Age when you started to max out your retirement accounts?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
JD2775
Posts: 177
Joined: Thu Jul 09, 2015 10:47 pm

Age when you started to max out your retirement accounts?

Postby JD2775 » Sat Oct 24, 2015 10:31 am

Just curious as to others situations...although I bet it will make me feel bad about my own ;)

I woke up when I turned 40 (this past February) and realized I needed to really start saving more money. That is when I started to max out my 401k and Roth IRA at the same time. Until that point I had been putting 9-11% into my 401k (about half the max) and a couple hundred dollars into the Roth per month. Oh, and I didn't even start saving for retirement until I was 30. I know, late to the game.

Big change for me but it is worth it and I have learned to adjust spending in other areas...

What about you?

dbltrbl
Posts: 771
Joined: Thu Mar 01, 2007 11:52 am

Re: Age when you started to max out your retirement accounts?

Postby dbltrbl » Sat Oct 24, 2015 10:39 am

Never. Just Retired. Depends on your income and expenses. Start savings. Do not worry about maxing out. More you can save better.

CantPassAgain
Posts: 268
Joined: Fri Mar 15, 2013 8:49 pm

Re: Age when you started to max out your retirement accounts?

Postby CantPassAgain » Sat Oct 24, 2015 10:42 am

Three years ago at 37. Trying to fall asleep one night while my mind was wandering....and almost had a panic attack.

Decided to start maxing 401K and a Roth the next day. Then at 38 started maxing spousal Roth as well.

Spouse has a terrible 401K so we forgo contributing there. We couldn't afford to max it anyway. Whenever we have more money, we throw it at a small car loan and eventually (hopefully) the mortgage.

Started saving for retirement at 30, and meagerly at that. The amount saved between 30 and 37 makes me :oops:

livesoft
Posts: 55073
Joined: Thu Mar 01, 2007 8:00 pm

Re: Age when you started to max out your retirement accounts?

Postby livesoft » Sat Oct 24, 2015 10:44 am

We always maxed out retirement accounts since when we got jobs. But that doesn't mean much because back in the 1980's the contribution limits were so low compared to nowadays.
This signature message sponsored by sscritic: Learn to fish.

sport
Posts: 5634
Joined: Tue Feb 27, 2007 3:26 pm
Location: Cleveland, OH

Re: Age when you started to max out your retirement accounts?

Postby sport » Sat Oct 24, 2015 10:48 am

Most people do not earn enough to max out all available retirement accounts. You should consider yourself fortunate.

Grogs
Posts: 352
Joined: Tue Mar 24, 2015 4:55 pm

Re: Age when you started to max out your retirement accounts?

Postby Grogs » Sat Oct 24, 2015 10:50 am

Barring some catastrophe, this year (42) will be the first, so I guess you're doing better than someone here. :) It's not like I was blowing all my money on parties and expensive vacations before. I just wasn't making much, especially from about 2004 to 2010 when I was in grad school. This is just the first year that I'm making decent money and I'm no longer having to save up for a down payment or other big purchase.

I was able to max the Roth in 2013, but I was only contributing 6% to the 401k to capture the full company match. I doubled the contribution percentage twice this year - first to 12%, and then to 24% to catch up and get the full amount in by December. That was a little intimidating seeing the paycheck go down each of those times, but it really wasn't bad after it was done. Come December I'll be able to start lowering the rate again so that will be cool.

JD2775
Posts: 177
Joined: Thu Jul 09, 2015 10:47 pm

Re: Age when you started to max out your retirement accounts?

Postby JD2775 » Sat Oct 24, 2015 10:52 am

sport wrote:Most people do not earn enough to max out all available retirement accounts. You should consider yourself fortunate.


No argument there, I am fortunate. I just wish I was a little more wise with my money in my 30's. Oh well, live and learn,,,

MrNewEngland
Posts: 529
Joined: Sun Sep 28, 2014 11:38 am

Re: Age when you started to max out your retirement accounts?

Postby MrNewEngland » Sat Oct 24, 2015 11:00 am

I am maxing them out for the first time in my career at 37. But honestly I don't know how so many people do it. $23,500 / year is a lot of money. I just got a big bump in pay this year that enabled me to do it but I live fairly frugally. And by frugally I mean I bought a house for much less than I could afford, I don't drive an extravagant car, and I even have a roommate (although that more bc he's a friend and less for financial reasons). Now I still go out whenever I want and go on trips if the opportunity arises... but I honestly don't know how some people do it. You'd have to make $117,500 and contribute 20% to hit those limits. Seems easy but with a big house and a family it must be hard.

RobInCT
Posts: 393
Joined: Sun Dec 09, 2012 2:58 pm

Re: Age when you started to max out your retirement accounts?

Postby RobInCT » Sat Oct 24, 2015 11:10 am

I think there's too much focus by some people around here about "maxing out your retirement accounts," for a number of reasons. For one, the "maxing out" amount is really just an arbitrary number set by the government that usually bears no more than minimal, if any, relationship to the relevant factors one should consider when determining the appropriate savings rate, e.g., income, availability of other retirement resources (taxable savings, pensions), health, etc. It can also vary wildly from person-to-person and family-to-family for reasons not related to the family's actual retirement needs.

Imagine a 2-income family of four with a family income of ~$75k/year (low for this board, but substantially above the US median family income). They might well have $47k of retirement space available per year [2*(18 + 5.5)], but trying to max that out would be ridiculous and would result in a consumption income only slightly above the federal poverty guidelines.

Imagine a 1-income family of four making $300k/year. That family might only have $29k in retirement space available (401k, Roth, spousal IRA), but if they're really only saving $29k/year, that's pretty foolhardy, particularly since it would seem to indicate at they have very high consumption needs that their comparatively meager retirement accounts will not even come close to meeting in retirement.

I have maxed out retirement for the last 6 years (ages: 30-36) and will probably do so again in 2016. But at some point next year, I'm taking a substantial and planned-for pay cut to accept my dream job working in state government. Within a couple of years after that, my partner and I hope to start a family. I doubt we''ll ever max out our retirement accounts again.

User avatar
rob
Posts: 2770
Joined: Mon Feb 19, 2007 6:49 pm
Location: Here

Re: Age when you started to max out your retirement accounts?

Postby rob » Sat Oct 24, 2015 11:15 am

I've never maxed out the 401K but most years have got the max into a Roth IRA and in some years taxable savings. Saving is better than not - don't let this crowd discourage you... it's more heavily weighted to prodigious savers with very high incomes by most peoples standards.
| Rob | Its a dangerous business going out your front door. - J.R.R.Tolkien

JohnF
Posts: 94
Joined: Mon Sep 02, 2013 7:29 pm

Re: Age when you started to max out your retirement accounts?

Postby JohnF » Sat Oct 24, 2015 11:17 am

Back in 1970 at age 24 I began a 30 plus year with a Fortune 100 Company. At that time they had an “Incentive Investment Program” (later became 401k) where one could direct up to 6% of salary with a match up to 50% dependent on the Company’s financial results. Over the years they slowly increased the 6% contribution limit up to 15% when I retired. This worked out very well for me.

User avatar
stemikger
Posts: 4318
Joined: Thu Apr 08, 2010 5:02 am

Re: Age when you started to max out your retirement accounts?

Postby stemikger » Sat Oct 24, 2015 11:23 am

JD2775 wrote:Just curious as to others situations...although I bet it will make me feel bad about my own ;)

I woke up when I turned 40 (this past February) and realized I needed to really start saving more money. That is when I started to max out my 401k and Roth IRA at the same time. Until that point I had been putting 9-11% into my 401k (about half the max) and a couple hundred dollars into the Roth per month. Oh, and I didn't even start saving for retirement until I was 30. I know, late to the game.

Big change for me but it is worth it and I have learned to adjust spending in other areas...

What about you?


I was about 31 before I started saving and I probably got serious with the saving at about 35 to 40. Not much different from your situation. I'm 51 now and take advantage of the catch-up provisions and put $24,000 away in my 401K and also get a 5% match from my salary. A few years back I only saved 10% for a couple of years because I wanted to pay off my mortgage. So I have a little catching up to do. If I am lucky enough to be employed until retirement, I plan to keep maxing it out.
Stay the Course!! ~ Press on Regardless!!!

2stepsbehind
Posts: 859
Joined: Wed Jun 20, 2007 10:03 am

Re: Age when you started to max out your retirement accounts?

Postby 2stepsbehind » Sat Oct 24, 2015 11:27 am

26 was the first year I had access to a 401k, but I was maxing out IRAs before then. Like the other posters suggested, your savings goals should have some basis in reality. I think focusing on a percentage is more realistic for middle income Americans and obviously if one is a highly paid professional, one arguably shouldn't settle for maxing out retirement accounts.
Last edited by 2stepsbehind on Sat Oct 24, 2015 11:29 am, edited 1 time in total.

User avatar
triceratop
Moderator
Posts: 2674
Joined: Tue Aug 04, 2015 8:20 pm
Location: la la land

Re: Age when you started to max out your retirement accounts?

Postby triceratop » Sat Oct 24, 2015 11:29 am

RobInCT wrote:I think there's too much focus by some people around here about "maxing out your retirement accounts," for a number of reasons. For one, the "maxing out" amount is really just an arbitrary number set by the government that usually bears no more than minimal, if any, relationship to the relevant factors one should consider when determining the appropriate savings rate, e.g., income, availability of other retirement resources (taxable savings, pensions), health, etc. It can also vary wildly from person-to-person and family-to-family for reasons not related to the family's actual retirement needs.


+1. For some of us "maxing out" is contributing $0 to an IRA and $0 to a 401(k). Doesn't, and shouldn't, stop me from a 40% gross savings rate.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

User avatar
Tyrobi
Posts: 646
Joined: Thu Jun 04, 2009 12:29 pm
Location: Florida
Contact:

Re: Age when you started to max out your retirement accounts?

Postby Tyrobi » Sat Oct 24, 2015 11:29 am

I started to max out at 32.

401(k)
Roth IRA
Spousal IRA
HSA
Three-fund portfolio | "Simplicity is the master key to financial success." John C. Bogle

mattshwink
Posts: 287
Joined: Mon Sep 21, 2015 10:01 am

Re: Age when you started to max out your retirement accounts?

Postby mattshwink » Sat Oct 24, 2015 11:41 am

I was 30 and my wife was 27 (we started when we got married) and have continued for 10 years, and hopefully until the day we retire.

Beth*
Posts: 709
Joined: Wed Apr 30, 2014 9:57 am

Re: Age when you started to max out your retirement accounts?

Postby Beth* » Sat Oct 24, 2015 11:42 am

Late 40's. But then the maximum I could contribute went up when I turned 50 and it took me a couple of years to catch up to the new maximum. But we started contributing as soon as we had jobs with retirement accounts. We originally contributed just enough to get the employer match and then we gradually increased our contributions as our income went up. Now we are in our late 50s and doing fine.

I think that the important thing is to just start contributing (initially, at least enough to get any employer match) and then each time you get a raise, increase your contribution by part of that raise. For example, if you get a 3 percent raise, increase your contribution to the retirement account by 1 or 1.5 percent of your salary. Do this until you hit the maximum contribution. You will still get a small raise in your take home pay and you won't notice the difference. Doing this also helps to prevent lifestyle creep, where your expenses go up as your income does and you don't end up saving any more money.

Don't stress out and decide that because you are not contributing the maximum you will never be able to retire. That isn't true.

User avatar
Peter Foley
Posts: 3886
Joined: Fri Nov 23, 2007 10:34 am
Location: Lake Wobegon

Re: Age when you started to max out your retirement accounts?

Postby Peter Foley » Sat Oct 24, 2015 11:50 am

I was about 35 when I got a promotion and a salary increase. I started maxing out my retirement accounts then. My wife's salary increased about the time she was 35 (she is 5 years younger) and we started maxing hers out then. It should be noted that at that time the contribution limits for 457 plans were far lower than 401k plans.

In part we were able to do this as our two children transitioned from full time day care to after school and summer day care. That was a significant drop in expenses for us.

JJP
Posts: 48
Joined: Fri Jan 11, 2013 11:06 pm

Re: Age when you started to max out your retirement accounts?

Postby JJP » Sat Oct 24, 2015 11:53 am

I just maxed out my 401k (18k) for the first time about a month ago. Age 26! The Roth IRA has been filled the past 3 or 4 years I've had it, and this year I'm also fully funding my HSA. Woohoo!

The tough part now is finding a place for all of the extra cash I have available after maxing the 401k. Most of it is going directly to my LifeStrategy Growth fund. I'm spending a little extra on myself too :happy

I will say this, living below your means is the absolute best way to fully fund retirement accounts. We all know this, but it is especially important to keep your expenses low, reap the benefits of rewards credit cards, and remain out of debt! Please though, go out and enjoy life once in a while. My job allows me to travel almost anywhere in the world, and I take full advantage of it.

:sharebeer

tj
Posts: 1795
Joined: Thu Dec 24, 2009 12:10 am

Re: Age when you started to max out your retirement accounts?

Postby tj » Sat Oct 24, 2015 11:55 am

I started maxing out at the IRA at 25 when I started my job, but the IRA contribution limits are much lower than 401k. I am only allowed to put so much in the 401k because of a lack of safe harbor compliance.

User avatar
englishgirl
Posts: 2431
Joined: Thu Mar 01, 2007 5:34 pm
Location: FL

Re: Age when you started to max out your retirement accounts?

Postby englishgirl » Sat Oct 24, 2015 12:02 pm

I haven't yet, and I'm in my late 40's. I still seem to be on track for retiring at 60 or less.
Sarah

User avatar
jeff1949
Posts: 595
Joined: Mon Mar 05, 2007 10:43 am
Location: Salem, OR

Re: Age when you started to max out your retirement accounts?

Postby jeff1949 » Sat Oct 24, 2015 12:56 pm

44

:sharebeer

achen9291
Posts: 265
Joined: Mon May 12, 2014 10:11 pm

Re: Age when you started to max out your retirement accounts?

Postby achen9291 » Sat Oct 24, 2015 1:05 pm

I maxed out Roth IRA at since the end of age 22. I maxed out the 401k since age 23. Now, I'm almost age 24, and will continue to max..

User avatar
Clever_Username
Posts: 720
Joined: Sun Jul 15, 2012 12:24 am
Location: Southern California

Re: Age when you started to max out your retirement accounts?

Postby Clever_Username » Sat Oct 24, 2015 1:12 pm

Let's see. 2011 was the first year I maxed an IRA. It was also the year I finished graduate school and started a job as a Post-Doc, and neither had a workplace retirement plan. In 2012, I took a job that had such a plan and maxed out both my Roth IRA and 401(k) that year. In 2013, I changed careers and for various reasons didn't max out my workplace plans, although I still put in five figures and did max out the Roth IRA.

In 2014 and 2015, I maxed out both my 403(b) and Roth IRA (and I-Bonds). For 2016, and almost certainly beyond, I'll max out my 403(b), but my income might not permit me to max out my Roth IRA, and I have too much in a traditional IRA to do a backdoor Roth.

As for age: first maxed IRA was in the year I turned 28 (low four figures of prior retirement savings before that), first maxed 401(k) was year I turned 29, and the start of the current uninterrupted streak of maxing out was the year I turned 31.
"What was true then is true now. Have a plan. Stick to it." -- XXXX, [i]Layer Cake[/i]

User avatar
Watty
Posts: 10515
Joined: Wed Oct 10, 2007 3:55 pm

Re: Age when you started to max out your retirement accounts?

Postby Watty » Sat Oct 24, 2015 1:51 pm

For perspective;

Up until 2001 the IRA contribution limit was only $2,000 and 401Ks were pretty rare until about then too.

Up until the mid 1990's IRA contributions for a non-working spouse were limited to $250.

Even adjusted for inflation it was not terribly hard to "max out" your retirement accounts back then.

I recently retired and am doing fine but there the are a lot of people my age and older that didn't have many good retirement savings options other than taxable accounts for most of their careers and many pension plans were frozen years ago.

User avatar
RyeWhiskey
Posts: 858
Joined: Thu Jan 12, 2012 10:04 pm

Re: Age when you started to max out your retirement accounts?

Postby RyeWhiskey » Sat Oct 24, 2015 2:03 pm

At age 25 I had enough money, after paying off undergrad loans, to move from the regular checking account to the money market account. I didn't understand the difference in interest and attempting to figure this out led me to learn about inflation, which in turn led me to learn about investing, which in turn led me to this forum.

That year I opened a Roth at Vanguard and have maxed it every year since. I also got three years of HSA contributions in and now have a taxable account that I contribute to regularly. I owe most of this prudent experience to this forum. :beer
This post was brought to you by Vanguard Total World Stock Index (VTWSX/VT).

knowledge
Posts: 81
Joined: Wed Mar 02, 2011 5:44 pm

Re: Age when you started to max out your retirement accounts?

Postby knowledge » Sat Oct 24, 2015 2:29 pm

By the time I paid off my student loans, I was making enough money to max out, at age 29.

ktd
Posts: 154
Joined: Mon Mar 10, 2014 8:19 am

Re: Age when you started to max out your retirement accounts?

Postby ktd » Sat Oct 24, 2015 2:50 pm

Pretty tough for 2 state employees household to max out retirement. Let's see 2 401ks 18,000 x 2 =36,000, 2 457s 18,000 x 2 = 36,000, 2 IRAs 5,500 x 2 = 11,000, total $83,000 a year.

DSInvestor
Posts: 10446
Joined: Sat Oct 04, 2008 11:42 am

Re: Age when you started to max out your retirement accounts?

Postby DSInvestor » Sat Oct 24, 2015 3:04 pm

ktd wrote:Pretty tough for 2 state employees household to max out retirement. Let's see 2 401ks 18,000 x 2 =36,000, 2 457s 18,000 x 2 = 36,000, 2 IRAs 5,500 x 2 = 11,000, total $83,000 a year.


On the opposite side of the spectrum, I worked in a little company for the first 10 years of my career and there was no 401k plan for 9 years. I maxed out IRA for 2K/yr and also invested in taxable accounts. My starting salary there was about 20K/yr. In year 10, they offered a 401k and I was able to max that out along with IRA on my salary which had increased to about 90-100K.

Once I left that job and became self employed, SEP-IRA or Solo 401k allows for much larger contributions than 401k plans provided by employers.

hnzw rui
Posts: 578
Joined: Tue Sep 22, 2015 2:26 pm

Re: Age when you started to max out your retirement accounts?

Postby hnzw rui » Sat Oct 24, 2015 3:21 pm

Depending on which vehicles you consider, probably never.

DB Pension: Automatic and mandatory at 10% of base pay.

Roth IRA: I've been lax with my IRA contributions. I only contributed for just 1 yr (2007-08) and stopped after getting scared by the stock market. I only started again last year and 2015 will be the first year I'll max it out (age 31). This one, I'm still kicking myself over. I easily had the funds in taxable savings (EF) to max this out and could have just put it in Roth IRA CDs for principal preservation. Now, I've permanently lost that very limited space.

457: This I've been contributing to regularly even if I had to cut down my contribution to just $100/paycheck on some years. Correction, there were a couple of years I stopped contributions completely when we got furloughed and mandatory pension contributions and employee share of health insurance premiums were increased (forget about retirement, Past!Me needed to eat and pay the bills somehow). I've slowly increased contributions for the past couple of years from $100 to $200 per paycheck and with a recent promotion, I think I'll be able to max out starting 2017/18 (age 33/34). I do believe I'll also be in the position to do age 50 catch-up as well as the 3-yr 2x special catch-up starting at age 52.

Larger Annuity: We have $53K after tax space in this program for 2015 (annual limits subject to IRC Section 415). However, there's a ton of restrictions so I'm not touching this one until I'm closer to retirement age. Besides, if I max this out, half of my remaining income will go to taxes and the other half to rent and I won't even have anything to eat. :|
Last edited by hnzw rui on Mon Oct 26, 2015 9:55 pm, edited 1 time in total.

Pizzasteve510
Posts: 635
Joined: Sun Jul 27, 2014 3:32 pm

Re: Age when you started to max out your retirement accounts?

Postby Pizzasteve510 » Sat Oct 24, 2015 3:28 pm

22 -> 51

Realize I have been fortunate.

DSInvestor
Posts: 10446
Joined: Sat Oct 04, 2008 11:42 am

Re: Age when you started to max out your retirement accounts?

Postby DSInvestor » Sat Oct 24, 2015 3:40 pm

hnzw rui wrote:Roth IRA: I've been lax with my IRA contributions. I only contributed for just 1 yr (2007-08) and stopped after getting scared by the stock market. I only started again last year and 2015 will be the first year I'll max it out (age 31). This one, I'm still kicking myself over. I easily had the funds in taxable savings (EF) to max this out and could have just put it in Roth IRA CDs for principal preservation. Now, I've permanently lost that very limited space.


For the benefit of other readers:
IRA contributions can be directed to many types of investments, not just stocks or CDs. If one does not want to purchase stocks with the IRA contribution money, that money could be directed to a Money Market Fund, bond fund, bond or simply left in the cash/sweep account in the IRA to await investment at a later date. The contribution must be made by the IRA contribution deadline or that contribution space is lost forever. The actual investment of the money once it has been placed inside the IRA can be made at any time after the contribution.

A good example if this is when folks want to use the backdoor into Roth IRA by contributing to Traditional IRA and then converting to Roth IRA later. The traditional contribution is made to a money market fund in TIRA which reduces or eliminates fluctuation in TIRA balance between the time of contribution and conversion to Roth IRA.
Last edited by DSInvestor on Sat Oct 24, 2015 3:48 pm, edited 1 time in total.

User avatar
Epsilon Delta
Posts: 6458
Joined: Thu Apr 28, 2011 7:00 pm

Re: Age when you started to max out your retirement accounts?

Postby Epsilon Delta » Sat Oct 24, 2015 3:45 pm

I started maxing my IRA at 23, my first full working year.
Then I stopped maxing when I got a new job with a 401(k) at 26.
Then I started maxing again when I got a raise at age 27.
Continued maxing his and hers IRA and my 401(k) when I got married.
Stopped maxing briefly when wife had temporary access to a 403(b).
When the contributions limits were raised ~2001 I continued to max .
As they continued to rise I had to draw down taxable savings.
Stopped maxing when I had depleted taxable as far as I was comfortable.
Stopped contributing when I took a job at a startup that pays squat.

--
edit to fix typo.
Last edited by Epsilon Delta on Sat Oct 24, 2015 5:00 pm, edited 1 time in total.

gator15
Posts: 286
Joined: Sun Mar 18, 2012 8:33 pm

Re: Age when you started to max out your retirement accounts?

Postby gator15 » Sat Oct 24, 2015 4:13 pm

My wife and I have been maxing my Roth IRA since we were 22 yr old. We started maxing out 401ks six years ago. We are very fortunate to be able to max both accounts. As a result I feel obligated to max out the accounts. I will continue to do so until I can no longer afford to do so.

User avatar
celia
Posts: 6007
Joined: Sun Mar 09, 2008 6:32 am
Location: SoCal

Re: Age when you started to max out your retirement accounts?

Postby celia » Sat Oct 24, 2015 4:28 pm

We started "maxing out" when traditional IRAs were first available. I think the limit was $2,000 then. :D

So you are doing a lot better than we did! FWIW, many years we couldn't max out, or even contribute anything, such as when unemployed or there were college expenses to pay.
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.

Goal33
Posts: 351
Joined: Sun Apr 12, 2015 12:30 pm

Re: Age when you started to max out your retirement accounts?

Postby Goal33 » Sat Oct 24, 2015 4:41 pm

Started maxing my Roth IRA when I was 20. I contributed when I was 19, but didn't make enough to max it that first year.

Started maxing my 401k this year through work at age 24. I could have started at age 23 but I didn't and I'm not sure why... Oh well.
A man with one watch always knows what time it is; a man with two watches is never sure.

hnzw rui
Posts: 578
Joined: Tue Sep 22, 2015 2:26 pm

Re: Age when you started to max out your retirement accounts?

Postby hnzw rui » Sat Oct 24, 2015 4:44 pm

DSInvestor wrote:
hnzw rui wrote:Roth IRA: I've been lax with my IRA contributions. I only contributed for just 1 yr (2007-08) and stopped after getting scared by the stock market. I only started again last year and 2015 will be the first year I'll max it out (age 31). This one, I'm still kicking myself over. I easily had the funds in taxable savings (EF) to max this out and could have just put it in Roth IRA CDs for principal preservation. Now, I've permanently lost that very limited space.

IRA contributions can be directed to many types of investments not just stocks or CDs. If one does not want to purchase stocks with the IRA contribution money, that money could be directed to a Money Market Fund, bond fund, bond or simply left in the cash/sweep account in the IRA to await investment at a later date. The contribution must be made by the IRA contribution deadline or that contribution space is lost forever. The actual investment of the money once it has been placed inside the IRA can be made at any time after the contribution.

I know you can invest in more than just stocks and CDs. I've never actually bought a single stock. I started my Roth IRA with the Vanguard STAR fund ($1K minimum). I think it would be more accurate to say I got spooked by market volatility. Apparently, it's one thing to think your risk tolerance is aggressive since you have 30 years before retirement, quite another to see your savings steadily going down month after month. Also, if you read the disclaimer on money market funds (typically used as cash/sweep account) and bond funds, it says there's no guarantee you won't lose money so that was enough to make me wary.

Back in those days, every news show was pretty much reporting a variation of the sky is falling and I was scared of losing my job and not finding work for 2 years like is often reported. I stopped contributions to STAR and redirected savings to the emergency fund in FDIC-insured high yield savings accounts and CDs. It just didn't register that I could have put IRA contributions in those same vehicles, too. That way, I don't lose Roth IRA space and I could have used the Roth IRA as my emergency fund. Unfortunately, I've already lost that space and it's not like I can get a do-over now. :oops: All I can do is to keep contributing the max going forward.

User avatar
sage1166
Posts: 148
Joined: Fri Mar 06, 2009 3:52 pm

Re: Age when you started to max out your retirement accounts?

Postby sage1166 » Sat Oct 24, 2015 5:54 pm

3 pay periods ago I started adding $692 each pay period (26/year) in addition to maxing Roth IRAs for myself and my wife. Age 30 for me and spouse. Hope we can sustain it as she needs a new vehicle (still driving her high school car and due for an upgrade in creature comforts if nothing else) to be purchased in the next few months.
A crowded police docket is the surest of all signs that trade is brisk and money plenty. | -Mark Twain

blevine
Posts: 1624
Joined: Sat Feb 27, 2010 3:57 pm
Location: Paradise

Re: Age when you started to max out your retirement accounts?

Postby blevine » Sat Oct 24, 2015 7:12 pm

Do not recall when I started to max out 401k, probably
very young age, maybe 30 or less. My thoughts were not so much, what could I afford to save, but rather I treated my income as what was left after maxing out. Lived as if that's all I could spend and there was no option to spend more. When that became less of a burden over time, decided to do same with TIRA and later 529 state deductible amount. Not all done at the same time, but certainly all before 40. Each time I chose to increase use of additional tax def accounts rather than increase lifestyle. Was a psychological way for me to motivate savings. Don't open yet another acct unless you are going to max it out, and stick to it once you start.

Have only been on one cruise, kept cars for 5-15 years, no leasing, may have oldest kitchen/baths in my area. I am ready to retire when the time comes that I must,
and my kids will go to college debt free. Was worth sacrifice to me.

Max out was taking full advantage of tax reduction,
but was mostly a way to be diligent and it worked for me.

User avatar
Meaty
Posts: 453
Joined: Mon Jul 22, 2013 7:35 pm

Re: Age when you started to max out your retirement accounts?

Postby Meaty » Sat Oct 24, 2015 7:15 pm

3 years ago at age 28
"Discipline equals Freedom" - Jocko Willink

Pinotage
Posts: 144
Joined: Sat Nov 12, 2011 6:02 am

Re: Age when you started to max out your retirement accounts?

Postby Pinotage » Sat Oct 24, 2015 7:20 pm

Started maxing 403b at age 27.

I remember reading a Motley Fool article on tax deferred savings and it just sort of clicked.

Discovered back door Roth IRAs at age 33 and started maxing that as well.

J295
Posts: 1006
Joined: Sun Jan 01, 2012 11:40 pm

Re: Age when you started to max out your retirement accounts?

Postby J295 » Sat Oct 24, 2015 7:26 pm

30 years ago at age 26. I was a young professional paying off our home, when a partner came to me and said he saw I wasn't maxing out into 401k and told me I should.

hadron
Posts: 24
Joined: Wed Aug 07, 2013 11:57 pm

Re: Age when you started to max out your retirement accounts?

Postby hadron » Sat Oct 24, 2015 7:33 pm

Since 2012 when I was 32.
Prior to that was too lazy to gain financial literacy.
Since then every year I max out my 401k and Roth (for me and my wife) plus buy broad market index funds in a taxable account.

RonBurgundy
Posts: 13
Joined: Sat Sep 12, 2015 1:59 pm

Re: Age when you started to max out your retirement accounts?

Postby RonBurgundy » Sat Oct 24, 2015 7:40 pm

I never maxed out my 401k when I was a full-time employee but did start out contributing 15% of my salary right away at age 22 (while making ~$33k/year) and always contributed at least 10% for the next 10 years or so. Unfortunately, I never contributed to an IRA during that time and regret not starting a Roth.

Fortunately, I discovered the Bogleheads in early 2014 so I did max out my SEP-IRA in 2014 (age 34) and will again for this year and going forward. We also maxed out a Roth for my fiancé for 2014 and 2015.

BogleBoogie
Posts: 410
Joined: Tue May 13, 2014 11:15 am
Location: AK

Re: Age when you started to max out your retirement accounts?

Postby BogleBoogie » Sat Oct 24, 2015 7:41 pm

ktd wrote:Pretty tough for 2 state employees household to max out retirement. Let's see 2 401ks 18,000 x 2 =36,000, 2 457s 18,000 x 2 = 36,000, 2 IRAs 5,500 x 2 = 11,000, total $83,000 a year.


Haha yes, good point! This is an interesting thread but mostly meaningless.

BogleBoogie
Posts: 410
Joined: Tue May 13, 2014 11:15 am
Location: AK

Re: Age when you started to max out your retirement accounts?

Postby BogleBoogie » Sat Oct 24, 2015 7:43 pm

Pizzasteve510 wrote:22 -> 51

Realize I have been fortunate.


Or fortunately, you realized it was a wise move!

BigLaw Survivor
Posts: 105
Joined: Mon Oct 19, 2015 8:55 pm

Re: Age when you started to max out your retirement accounts?

Postby BigLaw Survivor » Sat Oct 24, 2015 7:55 pm

I maxed out from the day I started working in my law firm 27 years ago. With no possibility of a pension and being in a high tax bracket I would have been crazy not to. I probably made a huge mistake by allocating almost all of it to stocks, so I lost 45 percent in 2008, but by staying the course and continuing to max out I was back to my 2008 high by the end of 2010 and the portfolio has increased in value another 75 percent since then.

User avatar
MikeWillRetire
Posts: 249
Joined: Fri Jun 29, 2012 12:36 pm

Re: Age when you started to max out your retirement accounts?

Postby MikeWillRetire » Sat Oct 24, 2015 8:54 pm

I'm 53, and I have never maxed out. Currently, I save $13k into my 401k. I didn't start saving until age 33. Still, by age 62, I will be able to retire. This is possible because I have been fortunate to have a working wife who also saves about the same amount as I do. Together, we don't need to max out.

JDDS
Moderator
Posts: 907
Joined: Sun Mar 16, 2014 2:24 pm

Re: Age when you started to max out your retirement accounts?

Postby JDDS » Sat Oct 24, 2015 10:29 pm

I started/maxed a Roth IRA at 23, though I should have started a year earlier, oops.

I started a SEP IRA at 24. I essentially maxed it when I was 25/26, I had rounded the contribution number. Maxed when 27 to the dollar, though I really should have started a solo 401(k) by then, oops. Since then I've maxed my solo 401(k).
Perhaps I have more taxable savings than I could compared to tax advantaged, but that's okay. I also will not be disappointed if I cannot max everything in a future year. I look at it is, max while I can and circumstances allow.

MathWizard
Posts: 2495
Joined: Tue Jul 26, 2011 1:35 pm

Re: Age when you started to max out your retirement accounts?

Postby MathWizard » Sat Oct 24, 2015 10:33 pm

This year for the first time,
mid 50's

I've been contributing to 401k to the match
then Roths for both my wife and I,
then 401k to stay in the 15% tax bracket.
This year is the first that will require
maxing out retirement account for the first time.


Return to “Personal Finance (Not Investing)”