This is a good comment, I think that you need to look at the “drips turning into oceans” data with the right mindset. I think the benefit of doing that work is to make is feel like the little amounts set aside each paycheck actually matter. It’s probably a mistake to look at it regularly because as @Riverman says you’ll get the feeling that you aren’t making progress. However if you don’t do the spreadsheet work you’ll never convince yourself that saving a small amount per paycheck is even worth it. It’s a conundrum.
Wow. You just went full Riverman here.
I put the max 6% match into my 401k. I did this in the beginning and then forgot about it completely until recently. Never even noticed the money missing because I did it from the get-go.
I had this crazy good profit sharing program at my first company where I regrettably contributed the minimum (not like they paid enough to afford to be able to put in more) for almost 15 years. It’s nearly 100k now. Gonna just leave it in there.
I’m 32, and want to retire by 60. I think I’m making good progress but it’s really tough to determine how much I’ll really need. I’m thinking just assume I live to 85 (virtually no chance I live that long). That’s like 2+ million though :/ Anything left goes to kids or charity if I don’t have kids.
Only putting 6% for the match seems kind of low in your situation. Why not the full $19.5k… Unless that is the full amount then GG.
I’m saving at least that much per year - the rest is just going to other places right now. I have a vanguard account a lot of it is going into.
What are the benefits of just dumping 100% of my savings into 401k?
Huge tax benefits. Don’t do taxable investing until you’ve maxed out 401k, Roth (backdoor if necessary) and HSA (if available).
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I don’t have any kids but I would probably lean this way if I did. I mean I’d help them out but just straight up paying for college seems weird to me. I think I’d rather give or help them out with a down payment for a house.
For an example of what I’m talking about, here are two jobs on the university website:
Job 1
Summary: Provide technical and administrative assistance and perform data management functions in support of University research projects. At the direction of the Principal Investigator, curate genomic and neuroimaging datasets.
Minimum requirements: Bachelor’s degree in related field and one to three years’ related experience required.
Desirable qualifications: Familiarity with Unix and shell scripting desirable. Programming background including familiarity with R, python, or specialty neuroimaging software (e.g. AFNI, FSL Freesurfer) or specialty genomics software (e.g. PLINK, MACH) highly desirable.
Job 2
Summary: We are seeking a manager for maintaining our mouse colony and contributing to molecular and cellular research studies. This position includes breeding mice, weaning, tail biopsy for genotyping, tissue preparation, coordinating the animal research studies with investigators, training and advising new animal users in the laboratory. Responsibilities also include molecular and cellular assays and cell culture studies. The manager will both perform and provide functional supervision for all in vivo experiments by students and lab investigators. Animal care will include anesthesia, analgesia, radiography, drug dosing, and surgical procedures with post-treatment monitoring. Manager also serves as primary contact for all animal-related research, such as ordering mice and necessary supplies for mouse studies and maintaining accurate electronic mouse records.
Minimum requirements: Bachelor’s Degree in animal, biological or biomedical science with three years of related experience that includes animal research experience.
Desirable qualifications: Experience that includes performing mouse genotyping of litters, oral gavage, blood drawing, injections at subcutaneous, intra-peritoneal, mammary fat pad and intra-tibial sites, and molecular and cellular analysis.
Job 1 is listed at about $30k/year. Job 2 is about $35k/year.
While the cost of living here isn’t SF Bay Area or NYC levels, it ain’t cheap either. Housing prices by most estimates are about 30 to 50% above the national average. Minimum wage is $11.75/hour.
Either job would be a pay cut for me, so I’m not even considering them, but I’d be absolutely screwed if I lost my job right now. But if the low level jobs require this much and pay so shitty, I don’t know how I’m ever going to get a bump in pay any time soon.
I haven’t seen a good job market in my field and location in over 15 years.
If you have programming experience with Python you can certainly do better than $35k/yr.
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Guessing here that he’s more academic, and those guys get hosed for pay.
I don’t seem to have my original spreadsheet, but I remember ballparking tuition inflation at 5% per year. The version I have right now goes back to 2012, and the inflation since then is running at about a compounded 3.4% per year. (That’s just for the one school I use as a benchmark - the University of Chicago.)
Yup, my current projection for my youngest’s first year in college is $118k. It’s wild.
Edit: Of course I have no idea where my kids are going to go to college and, therefore, how much it will actually cost. I intentionally chose UChicago because it’s a really expensive school, so it’s kind of an upper bound. If I overshoot in saving, it just means I’ll have some extra vacation money. And in shocking news, I’m actually not adequately saved for sending all 3 of my kids to UChicago.
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College costs are straight up insane. I would say this can’t continue, but health care is already 1/6 of the entire economy and costs just keep going up up up there, so who knows. Whenever the consumer is divorced from paying, weird shit happens.
It seems legit crazy to go to a private college as an upper middle class kid if you get into an in state public school. $200,000 difference, come on.
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I projected 500K/kid and that was about 8 yr ago.
Like spidercrab, I’d rather oversave. If I’ve got extra that’s not too much of a problem.
I say this all the time, but it’s the best and most personal example of how all 17 year olds are idiots. I had already made like $50k+ playing online poker from ages 15-17, was super smart and mature for my age in terms of decision making around finances and life in general.
Even with all of those caveats, I really for about 3 months thought that taking a full ride to University of Michigan or paying full freight ($160-200k after Financial Aid) to go to Notre Dame was a toss up decision.
None of these kids are adequately equipped to make these life decisions.
ND isn’t enough of an upgrade over Michigan.
Now if we’re talking sticker price at Harvard vs full ride at Michigan, that’s an actual dilemma for which I think there are legit arguments on both sides and depends a lot on the individual situation.
You can do the research to find out what lenders look for. Things like verifiable income, good credit score, length of employment are all good. If you have enough cash to put down a large downpayment, that can help, because the loan-to-value ratio will be lower.
Get free copies of your credit report from all three agencies, and sign up with Credit Karma to learn your credit score. Do things to increase your credit score, and make sure to correct any incorrect negative info on your credit reports. This can take a long time, so be patient. Check your score every couple of weeks to watch it go up.
There is a house hacking technique that I’ve heard about, but have not done myself. By purchasing a house and renting out some of the rooms, you can have your roommates (if single family home) or tenants (multi-family home) pay all or most of your mortgage while you build some equity. That’s not for everyone, but the prospect of income from the home is good for getting a loan. After living in the house for at least a year, you can buy another one and do the same thing, while renting out your former unit/room.
If you have friends at work who own their homes, ask them about how difficult it was to qualify, what banks or credit unions they used, where they live, how the neighborhoods are.
Depends on the loan. Subsidized fed loans don’t accrue interest while still in school. Unsubsidized fed loans do.
Yeah, I am at a university, and the pay (especially at the lower levels) just seems so much more terrible than it used to. And this is while entry level positions are asking for more qualifications.
I was just wondering if any people in any other industries/locations were not seeing ANY of this labor shortage.
Finding a job in my field and location is still an absolute nightmare.
It’s only a free roll if you have the savings to pay it off in case the bill actually comes due. Otherwise, it’s just a huge gamble. So saving a lot for kids’ education is not really (caveat below) at odds with this strategy.
The only potential area of conflict is if you do your saving in college within a 529. I don’t think you can pay off loans with a 529 (and if the loans get forgiven you can’t get the money out without penalty). So, if you save for your kids with the idea of paying off their loans in the event that they aren’t forgiven in some way, then you can’t take advantage of a 529 (and the associated tax benefits). So, doing the surf strategy would necessitate saving in some sort of taxable account (which isn’t really that bad).
I’m pretty sure you can pay off at least some amount of student loans with 529 funds. To the best of my knowledge, it’s a cap of $10,000 per child.
Also, the penalties on withdrawing from 529 plans aren’t terribly severe - it’s a 10% penalty on the earnings portion of the non-qualifying withdrawals.
So it’s possible that I end up in a world where I have too much saved in my 529 accounts. But to me, that’s a risk I’m generally happy to take, because it means that my kids have incurred far less in educational costs than I expected, and I’ve not only got the leftover 529 money but also the money I’m earmarking for college in taxable investment accounts.