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Anyone here NOT maxing out their 401Ks or IRAs

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  • LivingAlmostLarge
    replied
    Originally posted by srblanco7 View Post

    The spreadsheet is more focused on modeling accounts & withdrawal strategies to manage taxes and future RMDs. I've always just had an investment portfolio target number and should be able to safely accommodate how we've historically lived and spent. As I contemplate moving up our ER date, I feel the need to get a better handle on our spend as part of the model.
    .
    want to share your spreadsheet? I love looking at people's stuff. Not your numbers just the spreadsheet

    Leave a comment:


  • terri77
    replied
    I max both 401k & IRA and have done so for many years. Next year I will add and max an HSA.

    Leave a comment:


  • srblanco7
    replied
    Originally posted by disneysteve View Post

    I'm curious what numbers you're putting into your spreadsheet if you don't yet have your spending figures. That's really the number that needs to come first. Or do you have a general number and just want to break it down more?
    The spreadsheet is more focused on modeling accounts & withdrawal strategies to manage taxes and future RMDs. I've always just had an investment portfolio target number and should be able to safely accommodate how we've historically lived and spent. As I contemplate moving up our ER date, I feel the need to get a better handle on our spend as part of the model.

    Leave a comment:


  • disneysteve
    replied
    Originally posted by srblanco7 View Post

    Similarly - lots of spreadsheet tinkering. Slowly convincing myself that ER is real, while we stockpile a cash cushion and set ourselves up for ER. What we have not done is track our spending - likely the next item for us to check off our list.
    I'm curious what numbers you're putting into your spreadsheet if you don't yet have your spending figures. That's really the number that needs to come first. Or do you have a general number and just want to break it down more?

    Leave a comment:


  • srblanco7
    replied
    Originally posted by disneysteve View Post

    I'm embarrassed to admit how much retirement "napkin math" I've done in the past 2-3 months. I've burned through many, many napkins.
    Similarly - lots of spreadsheet tinkering. Slowly convincing myself that ER is real, while we stockpile a cash cushion and set ourselves up for ER. What we have not done is track our spending - likely the next item for us to check off our list.

    Leave a comment:


  • disneysteve
    replied
    Originally posted by Jluke View Post
    I have heard of retired people having a hard time getting a mortgage if they are unable to show sufficient income.

    they may have a net worth of a million but lenders want to see income.
    I don't know how all of these folks get their loans. I'm guessing they put down substantial down payments and the mortgages are relatively small compared to the price of the homes. That probably helps a lot. I would think a lender would be much more likely to lend you 200K when you're putting down 600K than vice versa.

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  • Jluke
    replied
    I have heard of retired people having a hard time getting a mortgage if they are unable to show sufficient income.

    they may have a net worth of a million but lenders want to see income.

    as read on bogleheads over the years.

    Leave a comment:


  • disneysteve
    replied
    Originally posted by Scallywag View Post

    They probably won't use age, but our former credit issues as reasons to deny credit. I wouldn't blame them because we did **** up big time before we found Dave Ramsey. But it still worries me, even though our credit has really turned around and the last derogatory should fall off in 2022.
    They won't use (or even know about) any negative credit info from your past if it no longer appears on your credit report. If the last black mark goes away next year and you now have a clean record, that's all that matters.

    Leave a comment:


  • Scallywag
    replied
    Originally posted by kork13 View Post

    FWIW, age cannot legally be used as a discriminating factor in granting or denying a mortgage (prohibited by the Fair Housing Act). Almost without exception, it's solely based upon credit worthiness, income, and ability to pay (based on the size of the mortgage).

    That said, I stand by the original recommendation that you focus toward getting into the home in lieu of retirement savings for a brief period of time. You can spend just 2 years building up a hefty down payment, put it on a 15-yr fixed mortgage to ensure it's paid off BEFORE you retire, and then for those 15-20 years, you can easily build up the retirement savings you and your son will need. Over that time, the home will increase in value as well, and will provide more assets available for his care upon your eventual passing.
    They probably won't use age, but our former credit issues as reasons to deny credit. I wouldn't blame them because we did **** up big time before we found Dave Ramsey. But it still worries me, even though our credit has really turned around and the last derogatory should fall off in 2022.

    Leave a comment:


  • disneysteve
    replied
    Originally posted by Scallywag View Post
    I just worry that getting that mortgage may be very challenging for those above 50.
    Based on my personal knowledge alone, this is a non-issue. If you qualify, you qualify. Nobody cares how old you are. My cousin lives in a 55+ community in Florida. Homes there start around 450K and run into the 700s or more. They can't sell them fast enough. And the builder has since built several more communities in the area with even higher price tags, some going well over the 7-figure mark, and they sell out as fast as they can build them. Every single buyer is 55+, some are well over that into their 70s and beyond. Nobody seems to have a bit of trouble getting a loan.

    Leave a comment:


  • disneysteve
    replied
    Originally posted by QuarterMillionMan View Post
    The IRS maximum limits are too low IMHO.
    I've always said the IRA limits were way too low. Only about half of workers have access to a 401k, which has much more generous limits. I think that if you don't have an employer plan, you should be allowed to put as much into your IRA as what you'd be allowed to put into that employer plan.

    I think the 401k limit is reasonable. $19,500 represents 15% of $130,000 which is the 90th percentile of income so the vast majority of workers earn less than that and won't ever max their 401k accounts. Plus for the 50+ crew, the number is even higher.

    But $6,000 to an IRA is 15% of just $40,000 which is the 46th percentile. That limit should be way higher.

    Leave a comment:


  • kork13
    replied
    Originally posted by Scallywag View Post
    I just worry that getting that mortgage may be very challenging for those above 50.
    FWIW, age cannot legally be used as a discriminating factor in granting or denying a mortgage (prohibited by the Fair Housing Act). Almost without exception, it's solely based upon credit worthiness, income, and ability to pay (based on the size of the mortgage).

    That said, I stand by the original recommendation that you focus toward getting into the home in lieu of retirement savings for a brief period of time. You can spend just 2 years building up a hefty down payment, put it on a 15-yr fixed mortgage to ensure it's paid off BEFORE you retire, and then for those 15-20 years, you can easily build up the retirement savings you and your son will need. Over that time, the home will increase in value as well, and will provide more assets available for his care upon your eventual passing.

    Leave a comment:


  • Scallywag
    replied
    I have another question here.

    One reason we're prioritizing down payment is that we're both older and we're concerned that it may be more difficult to get a mortgage once we're above 50 (and have less than 20 years to retirement)! Does anyone know if this is accurate? We were spoiled brats when we were younger and previously had a checkered credit history (which we've "cleaned up" since "discovering" Dave Ramsey several years ago). We also took savings & retirement much more seriously after our son was diagnosed with autism (severe end of the spectrum) AND when I realized I may not get a large inheritance from my parents.

    All this to say, that's why it's taken us so long to get into a home of our own and we're really concerned that age may restrict our ability to buy a house! Anyone know anything about this?

    IF we made more / better money, we'd have LOVED putting the max in the 401K. DH now says that he does not want to retire before age 70. He's not exactly a workaholic but we're both worried about our son and want to have an income for as long as possible so that we don't have to "eat" into our retirement until ABSOLUTELY necessary so that our son eventually gets as large an inheritance as humanly possible, given our significant limitations.

    It's a different ball game because we're saving for our retirement AND his retirement (something the vast majority of people - THANKFULLY - do not have to do). The only reason we even need a home of our own is to protect ourselves against ever rising rents. Yes, we'll have to be pay taxes and insurance and be responsible for all the maintenance, but a nice yard, and a stable mortgage payment for the next several years would be nice.

    I just worry that getting that mortgage may be very challenging for those above 50.

    Leave a comment:


  • Scallywag
    replied
    Originally posted by QuarterMillionMan View Post
    The IRS maximum limits are too low IMHO. Combined Roth IRA & 457 (or 401k, 403b, etc) for a 50+ person is $31,000. I wish the IRS would raise it to double that amount. If I had a high deductible health plan I would max that HSA out as well at $3600. I don't have kids so no 529 which I would max out as well. If I'm missing any other savings plans please enlighten me.
    I thought the MAX combined ROTH + 401K was $33000 for someone aged 50 and above? ROTH IRA contribution is $7000, whereas 401K upper limit is $19500, and the "catch up" contribution is $6500? Did I get this wrong?



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  • QuarterMillionMan
    replied
    The IRS maximum limits are too low IMHO. Combined Roth IRA & 457 (or 401k, 403b, etc) for a 50+ person is $31,000. I wish the IRS would raise it to double that amount. If I had a high deductible health plan I would max that HSA out as well at $3600. I don't have kids so no 529 which I would max out as well. If I'm missing any other savings plans please enlighten me.

    Leave a comment:

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