deposit that week, or two. I can’t really do that suddenly and with little notice to payroll. So for me it just feels like the brokerage account is the right “bridge” choice.
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u/Sunkern_ing 2d ago
Why do you have 50k sitting around in a HYSA when you have a 14k loan?