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Some of you may know I've posted recently that I'm 100% debt free. I thought things would be easier this way but I'm somehow stressing myself out! My take home before overtime is ~1000k every 2 weeks. I have been working a ton of overtime lately but I don't expect that to continue as we will hopefully be fully staffed in a few months. Last year I maxed out my Roth IRA while contributing 6% to my 401k. While doing this I also paid off my car and student loan debts. I grossed about 58k last year, although my base salary is around 35k (thank you overtime!) With overtime drying up, I still finding myself contributing to retirement as if I was making ~60k. If I follow the standard rule of 15% it means I would need to contribute ~3600 to my Roth. If I max it out at my regular salary, it means I'll have contributed about 15% and plus my 401k I'll have 21% contributions. Part of is feeling guilty of not maxing out my Roth but the other part of me can't necessarily afford to max out my Roth. I have a wedding that I need to be saving for and a house down payment. I guess I don't necessarily have a question, but just needed to vent a bit and get a bit of advice. Is there much harm to slowing down retirement savings in order to meet other needs I have?
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Last edited by rutgers07; 03-07-2014, 03:43 PM. -
How old are you? -
29. I'll be 30 in October.Comment
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Congrats. Out of curiosity, What state are you in and do you have any bills such as rent, car, etc?Comment
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I live in Vermont. My current bills are:
Rent - $800 in a few months this will be down to $400 though)
cable/internet/phone ~ 200
Groceries - $150
Fun - $100 (usually spend less then this)
Food - 30
Vacation - 150-200 (this will only be until August
Misc. (gas, unexpected little bills) 100
Current Roth - 200
I have about 3k in EF which may not sound like a lot but it's enough for now. Job is very secure and I can take out of my Roth. I will try and contribute 150-200/month for that. Everything else is going into a general savings for things like the wedding/house down payment.Comment
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I guess I should have asked how much you have saved already for retirement. But you are still relatively young and I don't think there is any harm.Originally posted by rutgers07 View Post
My personal rule has just been to always put away a minimum 10%. Doing that consistently from a very young age has put us in a very good position with our retirement. (Some years we did much more, but just depends on the circumstances. Never any less than that, is the point).
"Maxing out" is a fairly random number that I wouldn't get obsessed about. IT's basically just picking a completely random number, which may or may not be relevant for your situation. IT has its benefits, but not if you can't meet your obligations while maxing out. OF course, the thing about the ROTHs is you can tap them if you need them, so I am okay with over-contributing to ROTHs. I don't know that I would hassle with the ROTH for money I *know* I need in the future. Like, if I was saving for a house. It is a lot of red tape. But, I just like the middle ground for the grey areas where I am not too sure if I will need the money or not.Comment
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@rutgers, there are huge benefits to contributing the maximum in your early years as the sum compounds over a very long time with potential to provide major benefits in the future. It's important to access any matching [free] contribution from employer as you divert some of your savings to other life events.Comment
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Thanks for the replies. I currently have ~15k split pretty evenly between my 401k and Roth. I think I just felt overwhelmed and stressed because I've been working a lot, but I'll stick with how I'm doing things now and if I truly start to feel pinched (when OT starts drying up) I'll scale back the Roth contributions for a bit.Comment
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