EDIT: $23k annual contribution max.
At what salary level did you start maxing your 401k? (Sorry if not appropriate for this sub.)
Same for me - started around when I got towards the top of that range
Same, I felt like it was achievable when the percentage saved was about 20% to 25%
Spent too long trying to figure out what a percent age was
So it aged you?
Same here. My 401k growth in the last 3 years has been more than in my first 15 years in corporate jobs. I’d put my salary into real estate before. Even factoring in buying low and selling high, maintenance, mortgage, and fees netted me less than market growth. I’m renting for the time being.
Me too! Sold off my house and rental property, maxing 401k every year now and loving life.
So much less stress
Can you expand on this a little bit more? This is interesting.
Just that it’s more favorable for me to rent and put the difference between rent and a potential mortgage into the market. That’s dictated mostly by the market I live in and current interest rates. The NYT has a good calculator for whether it’s better to rent or own depending on where you live and the type of home you want to live in.
For similar size home in my area, the rent is often as much, if not more than my mortgage payment.
Yep it varies by where you live, a lot. I’m in LA and buying a comparable condo to the apartment I’m in would be an extra $3-$4k a month. I put that into the stock market every month instead via 401k and other investment. I love LA now, but may not want to be in LA in ten years depending on work / family.
Nice.
Same here. I just happened to enter the working world when buying real estate was a better return than the stock market and other investments. It also needed very little cash to acquire it - maybe spent, $20,000 between two properties. Both in very nice areas although on the smaller side. Now it’s the opposite. Good to have both and I like the idea of real estate as a diversification even if it’s not the “best” method. I just really like home and dwellings.
Totally. I can wait for my dream home. I don’t really know where I’m gonna end up, but I want the flexibility and cash on hand until it feels right.
Happy cake day
Same, started making this around 2016.
Same. Started at $120k then backed off once my variable rate student loans hit 9.5% (total BS with an 800+ credit score). Paying $2k/mo until the end of this year to finish off my student loans then going back to maxing 401k, IRA, and HSA. We’ll be close to maxing wife’s 401k as well too, so that will be nice. Might finally take a lifestyle raise, but we’ll see.
Didn’t have access to 401k until my 30s, at which point I started contributing the IRS maximum on a salary of about $100k.
Damn. Well done. That feels aggressive to me. Traditional or Roth?
Making up for lost time! Traditional, because: High income tax state, good employer match, and low-fee platform (Guideline). I’m not a finance expert, it’s just what made sense to me.
Pre-tax vs ROTH contribs should be based on many things. The ones you listed aren’t ones that I consider a priority.
Just an FYI, it's just "Roth", named after the Senator (William Roth) that sponsored the bill that made it a thing.
What are your decision criteria?
Simply current tax rate vs expected tax rate in retirement.
Future income lvls and opportunity, future retirement location, plan allowance for after-tax in-plan conversion, current plan/need for extra salaried income from immediate tax avoidance.
In most cases, investing in the ROTH option (where available) makes most sense in terms of maximizing real dollars at retirement.
It’s not aggressive especially starting that late.
Exactly what I was thinking. I looked at the math and realized I’d need to work pretty hard to catch up.
Would you be comfortable sharing your current age and how much is your retirement account balance? Total understand if that’s too private to share
I’m similar age and plan to max out soon but not really sure how long I would need to do it for to be able to retire.
I started my 401k in 2009. Didn't start maxing it until 2012 (first three years I put in ~$4k, $10k, $15k). By end of 2023 the balance was $665k. Current balance is already $742k. As the balance grows, the good and bad years have much larger swings in the overall balance.
Damn this makes me feel bad lol
I know it’s hard but try not to compare yourself to others. Instead compare where you are tomorrow to where you are today. Someone gave that advice and it’s made my journey not only less stressful but more meaningful too.
The market has been good to us this last decade.
Sure, I’ll just blur the numbers for privacy. I am ~35 and my 401k balance is approximately ~$80k. I have only been contributing for ~three years, but not maxing out the first year—the high balance is due to a 100% stock portfolio and strong stock market.
You don’t have to limit yourself to 40#n type accounts for retirement savings. You can also save for retirement outside of those accounts—for example (but not an endorsement) IRA, max out ibonds every year, and $X is s&p 500.
This year!! New job with a 160 base. Also putting 5% into a stock purchasing plan 😁
ESPP? may be beneficial to max it out if you can.
If you can afford the lack of monthly cashflow it is often a good idea. We max my wife's plan out at $21k a year for an annual purchase plan. We get a 15% discount on the stock price at the start or end of the period. We sell it instantly and end up with between $23-$35k depending how the stock did over the year.
15% discount is phenomenal, I only a 5% discount….
Wow I’ve never heard of only 5%. Every company I’ve ever worked for it’s been 15% but not all do the better of price for the discount.
I’m curious what industry is only offering 5%?
That’s a loaded question, because I work for a Fortune 500 company work in a subsidiary of the company and we have a ton of lines of business, but one of the largest corporate insurers in the world.
I’ve spent my career in F500’s too, mostly on the comp & Ben side. ESPP often sits with benefits but I have seen it owned by stock admin too.
For a large company 5% is pretty stingy. Do they invest more in financial wellness through other avenues like an above market 401k match at least?
Also work for an F500 with a 5 percent ESPP. I get a 3 percent 401k match, so nope (at least for me).
Stock purchase plans are like doubling your risk in a company. You have to worry about losing the job AND the company underperforming.
See Enron.
Counterpoint, see Facebook, Google, Amazon.
Not everything is doom and gloom
My plan has a 15% discount at the lower price between two date periods. If the stock tanks, I buy at the 15% off lower price.
No holding period. It’s free money unless shit hits the fan the day after purchase date.
Same. I basically max mine out and sell right when the buy happens. Take the short term capital gains hit, and you're still making more than a high yield savings account.
Not if you sell right away. Guaranteed 15% profit in 6 months.
Of course the distribution date is during a blackout period right before your company releases their weakest earnings in a decade. Based on a true story.
Depends on how they are structured. Mine pools cash for 6 months and makes a single purchase at the end of the 6 month period at a 15% reduction to market then drops it in a brokerage. No vesting afterwards so you can sell it immediately. Basically, it’s like a 15% t-bill to me but taxed as ordinary income. Doesn’t make a ton but it’s something.
I worked for a pharmacy that stock-wise peaked in 2015 and has been on a down trend since. On the ground, it's clearly not well organized. Never touched their discounted stock when I worked there. If they couldn't turn it around during a pandemic, I don't know what will.
Not until I hit about $160k base. I should've started before that though.
My employer doesn’t offer a 401k and I am 27 turning 28.
Make sure you’re doing an IRA at the very least!
I just started mine at 29. Don’t feel like your financial future is over. People just have different paths. You never know how your next 10 years can shake out financially.
Get a new job asap
In my 401k, I first maxed out in 2014 when salary was about $71k. My wife didn’t max out until 2021-ish when I was making $100k and she was making $70k.
About the same for me. My first job after school I barely put anything in. All my raises went straight into my 401k until I was able to max it out. It only took 1 yr/promotion. I learned to live as if maxing my 401k ($17k/yr at the time) was a mandatory expense.
100%. It’s automated and we don’t even feel the deduction taking place.
Around $130k for me
I’m maxing it out right now at $75k. I’m also maxing my Roth IRA and HSA, and contributing $10k/yr to my HYSA and $10k to a taxable brokerage account.
That’s the beauty of living with parents after you graduate.
Around $120K, but I had debt so paying that off first was also a factor to free up more money to max 401k and Roth IRA
There seems to be two camps: the post ~$125k crowd and the early as hell crowd. I get the post $125k crowd, but even then it seems a little aggressive to me. After taxes, insurances, and post-tax Roth $23k contribution, you aren’t living on all that much, or rather you aren’t living a life I’d have thought that income would provide. Which makes me wide-eyed to everyone saying they maxed around $75k etc. that is just insane to me. How anyone can do that and still pay their bills is impressive.
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14d
I was probably around $70k when I was saving over 20% and maxed out (including Roth) just a few years later. “Pay yourself first”.
One doesn’t really notice the money missing if they save early and increase heavily with every raise. Any lifestyle luxuries I missed out on could not have provided me more happiness than having plenty of “f-you” money when I had a bad boss. Knowing I could walk away without having a backup job in place gave me the patience needed to make the jump to a much better job. Not having serious financial stress when you have kids will make you happier than any material purchase.
A bigger house and newer car are easy to trade for peace of mind and income generating assets. Any jealousy I may feel when a neighbor buys a new BMW or boat is short lived when I know my retirement and the kids 529’s are well ahead of schedule. The money I am contributing now is relatively small compared to the growth from smaller investments I started making 25 years ago.
My (oversimplified) advice for anyone entering workforce now:
1) Ensure you get the full benefits of a company 401k match. This is FREE money. 2) get debt free asap 3) then max out Roth before 4) going back to 401k (start at 10-12%, increase by 1.5% automatically)
The fruits of the above actions will grow to a massive number in the background. I’m now making almost my full salary passively on the growth from these investment and I’m not that old.
Why switch from 401k to Roth and then back to 401k? Why not first max out 401k and then move on to Roth?
I’m in the post 125k crowd. Early on, maxing out just meant getting the employer match. Later in our careers it meant putting every possible dollar in, once we realized a little sacrifice now will lead to long term compounding interest gains. For us there was no possible way to max out early when we were scraping by paying day care costs, diapers, car payments, etc. It’s a tough balance between saving for vacations, a new house, retirement…
Keep in mind there are people not indicating the years here. In 2005, they lifted the max contribution from $13 to 14k. It’s now $23k. Adjusting for inflation, making $125k in 2005 is making about $200k today.
Depends on your priorities. I started maxing it out when I had no consumer debts and a solid emergency fund to cover bills & expenses for at least 3-6 months. I would also consider saving for a down payment on a home if you’re currently renting.
Just a heads up, people are giving salaries from years ago and others are comparing those numbers to the current max.
That aside, I started maxing out my 401k as soon as I could afford to, which I think happened to come out to about a 16-17% contribution rate. Even when I was poor I was contributing at least enough to take full advantage of my employer’s match.
22 making 67,000
First year I maxed was 2017 ($18000), I earned $63k gross.
That’s incredible. I imagine your living situation helped support this. But rent was definitely cheaper then.
50k, My house/car are paid off.
If you’re going to ask this question, I think it’s important to define “maxing.” Some people using maxing in regards to contributing enough to get the full employer match, others use it in regards to the 402g limit of 23k, and others use it in regards to the 415c limit of 69k.
Good point. I meant the $23k. I’m not familiar with this 415c $69k you speak of.
Nobody uses it for anything other than the IRS limit of 23k, foh
RIP to anyone going through life thinking they are “maxing out their 401(k)” while just maximizing the employer match.
I was close to maxing out my 401k at around $130k/year, probably like $2k shy of maxing out, then I took a new job and got a big pay raise, so it’s maxed out after that.
$130k.
100k
I started at like $75k.
I’ll say, the limit was only $17 or $18k at that time.
As soon as it was offered.
Compound interest is magical
I'm very frugal, so even when I was making 32k I was doing max match and then some. Every year my contributions increased by 2%. I make about 55k today (7 years later) and have an emergency fund and just over 100k in my 401k. Though I might be taking a 15k loan against it for a down payment on a home.
Random question but does the employer contribution count towards the 23k max?
And to answer the question by OP, I started maxing out when I made about 95k.
No it does not. But how is it possible you've been maxing it already if you didn't know the answer to that?
No
60k
$75/80k at age 23 (2nd year working) - but I was super focused on saving/investing and living very VERY frugally otherwise (renting a room, chicken rice broccoli diet, no going out etc).
$53K.
At first I was only doing the 2% employer match.
Then I did the math and realized I could have $700/month in savings or I could pay more taxes and get barely $200 more in take home pay.
I was living austerely and hoping to have a higher standard of living (meaning more expensive) when I was older. Given the cost of living, it seems like maxing a 401K is the bare minimum for savings and while it’s more of a gamble than a pension, it’s the only option for keeping up with inflation. Just hope your retirement is timed right to avoid cyclical market dips. Social security will not save us.
I started contributing the maximum as soon as I got a job out of college, 20+ years ago. I was making just under 50K.
I've been contributing the max % allowed ever since.
I only did this for a year then I had to pay rent. So, I’m building back up to it over the next 10 or so years.
Somewhere in my thirties. I worked contact for years and didn't have any 401k in the l that period. Since then I've just set it to 10% and called it a day.
15% into espp also. employee stock purchase program. company matches 1 for 2 after a year since purchase. its all free money. my boss taught me, and i've taught my managers. you have to do it. silent wealth builder.
250k base (tech). Max 401k + HSA + 25k to ESPP yearly. Prior, maxed 401k @ 190k and HSA, but ESPP was like 10k-12k max
When my parent died and I inherited a trust
Probably around 75k but it was years ago when the limits were lower and when 75k was a lot more valuable than it is now.
I started maxing my 401k my second year of college, at my dad's behest. Also fully vested in the company stock purchase program, also at my dad's behest. He told me to eat at the school cafeteria and drink cheap beer.
Pops knew things.
100k in 2018, now 100k means peanuts
Depends if HCOL or LCOL area.
To "comfortably" raise a family a 4, estimated income of $177k in Mississippi vs $300k in Massachusetts.
I'm in the Midwest and 100K a year to me would be a dream come true. All a matter of perspective. As it is I feel ok on the 60K I make and at 80K I probably wouldn't really have to worry about money at all.
100k/year is still pretty good money in most places.
I did I from day one. Starting salary $68k. Had dual house income. My wife did the same thing making $95k.
You had put 30% of your income into retirement? Wild
Ya we are aggressive savers. Also paid off $80k of schools debt and saved down payment for home. Debt paid off in 3.5 years and had a down payment for a home in 4 years. My entire salary basically went to loans and savings. We definitely live modestly. We didn't have kids for the first 3 years of working and marriage which helped significantly. We are both in our mid 30s working our careers for 8-9 years. Current net worth is a tad over $1m work household income around $200k.
Mid 30s here with $850k NW, our HHI is about $290k now but we made big leaps in the last couple years we always made combined less than $150k.
You are going amazing with 1m in mid 30s way to go! I felt we were doing pretty good now that we are making more want to try to enjoy life a little.
I maxed out my 401k for the first 3 years of being able to; made $63k in a VHCOL area. This was in 2017. It was about 22% of my salary. Shortly thereafter I tapered it back to save to buy a home.
Today I put in a total of 12% of my salary, with my employers 6% match. It should be about $18k this year.
Best advice I received was to learn to live with less.
From the time I started working. 16.5k back then, I got my first job after grad school making around 95k which was pretty good for 2011.
After I hit 140k is when I started.
I did at about $75K, when the limit was $18K
When I first started working at 23. Always pay yourself first, before the government, by putting away pre-tax dollars. If you are granted stock or stock options put those in a Roth IRA. You won’t be taxed when you sell or exercise the options via the Roth, provided you take distributions when you reach retirement age.
I started with 10k per year on my starting salary of 40k at a fixed 25%. I maxed by the time I got to 80k 5-6 years later.
Now many years later, 20 years from retirement, basically require no more contributions for the rest of my life, although still saving.
I worked from age 13-18 to save for college college and worked full time in college to pay my way through to graduate with no loans. When I graduated I lived with roomates for 10 years. I switched jobs every 3 years to increase my salary.
I think everyone should try to do what I did, I have basically no stress ever about money.
$120k.
Around when I was making $180k base.
Immediately when I started working, when I was earning in the $60k-70k range. But that was only possible since I lived with my parents those years.
My brother and I both started maxing at around $120k.
I've been maxing the employer match since it's been offered. Doing the max IRS contribution, not there yet, but I'll do that once I hit 200k
$150k but prior to that I was making less and had student loans, was still contributing about $15k/year at that point.
Always try to max your 401k contribution to the employer match. The difference in your paycheck is almost nothing considering its pretax dollars.
Once moving past 150k made that decision easy.
I did with a base salary of 108k
About 140 and maxing the after tax (with Roth conversion) at 195ish. That’s 44k now.
$92k salary hitting the 23k max. But this is because my wife also maxes at her 150k base.
$58,000
For me, it depends.
1) I max the match. 2) Max HSA. 3) Save healthily in Brokerage for other opportunities / eventual freedom from work. 4) Consider increasing 401k or adding to brokerage.
But I also buy RE and believe in alternative investments w/ cashflow.
If I’m already on track or exceeding expectations with retirement savings, I’m likely to save less for retirement and more in brokerage.
I maxed out about 5 years into my career. Paid of my student loans first and then paid myself. $80k
At $61k. Single, no kids, and split rent with a housemate.
I maxed out 401K when I started my first job out of college in my 20’s. When I recently had a job change in my 40’s I just contributed the max the company would match (4%) in this case. Also max HSA.
Probably towards the 150k I started maxing out pre-tax, though limit was more like 18k then. Also maxing out post tax contributions past 220k I think. If you can really max out both for a max of what is it 60k or so now. The post tax one you can do some Roth conversion tricks with.
Who's gonna tell him social security tax has a max??? Same time I hope.
I started at 68k in 2018.
135k I think
My salary was 105 but after overtime and bonus it was 145k
With first job. However, made the mistake—at first—of doing it before-tax instead of ROTH.
I started maxing out when I was making 85K.
120k, I was maxed out by September, the rest went to ROTH and other brokerage accounts
Started at 23 at 100k
First job after grad school making 89k and maxed it. If it’s not in my checking account, I don’t have a way to spend it or let lifestyle inflation happen.
That’s a very underrated point
100k
Maxed out when I was making $30k in my 20s. I am GenX, but just seemed like if I did that and never saw it I wouldn’t miss it
By max, I mean the amount I was allowed to by the job. If you mean the max allowed by the IRS, that was when I was making 6 figures
at 150k ish i was maxing (federal limit) my 401k, HSA, and traditional IRA. i’ve been saving for 15 years and i’m at 1.2 mil.
115 or higher depending on situation
I’m making between 94-100k pretax depending on overtime and I am contributing just over 20k for the first time this year. Hopefully able to max in the next few years.
110k
What percent do you keep for discretionary and cash savings
I think depends a lot on your financial situation as well. Even back when I was just started making over $100K+, I put in the max percentage I could afford but it was not the annual IRS max. Sometimes it is not feasible to when you are saddled with undergrad and grad school debt.
Started from the beginning. I’m a bad saver so I’d rather know that money is locked up.
I think 80k in 2001. The max was lower than at 10k.
I’ll let you know if I ever get there.
When i hit around $110k I started
$100k
My company doesn't have a 401k but I would be able to make it out if we did
Good question
I only got offered a 401k once I got a job making $200k. My previous work was with a startup that had like zero benefits. At that point it was easy. Thinking about what-ifs, probably at a little over $100k.
The first year I paid Social Security off 2005.
This will be my first year maxing out my 401k. $180k salary. Also maxing out my HSA. 48yo. I'm so far behind.
My first promotion at my current company.
The cream went straight into the 401k. No lifestyle inflation whatsoever.
180
Day 1 at 47k/yr
Enjoy being depressed:
https://www.financialsamurai.com/how-much-should-one-have-in-their-401k-at-different-ages/
I personally do 30% only because I'm fortunately set up to do so. I Max out in about June/July (varies as I'm hourly with OT hours).
My company gives me about 35 options to invest in so i use the 2nd half of the year to do 2 things.
- Enjoy a 30% bump in my take home through the holidays
- See how markets are moving over that 6 month period and i can adjust my 401k if i want going into January.
About 180-200k avg.
As early as financially possible
About 120k I started maxing the regular limit (should have done it earlier), and at 200k I started maxing pre and post tax, 69k. Also maxing HSA and my wife and my Roth IRAs, and recently started 529s for my kids as well.
From day 1, $62k.
Still just put in what my company matches. 4%. The rest goes into a brokerage account, or RE.
No matter your salary you should be maxing contributions to ensure you max employer matched contributions
The American dream is only available for the top 5%, so sad that you need to make 6 figures but almost no jobs pay over 45k
Personally, I maxed 401k and IRA contributions once I hit about $90-95k and did both Roth, as I expect to have higher earned income in retirement.
Still, I understand this is abnormal. I'm not a miser, but I'm absolutely frugal with unimportant things and then big expenses when there's no compelling need. E.g., I don't buy brand name foods ever (taste the same to me) and I also have no need for a super nice car - a decent reliable commuter fits my needs.
Imo, find the things that give the biggest Quality of Life to Expense ratio.
Nice window view in a hotel on a vacation for $320 more on a 4 night stay? Unless you're going to sit inside, that's like maybe 2 hours of enjoyment at most.
A nice pair of $8 socks? absolutely worth.
$80k
Immediately
Got a bump from $65k to $95k and put the raise into it and maxed it.
Around 80k back in 2014 when the limit was 17500. Maxed a few years before that with the help of some bonuses.
This year will be just shy of max. 100k salary.
When I hit 200k in HCOL
$95k but I do have a 2 income household and have been maxing out ROTH IRA since $60k
I started maxing out once I hit 68k. It made for a really, really tight budget but I really want to be secure in the future and there was always a bit of hustling I could do for pocket money.
When I hit 6 figures.
@80k but my employer offers 10% match so it’s a little easier for me to max
I started maxing at 67k in AZ pre covid ($700 rent)
150 or so
90k around 2012 time period, so max at the time was 17k
65k, first job out of college
~100k
Immediately… or at least the company match.
Your future self will thank you.
I maxed as soon as I had a 401k. Tax free dollars yo
At around $100k I started maxing it out
I’ve been maxing it out since I started my first job at 23. But I’m one of those millennials who lived with his parents til 30s.
100k for me. But I have no kids and no debt other than a great recession mortgage.
195k
~80k, but I was young, single and had roommates so paid <$1k for housing and transportation combined and had just graduated. Starting out contributing super high amounts makes it way easier, can’t miss what you never had in terms of take home pay. I did actually ended up dropping my contributions for a while cause I wanted to have more cash on hand as a cushion.
I did my first year out of college (salary of $72k) and probably never will again. Hear me out: there are much better places to park your money both for short and long term.
So long as I can (back door) Roth IRA is the primary vehicle I will max out. Followed by HSA. Yes, get your company match (free money) but don’t stress past that. Roth IRA is a double tax advantaged and HSA is triple. Sure you can do a 402b or a Roth 401k but they will have practical limitations like access age and required minimum distributions. The Roth IRA can be accessed 7 years sooner and an HSA can be used along the way (limited purpose but still universal) until that same retirement age then the uses open up.
After both of these are met, there are still real estate, businesses, and non traditional investments you should consider to diversify your portfolio. I have real estate (both holdings and revenue generating), I have a brokerage centered around market index and a second around dividends, and I have non traditional like fractional lending, crypto and royalties to round out my 10% high risk/high reward portion of my portfolio.
If you have (or plan to have) kids, look at 529s or trusts. They will offer more benefits and convey more than a 401k would.
All of these offer earlier access to funds, are revenue generating, are a higher yield (and risk), or are more stable than a target 401k fund that gets hit with 5% management fees every year.
TLDR: don’t max out your 401k it’s not a smart thing to do
Hopefully people in here making ~$100-150k (or less) who are maxing out their 401k are also building emergency funds, maxing HSA, building savings and taxable brokerage accounts, and paying off high-interest consumer debt. Pretty wild to see people contributing 15-20% of their gross income in a 401k in order to max it out, so hopefully it’s not at the expense of other things that should take priority.
Started maxxing immediately with my first job out of college in 2022 when I was making $56k
This question needs inflation adjustment or does make sense
The moment you can afford to.
You need to max at ANY salary level. You will not miss the 6%. Give up some DoorDash or a couple movies on prime.
$16 an hour, 30%, maxed from day one.
I was already used to having nothing for decades.
i started at like $125-150k.