How much is too much retirement contribution?

[Tim]

unless you are really someone who needs $10m to retire, without turning this into a political or policy thread, I think the OP can avoid this being an issue by simply saving less later in one's career. Supercharge saving now so you can spend your entire paycheck later. The reverse doesn't work so well. If OP has a goal to get retirement accounts to $5-7m, and balance is $3m by the time OP is 50 (which may be possible if OP is late 30s and able to max all of this for 10+ years), then at 50 OP can stop contributing altogether and as long as he/she works another 10 years without dipping into the retirement pot, the balance at age 60 could reasonably be $6m.

Of course if you've been a supersaver it's hard to stop being a super saver. Good idea for the OP to make some life goals and wrap finances around those goals

Exactly. The backup plan is a taxable account or real estate or spend it. Addiction to saving and too much taxes are actually the best problems to have. Many people will gladly help you learn about charity or spending.

[artemis]

unless you are really someone who needs $10m to retire, without turning this into a political or policy thread, I think the OP can avoid this being an issue by simply saving less later in one's career.

Or shift gears. Max out the savings in retirement accounts now, then when the balance gets hefty (say $3-5 million), move over to saving in a taxable brokerage account instead.

[Lordosis]

Or shift gears. Max out the savings in retirement accounts now, then when the balance gets hefty (say $3-5 million), move over to saving in a taxable brokerage account instead.

I agree. You can always save less tax differed later. And who knows what the rules will be in 10-20 years

[Kamban]

another angle to the OP:



i would HIGHLY encourage you to shoehorn every dollar into retirement you can while you are young and married w/ no kids. expenses do go up when this kids come (if this is your path).

my first few years out of residency i lived in my resident apartment, drove a used prius, and saved 20% while aggressively paying down loans. if i could go back and do it again i would moonlight even more and save even more money. it is impossible to be too aggressive early on, you will never be more ready to work and you will never earn more powerful dollars.

The danger is that he has a spouse. Marriage requires investment of time. So when you start to moonlight to save aggressively you start chasing money but lose sight of the fact that there is a wife ( and later child(ren) ) at home who need your time. You get married to work and some people do not know when to stop or let it go or slow down. Before you know the marriage is in shambles and the financial plan in tatters.

My recommendation is to moonlight only when the spouse is on call, especially if hosp based call. Otherwise just chill and start enjoying life. Travel before the kids arrive and do all the other things couples do.

Money will always be available for sensible frugal people. Time will not.

[ObgynMD]

We saved like you are proposing early on and don’t regret it. We also had fun and travelled, and life is just so much cheaper without kids. We even allowed lifestyle creep and were still able to save aggressively.

Now I feel like we have options and that feels great.

I agree with not needing to moonlight etc. Saving 40% with a high income isn’t that big of a deal. Time is worth more than money.

[F0017S0]

https://ofdollarsanddata.com/go-big-then-stop/

Worth the read, OP: first ten years of saving bakes in half (roughly) of your portfolio.

[Zaphod]

https://ofdollarsanddata.com/go-big-then-stop/

Worth the read, OP: first ten years of saving bakes in half (roughly) of your portfolio.

The below graph from the article is exactly why i harp so strongly against the usual advice of crushing your loans and/or paying down a mortgage aggressively early on, you really should be putting everything into investing first.

[JBME]

The below graph from the article is exactly why i harp so strongly against the usual advice of crushing your loans and/or paying down a mortgage aggressively early on, you really should be putting everything into investing first.

mathematically you are 100% correct but personal finance is probably 80% behavior and most people who don't crush debt/pay down mortgage don't take that money instead and invest it...they spend it. I think most of us on the forum are a rare breed who really can commit to saving and investing early even with big loans/mortgage because we know the math works. I'd wage 90% of the gen pop can't do that

[MPMD]

The danger is that he has a spouse. Marriage requires investment of time. So when you start to moonlight to save aggressively you start chasing money but lose sight of the fact that there is a wife ( and later child(ren) ) at home who need your time. You get married to work and some people do not know when to stop or let it go or slow down. Before you know the marriage is in shambles and the financial plan in tatters.

My recommendation is to moonlight only when the spouse is on call, especially if hosp based call. Otherwise just chill and start enjoying life. Travel before the kids arrive and do all the other things couples do.

Money will always be available for sensible frugal people. Time will not.

1. save a ton
2. travel
3. spend time together

for many 2 MD couples they can do all 3 prior to kids

we did!

[afan]

As others have noted, maximizing your retirement contributions early pays off over the long run. Right now, you do not have other obligations that would require those funds.

However, before putting in a large amount above the match, I would make a multi year budget. Factor in when you plan to buy a home and how much it is likely to cost. This depends greatly on the cost of living in your area. It also depends on the local neighborhoods. If you plan to have children, consider that districts with good schools often have high housing prices and high real estate taxes. You may need to save a substantial amount of money to get a decent house.

Just because someone might lend you all or nearly all of the purchase price does not mean it is a good idea. You might get a better rate by going for a conventional loan.

Then factor in how many kids, and their associated expenses. Will either or both of you work part time to be available? If not, will you have to pay for a nanny, daycare, or both? These costs can add up.

Money in the retirement accounts will grow for decades, which is great, but it does not help with these bills.

For now- get as much match as you can and do some planning about what you can afford to put into retirement accounts. The more the better, but you will have other expenses.

[Zaphod]

mathematically you are 100% correct but personal finance is probably 80% behavior and most people who don't crush debt/pay down mortgage don't take that money instead and invest it...they spend it. I think most of us on the forum are a rare breed who really can commit to saving and investing early even with big loans/mortgage because we know the math works. I'd wage 90% of the gen pop can't do that

Often quotable but dont think it applies at all, people in here asking arent randos, they've already self selected. This isnt gen pop, I'd tell them something totally different. This applies only to this group. Once you're this far all that baby stuff should be off the table.

For rando joe on the street, sure. But for someone asking what to do, whats best, etc...its correct, in many many ways. Their human capital will accrue and they wont feel that pressure, stability comes, and all the sudden they've got several hundred grand in the bank.

Like a lot of the advice in this forum it fails to recognize changing scenarios and longer term issues.

I feel for anyone who listened to the oft crazy advice to sell a house already purchased, which is often given. Or taking lowest rates ever seen and putting money hand over fist into a mortgage.

People in here are smart, with stable jobs and high incomes, they can handle it. I still hear quips about it and other "pearls" that display only the ability to repeat back axioms and not doing any actual work to see if theyre true.

Its patronizing to assume people in this specific forum are going to blow their cash if they dont save like ramsey acolytes. My take is the exact opposite and requires no dissonance in thought. If you can pay down debts, you can save in better vehicles. The other one "is if you dont save, you're unable to invest", well really makes no sense at all right? If they cant handle investing or saving, they were never going to pay down debt anyway.

Some people are different and just have to pay down debts, but theres a cost, its not small, and is easy to see. Go back to the start of this blog and just check on how much better off people would be, it would not be a small difference.

In the end, anyone is going to be fine just given the type that gets here, but no reason not to shoot for optimum outcomes, does anyone do this with their medical advice? Id think not.

Ive never seemed to have a problem, I started like everyone, "omg debt so big and scary (it was like, 596K worth) but then I learned a tiny bit more and realized with that and other stuffs no way I could tackle debt, save, etc....and hope to come out ahead in any reasonable time frame, only investing and letting time do some work was possible.

I made more on my retirement accounts last year than I have in student loans, so far, same this year. You do a tiny bit of math and the concerns are frankly ridiculous, compounding and daily small changes will dwarf these tiny amounts in short order.

There are some good reasons to focus on debt, but its for max life freedom and nothing to do with money and regular work. If you want to live your on life, start a clinic or charity, ofc, but regular doctoring, no way.

[G]

Often quotable but dont think it applies at all, people in here asking arent randos, they've already self selected. This isnt gen pop, I'd tell them something totally different. This applies only to this group. Once you're this far all that baby stuff should be off the table.

For rando joe on the street, sure. But for someone asking what to do, whats best, etc...its correct, in many many ways. Their human capital will accrue and they wont feel that pressure, stability comes, and all the sudden they've got several hundred grand in the bank.

Like a lot of the advice in this forum it fails to recognize changing scenarios and longer term issues.

I feel for anyone who listened to the oft crazy advice to sell a house already purchased, which is often given. Or taking lowest rates ever seen and putting money hand over fist into a mortgage.

People in here are smart, with stable jobs and high incomes, they can handle it. I still hear quips about it and other "pearls" that display only the ability to repeat back axioms and not doing any actual work to see if theyre true.

Its patronizing to assume people in this specific forum are going to blow their cash if they dont save like ramsey acolytes. My take is the exact opposite and requires no dissonance in thought. If you can pay down debts, you can save in better vehicles. The other one "is if you dont save, you're unable to invest", well really makes no sense at all right? If they cant handle investing or saving, they were never going to pay down debt anyway.

Some people are different and just have to pay down debts, but theres a cost, its not small, and is easy to see. Go back to the start of this blog and just check on how much better off people would be, it would not be a small difference.

In the end, anyone is going to be fine just given the type that gets here, but no reason not to shoot for optimum outcomes, does anyone do this with their medical advice? Id think not.

Ive never seemed to have a problem, I started like everyone, "omg debt so big and scary (it was like, 596K worth) but then I learned a tiny bit more and realized with that and other stuffs no way I could tackle debt, save, etc....and hope to come out ahead in any reasonable time frame, only investing and letting time do some work was possible.

I made more on my retirement accounts last year than I have in student loans, so far, same this year. You do a tiny bit of math and the concerns are frankly ridiculous, compounding and daily small changes will dwarf these tiny amounts in short order.

There are some good reasons to focus on debt, but its for max life freedom and nothing to do with money and regular work. If you want to live your on life, start a clinic or charity, ofc, but regular doctoring, no way.

Agree with all that, my internet friend.

I had a 70-0 lead at half-time; every time I got the ball, I scored [hard not to make money in equities the last decade]. No sense in running up the score any more [taxable], so I let my starters take the bench and put in the second and third string players so they could get some minutes [goodbye debt].

Financially, it makes no sense that I only work 7 days a month--and am considering 0 days a month--but to your point above, I played hard to get that early lead.

[CaffeineNepenthe]

Thank you so much for your helpful responses!

[F0017S0]

Thank you so much for your helpful responses!

Just like the old Toyota commercials: “we aim to please!”.

[jfoxcpacfp]

Welcome to the forum! Not going to jump in with any more advice b/c you’ve received great pearls of wisdom from some of the best this forum has to offer. Very good pro and con thread.