Question

401K Question: I'm able to, but extremely hesitant to max out my 401K. I'm set to inherit enough money to live on (knock on wood, way way down the road, family business, etc), and I have one parent telling me to max it because I can, and the other saying not to. I have no idea what to do. I will admit I'm rather skeptical about retirement programs to begin with. I'm currently only contributing about 7500/yr. max would be 19, 500/yr. I CAN do this and still afford to live, I'm just not sure I want to. I have other 'funds' I'd prefer to fund with that money. There IS an employer match, but it's only 2% up to 8% of income and frankly I don't completely get how that works. I also am skeptical about inheritances lol. Nothing is ever set in stone. All it would take is one enormous economy crash to put the family OUT of business, and therefore kill the golden goose along with my income since I work there. Gah, what would you do?! I should also note we are debt free aside from a recent car purchase, and have a 6 month fund and other emergency savings put away.  

Answer 1

Max it because nothing is set in stone! Promises and people telling you one day won’t help you later should it not happen. Prepare for your own future!  

Answer 2

If you’re able to, max it. Nothing is promised in the future.  

Answer 3

Max it

Answer 4

If you have no other debt then max it out, especially if your employer matches any amount. Inheritance is never a guarantee.  

Answer 5

Max it out. Plus you get a match.  

Answer 6

Max it. There are ways to get your money out early if needed

Answer 7

Max it out, you have NO CLUE what’s going to happen in the future with that money

Comments

My mom had a huge inheritance and then her mom had to go into a nursing home and she had to spend it all — so you never know

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@marlyn3 Yes and this is exactly why I don't count on that inheritance. it's a nice thought but not guaranteed

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I would definitely max out your 401K

Answer 8

Max it out

Answer 9

I would max it out and be aggressive if you are young. You can always scale back later if you need to. Also consider diversifying into Roth IRA or Roth 401k. This will help you with tax bills in the future, especially if you inherit money.  

Comments

Thank you, I have a roth IRA, which I am also not currently maxing out

Answer 10

Never rely on other people for your future, build it for yourself & anything else is a bonus. In the words of Baz Luhrmann (and whoever wrote the Sunscreen song). “Maybe you have a trust fund, maybe you have a wealthy spouse; but you never know when either one might run out. ”

Answer 11

Study up on managing your own money, and invest it in something other than the 401k that turns a better return for you. You could start your own business on the side (by being proactive in managing your funds) and then as a self employed individual you can look into a Solo K or "Checkbook 401k", this would even accept a roll over from your current 401k and would allow you to invest in absolutely ANYTHING yourself as long as you keep the funds separate and in your retirement account that you set up. For instance, in a traditional 401k I was making a roughly 4% return. Now that I have educated myself to take control of my finances in all aspects, I'm able to self manage my Solo K and turn roughly a 30-35% return. Find a savvy financial advisor (not traditional companies) and also educate yourself. You'd be surprised what is legitimately available to do after researching  

Comments

Thank you! I've always been pretty good at setting my mind to things and figuring them out, retirement programs are one I just cannot get my head around. I DO love my financial advisor. He swapped my investments and I'm now making double the return I was before. I'm waiting to set up a meeting with him now that I'm ready to get a little more serious about all this. turning 30 kinda hit me like a brick and I'm ready to be a bit more proactive about my/our future.  

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@bergquist awesome! Always, always stay involved in all aspects of your financial health! I see so many people set and forget their retirement plans, and unfortunately they will be woefully underfunded when they are ready to retire since actual inflation is so bad. Great job!  

Answer 12

OK well it's awesome to see a general consensus, thank you all! I've reached out to my financial advisor to set up a meeting with him and get his input on how/where to start. I have the 401K and a Roth IRA, neither of which I'm maxing currently.  

Answer 13

Do NOT touch that 401K!  

Comments

@confectionary as in withdraw? Oh no, I wouldn’t do that.