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scarface_74

This is generally not applicable to most people.

1. Invest enough to get the company match in an S&P 500. It probably isn’t Vanguard that your company uses

2. Pay off all of your debt except your house (and maybe your car)

3. Max out your HSA - if you are married it’s - $8550

4. Max out your 401K - again that’s probably not through Vanguard - $23500

5. Step 5 - then call Vanguard and depending on your income just do a Roth up to $8000 (?).

(Unless you are over 50 then do catch up contributions as 4.5)

If you are under 50, you can do $40,500 tax advantaged and over 50 $48050

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Step 0: Have enough extra money to do all that.

And also Step 4a: Don't need to use the healthcare system.

As much as I hate the American health care system as a senior citizen, there is an out of pocket maximum that you can budget for if you have all of the parts.

From what I understand it’s Medicare Part A+B and either Part C or Medigap.

Of course private insurance especially for older Americans like Part C and Medigap is Byzantine if you actually need it and some doctors don’t accept Medicaid (low income) and a few don’t even accept Medicare.

I don’t know much from either first hand or second hand experience because my mom and dad (83 and 81) are under my mom’s teacher’s retirement insurance and between them (two pensions + social security) medical expenses are more of a nuisance than something that they stress about.

My comment had nothing to do with being a senior citizen.

If you're putting the maximum in your HSA each year, you're participating in a high-deductible healthcare plan.

> If you got your HSA-qualified HDHP through your employer, your average [premium] looked like $90 per month if you were single and $432 for your family.

> Median annual deductible for private industry workers participating in HDHP plans was $2,750.

> Average out-of-pocket maximum was $4,422 for single coverage.

Step 6 is the mega-backdoor Roth. Do after tax contributions to your 401k and have your 401k servicer do an in-plan conversion to Roth 401k.

Also, on step 4, you may need to do a backdoor Roth IRA if you’re over the Roth IRA income limits.

I’ve only had one employer that allowed after tax contributions (which for other people reading this is not the same as Roth 401K).

The issue is that most companies don’t allow it because of compliance reasons and rules regarding highly compensated employees. Of course the one company that did allow it was BigTech.

Not that I’m missing much. I doubt I will be in a higher tax bracket at retirement than I am now and I live in a state tax free state.

To me the primary benefit is when it comes to RMDs. Having a mix of traditional and Roth allows me to draw down the traditional in lower tax years to avoid RMD and have the Roth to fill in those later years or pass on to children. Plus, if you’ve maxed the $23,500ish of the traditional 401k and still have extra to save, it’s more tax advantaged in a Roth vs a taxable brokerage account.

These are obviously champagne problems but if you’re a high earning W2 it’s worth considering.

I think I should be able to do that post retirement by optimizing withdrawals with balancing tax brackets the first few years of retirement. I will have to put catch up contributions in a Roth 401K anyway starting next year (new tax law).

For those of us very late to the investing game, what is the best strategy to try to catch up at least somewhat?

I can speak this as someone who is also behind because life…

https://news.ycombinator.com/item?id=44377380P

There is no secret. I’m 51 and the math says I won’t be able to retire until the earliest when I’m 66.5 and my wife turns 65 and probably won’t retire until I’m 68.5 and my wife turns 67. Since she will be claiming spousal social security (50% of mine) and that’s when hers doesn’t get any larger by waiting.

That’s with my projecting maxing out my 401K + catchup contributions + in a couple + in two years after another obligation falls off maxing out a Roth.

Don’t cry for me. I work remotely, we travel extensively and do the digital nomad thing sporadically. Like next year we are going to Costa Rica for a month and half in the winter and travel domestically in the summer. We live in a unit of a condotel we own and it gets rented out when we aren’t at home to cover the market.

The way I see it, no need to wait until retirement to travel and by the time I do, we will be doing longer stays in Costa Rica, Panama City, etc

I’m not rich, and I make around $200K as a staff consultant working at a third party cloud consulting company.

https://news.ycombinator.com/item?id=44162993

https://news.ycombinator.com/item?id=44159562

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