What you wish you would have done differently before retirement?

[UGADawg96]

I am now considered a "highly compensated employee" (HCE) and due to anti-discrimination laws, they can't discriminate against non-HCEs by letting HCEs contribute more than 2% more on average than non-HCEs contribute to their 401k.

There are ways around this, like employer matching to get non-HCEs to contribute at a higher rate, but my company is a staffing company (I'm a core employee of the staffing company in their IT dep) so my guess is that we have really low participation in our consultant population.

It sucks and it is not necessarily my company, but the IRS doing the limiting. My company just isn't doing enough to get more non-HCEs to contribute to their 401ks

You may get some relief in 2023 based on Mercer projections, but maybe not. Won't know until October, but it looks like the limits and classifications amounts will be increasing due to cpi/cola/inflation.

https://401kspecialistmag.com/2023-401k-contribution-limits-unprecedented-increase-projected/

https://www.mercer.com/content/dam/...-increases-to-2023-retirement-plan-limits.pdf

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[FrankThompson]

You may get some relief in 2023 based on Mercer projections, but maybe not. Won't know until October, but it looks like the limits and classifications amounts will be increasing due to cpi/cola/inflation.

https://401kspecialistmag.com/2023-401k-contribution-limits-unprecedented-increase-projected/

https://www.mercer.com/content/dam/...-increases-to-2023-retirement-plan-limits.pdf

That is my hope after talking to the account manager for our 401k plan at work. I guess the only bright side to inflation, but really.......is it worth it? LOL

 

[spud_41]

Well, at least the silver lining in all of this is there are 90,000 new IRS agents on the way. So be sure to cross your T's and dot your I's

Maybe I'll finally get my refund when they audit me... but I'm not holding my breath.

 

[Martzman]

If you have the option, to the best of your ability maximize 401k contributions including 'catch-up' provisions.

This all the way. Especially for those further away - social security may not be there, or at least not as helpful, during retirement the way some folks in government are talking.

 

[Chili]

I'm not sure what to expect in retirement but I'm putting 10% total into my 401k for the last 10 years (I'm 38) and we will have our home paid off in 15 years, right about the time the first is out of highschool so we will be able to help some with college.

Hopefully that's enough, but I'm kind of financially retarded when it comes to "looking ahead".

 

[zimmer0]

I'm not sure what to expect in retirement but I'm putting 10% total into my 401k for the last 10 years (I'm 38) and we will have our home paid off in 15 years, right about the time the first is out of highschool so we will be able to help some with college.

Hopefully that's enough, but I'm kind of financially retarded when it comes to "looking ahead".

You're in a good spot but would make a couple tweaks. I'm not a FA so take it for what it's worth.

Look at opening Roth IRA accounts for both you and your wife. Most will recommend doing the following:

1. 401k up to employer match - match = free money (100% return on your contribution)
2. max Roth IRA - use or lose it ($6500/account for 2023) - tax free growth and dispersement
3. Return to fill 401k to max (22,500 for 2023)
4. HSA if applicable
5. Taxable Investing (Brokerage)

Do you have any consumer debt outside of the mortgage? If so, pay this off and divert the would be debt payments to your investments/mortgage.

15yr pay off of mortgage is a great goal - opens up alot of cash flow later down the road, especially for college like you intend. Good luck.

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