My questions below are based on this weeks Ramit Sethi newsletter, plus one or two active posts here.
Is there better advice than just keep ploughing up to $50-$100k a year into retirement funds when you may not even have one years expenses in your brokerage account?
The Ramit example this week was interesting.
$1.5M in retirement funds at age 35. Great! Ramit’s response?
Stop adding incremental $1k a month and put this money to use for your current needs. Either way you’ll have 8-10M in 30 years at age 65 in your retirement account. I.e. you’ve got enough momentum in retirement accounts, why keep adding to them if struggling with current expenses? (Saving for house down payment, saving for emergency fund etc).
What is the BH rule of thumb around this?
I personally am not struggling but very curious to figure out if incrementally adding to $2,5M at age 45 in retirement accounts will not make much difference at age 65 (+ two SS past second bend point!)
Personally, perhaps ratchet everything right down (just to get company match for example) and save more in taxable brokerage for near term goals next 5-10 years (supplementing 529/college, funding ER).
Are our BH rules too simplistic now that the actual $ amount we can potentially save as a couple is over $100k in tax retirement accounts? This was not the case before MBDR etc. I.e. 10 years ago the BH rules made sense. Now the rules of the game have changed, should there be more nuanced advice?
I’ll give an extreme example to make the same point.
Say I could put all my current income into MBDR if the rules allowed it, should I do this and live off my taxable assets?
What is the pivot point?
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Is there better advice than just keep ploughing up to $50-$100k a year into retirement funds when you may not even have one years expenses in your brokerage account?
The Ramit example this week was interesting.
$1.5M in retirement funds at age 35. Great! Ramit’s response?
Stop adding incremental $1k a month and put this money to use for your current needs. Either way you’ll have 8-10M in 30 years at age 65 in your retirement account. I.e. you’ve got enough momentum in retirement accounts, why keep adding to them if struggling with current expenses? (Saving for house down payment, saving for emergency fund etc).
What is the BH rule of thumb around this?
I personally am not struggling but very curious to figure out if incrementally adding to $2,5M at age 45 in retirement accounts will not make much difference at age 65 (+ two SS past second bend point!)
Personally, perhaps ratchet everything right down (just to get company match for example) and save more in taxable brokerage for near term goals next 5-10 years (supplementing 529/college, funding ER).
Are our BH rules too simplistic now that the actual $ amount we can potentially save as a couple is over $100k in tax retirement accounts? This was not the case before MBDR etc. I.e. 10 years ago the BH rules made sense. Now the rules of the game have changed, should there be more nuanced advice?
I’ll give an extreme example to make the same point.
Say I could put all my current income into MBDR if the rules allowed it, should I do this and live off my taxable assets?
What is the pivot point?
Statistics: Posted by Wannaretireearly — Sun Apr 14, 2024 2:04 pm — Replies 9 — Views 514