Thanks for the added insight. You had indicated in a different thread that it would not be hard for an actuary to accumulate over $1 million in a 401(k) account over a career so I concluded tax advantaged accounts were still pretty important in the US.
30K if you are 50+.
i do not have an IRA, just 401k. i canât do a roth. so I can do non-deductible IRA and plan on immediately backdoor coverting the amount into a roth (so long term w/d are tax free and not subject to RMD). any additional amounts would be in a conventional investment account (where cap gains apply).
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Yeah, I had about $1 million in my 401(k) account when I retired. Although it is not an account per se, I would also view my primary residence as a tax assisted vehicle. My non tax-assisted investment accounts though were smaller than my total tax assisted vehicles.
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A million bucks ainât what it used to be. Iâm gonna need a few of those to retire
Iâm sure plenty of others can skate by on less
Ah yeah I forgot about the catch up contribution limits
Yeah definitely take advantage of the backdoor conversion or else you get stuck paying taxes on your investment growth. And worse - additional tax paperwork to file with the IRS
Are you already retired?
not retired. im old but not that old yet (or that well prepared). i have a min of 8 yrs and a max of about 12 left on current path.
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They most certainly are. Itâs the most common way to fund most or all of your retirement for most people, excluding things like Social Security, or Medicare which isnât so much âfund retirementâ as âhopefully have some quality of life for your twilight years.â Pensions exist but the one I was eligible for would have been a decent supplement, not an entire retirement.
$1M may be totally fine for a current retiree. I donât have the context to eyeball how adequate that is, but others here seem to be more in that range and content about it. If we work until 65, our joint 401ks and IRAs should be in excess of $10M, but we donât plan to work to 65.
Between a notable salary increase from a job change last year and the good stock market, we cracked $500k somewhere in the past month 
Hadnât checked the spouseâs 401k in a while. Half-millionaire status achieved. About 2/3 of it is Roth. Next goal, $1M.
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You should be pretty flush in retirement!
I am not anonymous so donât want to provide specific personal financial information. $1 million+ today in tax assisted savings is just one piece of the retirement puzzle. Most actuaries will probably have a mortgage free house at retirement and have social security income plus income from other non-sheltered investments.
As mentioned earlier, I have had no problem gifting large sums to children and it is tax-effective in Canada and I am not going to need the funds. As BBB has pointed out, a career actuary in the US should have no problem accumulating significant assets in addition to tax assisted plans. My tax assisted plan assets are actually larger now than when I retired 15 years ago as I only draw down the minimum required by tax law. Actuaries are a pretty privileged group financially.
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A near-guaranteed path to salary increases without a requirement for grad school debt is an incredible deal. There are more lucrative careers but not many that are also so stable.
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good gravy. thatâs impressive saving. i could get there if I worked in current role until I wasâŚdead I suppose.
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Any plans to change your spending habits? From what you have shared, it seems your income well exceeds your spending, and that will only continue to grow, especially once that mortgage goes away.
For me, i could potentially be completely debt free with the kids college tuition effectively saved in another couple years, which seems crazy, but you seem like you are 10 years ahead of that.
We have gradually become better about spending our money over time. Part of my early saving was that my partner has (one of two majors of) their degree in a career with high potential of very low earnings. (Think, like, being an author.) So right out of college I was focused on putting myself in a financial situation where, if they wished to dedicate themselves to that, we could support them. Eventually they went into a more lucrative career, they donât earn huge money but itâs quite good, a little below the median household income.
I should note we were lucky for me to get a full scholarship, and my partner a tuition scholarship with the rest paid by parents. (Lucky me as my parents were going to contribute $1,000/year, for which Iâd still be grateful but wouldnât have done much.) I also worked 20 hours/week in college and 40 in summer and sold my plasma.
Nowadays weâre a bit freer with our cash. I donât balk at a $120 dinner outing every month or two and $35 takeout every week or two. We have cleaners come in once a month despite being DINK - itâs just nice to handle the little stuff daily and have them scrub toilets and dust the tops of the fans. And my partner last night alerted me to a play happening downstate next month and I suggested we snap up tickets and go as a date, so we dropped $220 that moment and may get a hotel.
Iâm still pretty frugal, and where it makes sense I prefer to buy things outright rather than finance. We bought our ~4 year old vehicles for $10k and $12k outright, as well as the $15k shed we got last year. My partner grew up in perhaps not a â1%erâ family, but probably at least a 5% family, and had the opposite proclivity at first. I was frustrated when we were younger, renting, and saving for a wedding when they were working a retail job for $12/hour and spending $20/day on sushi, effectively wiping out 25% of their pay. We compromised that they could get sushi 1 time per week and otherwise had to pack lunch, do cheap McDonaldâs, etc. Today, I wouldnât really care, and if my partner asks if it can be sushi night, sure, we can drop $40 on that.
I think until weâve had a kid for a year or two I wonât feel fully on top of our finances. Thatâs the last major expense we should have in our lives (until retirement), but weâve started a 529 for the future child and are adding $100/month for now.
Honestly, 63 is my very conservative retirement age. Iâm hoping it can be closer to 55-58, perhaps as early as 53 or so. But Iâm thinking 58 is quite realistic if life doesnât take a major turn.
Sorry, you caught me procrastinating and thatâs a lot of detail.
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I was 58 when I retired. If I can do it you can! You seem better organized than I was and we had four kids to fund.
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This reminded me of something the financial planner said to us when we met recently âYou could consider a lifestyle upgradeâ
Lol. We live a nice lifestyle.
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It will depend largely on the state of healthcare when Iâm ready to retire. I havenât bothered to fully understand the implications of Medicare today because I assume it will be different by the time I retire, but I have expensive drugs for my ulcerative colitis (IBD). I literally just learned that in 2024 Medicare is changing to better cover drugs over the âcatastrophic thresholdâ, which Iâm assuming my drugs will fall into, but the lionâs share of the cost would still fall to me if the drugs are catastrophic.
Right now Iâm pricing in about $15k/year to pay retail for my prescriptions. The state of healthcare when Iâm approaching 50 may change my goal date by several years.
I suppose âlifestyle upgradeâ has become a consideration in the last few years but already also have a nice lifestyle. I donât want/need a bigger house, but might consider an upgrade that is smaller/nicer/uniqueâŚIâm also somewhat tied to the current school district for several more years. Cars excite me enough to replace them ever 10-15 years as I dont drive enough to wear them out.
Travel a lot more is a possibilityâŚconstrained a bit by the SOâs PTO time at her newer job. Maybe join a country club? Absent a significant change, work should become optional once I am 50.
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Could you do some moderate travelling with her having comparable leeway to spend on her own desires? Maybe not a 4-week vacation to Italy without your partner but visiting a friend in Chicago for a few days, the Grand Canyon, something mid-sized like that, whereas she has the âno raised eyebrowsâ ability to get a massage and mani/pedi every few weeks, or if cleaning tends to be more her thing and she wants to hire cleaners, no problem, or whatever things.
Iâm presuming your relationships to money are similar to us. Both of us could go drop $100 and just inform the other, but we do inform each other so weâre on the same page about our expenditures. Dropping $100 frequently on something entirely for pleasure like a massage might result in a discussion. A $1,000+ purchase would be an ask, and typically itâs something reasonable like a new freezer and is an easy yes.
Also suggesting anything else similar to cleaning where you would appreciate time savings. Maybe a meal prep delivery kit like HelloFresh, or at least grocery delivery if you donât do. Lawncare service/snowplowing if applicable. A friend of mine even runs a service that starting at $30 will clean up your dog poopy lawn. If youâre the type thatâs handy enough to struggle with home repair but you can do it, maybe itâs time to just pay $200 to have somebody repair it and save you 4 hours + $40 in parts.
Cleaning service is probably going to happen, we have had a family friend coming by once every 4-6 weeks to help her out financially, but no reason to not have that twice a month. I wish they did a better job, but i think itâs partly seen as a social visit rather than true cleaning job.
Our situation with kids and our exs is somewhat complicated and limiting to full family vacations (so no fancy trips for just the two of us). Going alone to visit a friend for a week or two is an open option⌠the challenge there is usually their ability to make the time.
My SO is clearing off her remaining debt this year, i nearly have the balance of the mortgage covered, and we are on track to start grossing half a million combined in the next few years (a result of fairly recent promotions with full annual bonuses kicking in). That all adds up to a big swing in disposable income, well beyond any incremental spending changes. Itâs seems you have this coming as well given your aggressive mortgage payment.
Whatâs the fun in that?
I enjoy most DIY projectsâŚi get bored easily so it gives me something to look forward to doing.
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