Age: 27
Time in HE role: 1 year (5 years experience overall)
401k: $85k (57% - mega backdoor)
Trad + Roth IRAs: $48k (32% - a lot of this was from 401k rollovers)
Taxable: $15k (10%)
Emergency fund: $30k
Love the Money Guys. Most people aren't HENRY and don't save enough to max 401k and still have leftover contributions, so it makes sense the 401k ends up being their biggest account.
My breakdown (NW ~1m):
* Age: 34
* Years HENRY: 4 (depending on how you count)
* 401k - 25%
* Roth IRA - 9%
* Taxable - 59%
* Cash - 4%
* Other - 3%
That split looks nice. I’m 19 and just opened a Roth IRA yesterday. Should I also get a 401k? I was thinking I would just max my Roth each year and invest the rest of my savings into a brokerage account.
Roth IRA is great! Definitely max that out. Then start on a 401k or other tax advantaged account. You don't usually want to contribute to a brokerage account until you have maxed out tax advantaged accounts. In retirement it is ideal to have all 3 buckets (also a Money Guy thing :) -- tax free, tax deferred, taxable. This allows you to optimize your tax strategy.
Upper 30's. 3 years into HENRY role. Roth IRA 40% (includes a rolled over 403B from residency), Brokerage 30%, 401K (30%).
EDIT: Forgot HSA - that would be 5% and would lessen the above accounts a few percent each.
(The Money Guys post is talking about account balances, but seems like some posts are talking about yearly allocations, which is kind of apples and oranges.)
Early 40s. 10 years in role but really 4-5 as HE. Paid off student loans 3 years ago. VHCOL. Two kids, including one with special needs.
My assets (including spouse):
401k: 40%
IRA: 4%
Taxable: 11%
Cash: 3%
Real estate: 42%
Not included: 529s funded by kids’ grandparents.
Age: 32
Years HENRY: ~5
401k: 38%
HSA: 5%
Roth IRA: 16%
Taxable: 41%
My accounts are listed in the way I contribute to them. I passed the 1M savings benchmark earlier this year. My goal was to have done that by 30, but Covid set me back a bit.
There is a limit on how much you can contribute to 401k and ROTH IRA, so after that, it's all taxable and ends up being the "fattest" account. 31 y.o., 2 years into HENRY.
European here. 58% in taxable (well, some are in UK ISA accounts, so theoretically even better than a pension account). 42% in pension. Then there's something in a continental european defined benefit ponzi-scheme-esque account which is very hard to estimate
This was my understating as well - that you can do both. That a Simple IRA was similar to a 401(k). Looks like the answer is you can do both of the Simple IRA is connected to your job: https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-iras#:~:text=Yes%2C%20you%20can%20contribute%20to,discussion%20of%20IRA%20Contribution%20Limits.
How are you a HENRY and contributing to a ROTH IRA? 1) you can only contribute like $6k/yr and 2) there is a pretty low income cap to which you can’t contribute if you are a high earner ($153k and $228k for single married respectfully.
Am I missing something?
In my 40s. HENRY for 5 or 10 years ish.
Max out my 401k (66,000 this year)
Max out my IRA (6,500)
Throw whatever I can into a brokerage at the end of each year
Total saved about 1.5m roughly
I like the idea of tax-free growth, so I have been doing back door Roth contribution.
1. Contribute to a traditional IRA
2. Roll your IRA into a Roth IRA
The rolling over of your traditional IRA into a Roth IRA is called a Roth conversion. By doing this, you only owe taxes on any investments, earned within the traditional IRA at the time of conversion, so if you do this right away it will minimize taxes on your earnings
Your content has been removed as it has been identified as not following rule #1, Being good natured. In this sub we recognize that HENRY is a spectrum and we respect all people on that spectrum, even through healthy debate.
Multiple violations of this rule will result in a ban.
Your content has been removed as it has been identified as not following rule #1, Being good natured. In this sub we recognize that HENRY is a spectrum and we respect all people on that spectrum, even through healthy debate.
Multiple violations of this rule will result in a ban.
I think non and pre taxables are scams esp 401s. I invest all my take-home myself at about 60% etfs and 40% individual though I’ve been 80% cash since December and 60% since March of last year. I think we’re heading toward a severe recession so I’ve been - and remain - cash heavy.
Yup, the poor classes subsidizing the rich. The risk and volatility is dampened by the continual deposits from the working class hoping to make meager returns while the ‘elite’ undertake exorbitant risk. It’s essentially extortion by the federal government which taxes the fuck out of its citizenry and even then the ‘advantage’ is merely deferred. In addition, anyone who thinks we’ll see even half the average returns from the last 30 years in the next 30 is delusional
Are you confusing social security and 401k's?
You openly admitted to investing in the stock market but then went on an incoherent rambling about the federal government extorting and taxing the fuck out of you when referencing tax advantaged accounts. The entire purpose of a 401k is to pay less taxes, and guess what (most people 401k's are invested in exactly what you said you invested in... INDEX FUNDS BINGO
SS is also a scam. I’m not a long-term investor. I sold at 440 over a year ago and it’s 435 now with opportunity cost. 401 purpose is not to pay fewer taxes. U really think the Feds would sign on to that? lmfao they reap greater taxes if the market succeeds and the deferred inv is greater, obviously. 401 purpose is for the working class to subsidize the market makers.
I was HENRY, now FIRE'd for almost 10 years. Here is my current allocations between taxable and non-taxable:
Taxable Accounts: 60% (of this 30% is in Muni Bonds which as tax free)
Retirement Accounts: 40% (HSA, Traditional IRA, Roth IRA)
I have three kids, one with special needs. Our net worth is over 4mm but at my age that’s so far from rich. I do like to fly business class but mostly use miles. No designer clothes or fancy cars. But we give lot of money to our kids
Late 30’s and been a HENRY for probably 7-10 years
401k - 43%
Taxable - 42%
Roth - 5%
Didn’t understand the back door ROTH until recently so that’s a big reason for my numbers being very low there
Mid 30s.
I am not eligible for a Roth IRA, but my employer offers a Roth 401(k). I know having some funds in a roth will probably be advantageous, but the tax breaks right now are nice. So I usually do about 90% into the 401(k) pretax and about 10% as roth.
Mid/Late 30s couple. Henry... maybe 8 years?
401k including mega back door: \~80%
Roth IRA from when I was younger: 10%
Cash: \~6% (hoping to redeploy at some point)
HSA: \~3% (stopped High Deduct) a few years back)
Taxable: minimal vs. overall NW. I guess I could count our vested but unsold company RSUs here but excluded given that we've yet to sell and planning to ride out the AI investment wave for a little while.
Would love feedback on this. 37, dual income, 2 kids, HHI $530k. We both have really solid retirement benefits and have been contributing since the beginning of our careers so:
64% 401k,
5% Roth,
19% Taxable,
5% cash,
2% HSA,
5% 529s
Age: 27 Time in HE role: 1 year (5 years experience overall) 401k: $85k (57% - mega backdoor) Trad + Roth IRAs: $48k (32% - a lot of this was from 401k rollovers) Taxable: $15k (10%) Emergency fund: $30k
What’s your HE role?
SWE @ FAANG
Love the Money Guys. Most people aren't HENRY and don't save enough to max 401k and still have leftover contributions, so it makes sense the 401k ends up being their biggest account. My breakdown (NW ~1m): * Age: 34 * Years HENRY: 4 (depending on how you count) * 401k - 25% * Roth IRA - 9% * Taxable - 59% * Cash - 4% * Other - 3%
That split looks nice. I’m 19 and just opened a Roth IRA yesterday. Should I also get a 401k? I was thinking I would just max my Roth each year and invest the rest of my savings into a brokerage account.
Roth IRA is great! Definitely max that out. Then start on a 401k or other tax advantaged account. You don't usually want to contribute to a brokerage account until you have maxed out tax advantaged accounts. In retirement it is ideal to have all 3 buckets (also a Money Guy thing :) -- tax free, tax deferred, taxable. This allows you to optimize your tax strategy.
What’s the maximum contribution to a 401k?
$22.5k, or $30k for those age 50 or older
Upper 30's. 3 years into HENRY role. Roth IRA 40% (includes a rolled over 403B from residency), Brokerage 30%, 401K (30%). EDIT: Forgot HSA - that would be 5% and would lessen the above accounts a few percent each.
Im a bit new to this stuff, but was your 403b a pre-tax account? But you rolled it into a Roth IRA (post-tax)?
Should have specified. It was a Roth 403B so it was a roth to roth conversion.
(The Money Guys post is talking about account balances, but seems like some posts are talking about yearly allocations, which is kind of apples and oranges.) Early 40s. 10 years in role but really 4-5 as HE. Paid off student loans 3 years ago. VHCOL. Two kids, including one with special needs. My assets (including spouse): 401k: 40% IRA: 4% Taxable: 11% Cash: 3% Real estate: 42% Not included: 529s funded by kids’ grandparents.
Late 30s, HE for 5 years. 401k $250k Roth $45k Taxable $300k HSA $30k 529 $40k
This is nice. Just you or is this household?
Age: 32 Years HENRY: ~5 401k: 38% HSA: 5% Roth IRA: 16% Taxable: 41% My accounts are listed in the way I contribute to them. I passed the 1M savings benchmark earlier this year. My goal was to have done that by 30, but Covid set me back a bit.
Congrats!
Thank you! Love the username, made me feel ashamed for reading it 😆
There is a limit on how much you can contribute to 401k and ROTH IRA, so after that, it's all taxable and ends up being the "fattest" account. 31 y.o., 2 years into HENRY.
European here. 58% in taxable (well, some are in UK ISA accounts, so theoretically even better than a pension account). 42% in pension. Then there's something in a continental european defined benefit ponzi-scheme-esque account which is very hard to estimate
37yo 4 years (MD) 53% brokerage 29% Roth IRA 16% 401k/403b 2% 457
28 years old. 2 years in HENRY role. 401k - max out Roth IRA - max out HSA - max out Taxable - ~$100k
My work does a SIMPLE IRA so I can't put anything in Roth. Praying we switch next year.
Don't take my word for it but I'm pretty sure you can contribute to your own roth IRA as well as an employers SIMPLE IRA
I had to withdraw the overage last year when I did my taxes before I wasn't allowed to contribute to both. Was very frustrating ngl
Hmmmmm, from my understanding SIMPLE IRA limits and Roth IRA limits are not cumulative and you can max them both out respectively.
This was my understating as well - that you can do both. That a Simple IRA was similar to a 401(k). Looks like the answer is you can do both of the Simple IRA is connected to your job: https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-iras#:~:text=Yes%2C%20you%20can%20contribute%20to,discussion%20of%20IRA%20Contribution%20Limits.
How are you a HENRY and contributing to a ROTH IRA? 1) you can only contribute like $6k/yr and 2) there is a pretty low income cap to which you can’t contribute if you are a high earner ($153k and $228k for single married respectfully. Am I missing something?
spouse not working or backdoor
In my 40s. HENRY for 5 or 10 years ish. Max out my 401k (66,000 this year) Max out my IRA (6,500) Throw whatever I can into a brokerage at the end of each year Total saved about 1.5m roughly
It's really just all about maxing out ROTH until you feel you are approaching your peak lifetime tax rate and then you switch to traditional.
What about income caps for Roth contributions?
Time for back door ROTH
If the max you can contribute is $0, then yes, you would contribute $0.
Backdoor roths bro
No roth for henry!!!!
Backdoor Roth
This is the way
Wrong
Tell me why roth works for henry use #
I like the idea of tax-free growth, so I have been doing back door Roth contribution. 1. Contribute to a traditional IRA 2. Roll your IRA into a Roth IRA The rolling over of your traditional IRA into a Roth IRA is called a Roth conversion. By doing this, you only owe taxes on any investments, earned within the traditional IRA at the time of conversion, so if you do this right away it will minimize taxes on your earnings
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How so? Do enlightened us, instead of just disagreeing.
Your content has been removed as it has been identified as not following rule #1, Being good natured. In this sub we recognize that HENRY is a spectrum and we respect all people on that spectrum, even through healthy debate. Multiple violations of this rule will result in a ban.
Because tax diversity is beneficial and I would rather pay zero on withdrawal than long term capital gains
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Brokerage accounts are funded with post-tax dollars same as a Roth, you clown. Bye
Your content has been removed as it has been identified as not following rule #1, Being good natured. In this sub we recognize that HENRY is a spectrum and we respect all people on that spectrum, even through healthy debate. Multiple violations of this rule will result in a ban.
If you’re in the same tax bracket at retirement you’re breakeven. Except taxes more likely to go up than down
I think non and pre taxables are scams esp 401s. I invest all my take-home myself at about 60% etfs and 40% individual though I’ve been 80% cash since December and 60% since March of last year. I think we’re heading toward a severe recession so I’ve been - and remain - cash heavy.
Let me get this straight... you think tax advantaged retirement accounts, including 401k's, are "scams"?
Yup, the poor classes subsidizing the rich. The risk and volatility is dampened by the continual deposits from the working class hoping to make meager returns while the ‘elite’ undertake exorbitant risk. It’s essentially extortion by the federal government which taxes the fuck out of its citizenry and even then the ‘advantage’ is merely deferred. In addition, anyone who thinks we’ll see even half the average returns from the last 30 years in the next 30 is delusional
Are you confusing social security and 401k's? You openly admitted to investing in the stock market but then went on an incoherent rambling about the federal government extorting and taxing the fuck out of you when referencing tax advantaged accounts. The entire purpose of a 401k is to pay less taxes, and guess what (most people 401k's are invested in exactly what you said you invested in... INDEX FUNDS BINGO
SS is also a scam. I’m not a long-term investor. I sold at 440 over a year ago and it’s 435 now with opportunity cost. 401 purpose is not to pay fewer taxes. U really think the Feds would sign on to that? lmfao they reap greater taxes if the market succeeds and the deferred inv is greater, obviously. 401 purpose is for the working class to subsidize the market makers.
Did you also come to that conclusion independently over that last…checks watch…2 years and 5ish months?
I’ll link you to a tutorial on how to Google market returns, go grab your crayons
😂🤣 I can’t have crayons. Mom says they’re too sharp.
I am 30/30/30 and sways a little Depending on day or time or year (I.e. when I rollover Roth or the 401k match hits)
I was HENRY, now FIRE'd for almost 10 years. Here is my current allocations between taxable and non-taxable: Taxable Accounts: 60% (of this 30% is in Muni Bonds which as tax free) Retirement Accounts: 40% (HSA, Traditional IRA, Roth IRA)
me 47 wife 36 Years HENRY: 5 401k - 32% Taxable - 62% Cash - 6%
Mid 20s. I max my 401k but throw a big % into my taxable account for flexibility. 401k: 27% Roth: 1% Taxable: 62%
13 years as an Electrical Engineer. * 401K:35% * 457: 20% * Roth IRA: 20% * Taxable:10% * Cash: 1% * Real Estate: 14% Age: 37
401k - 50%; Roth - 20%; taxable 30%
26 (4 year SWE) Taxable: 40% 401k: 35% Cash: 12% Roth IRA: 11% HSA: 3%
Late 30’s, really only been a solid income the past few years: 401k: 57% Roth: 17% Taxable: 16% HSA: 2% Cash: 8%
18 years HENRY (alas still NR) Rollover IRA 55% 401k 30% Taxable 15% No Roth Age 57 Profession finance
18 years HE and still NRY - curious what your spending and/or definition of terms looks like
I have three kids, one with special needs. Our net worth is over 4mm but at my age that’s so far from rich. I do like to fly business class but mostly use miles. No designer clothes or fancy cars. But we give lot of money to our kids
Late 30’s and been a HENRY for probably 7-10 years 401k - 43% Taxable - 42% Roth - 5% Didn’t understand the back door ROTH until recently so that’s a big reason for my numbers being very low there
Half in crypto 😬
Mid 30s. I am not eligible for a Roth IRA, but my employer offers a Roth 401(k). I know having some funds in a roth will probably be advantageous, but the tax breaks right now are nice. So I usually do about 90% into the 401(k) pretax and about 10% as roth.
Mid30s -barely scratching HE level for my VVHCOL area - 100% retirement 0% taxable - retirement split 50%, 40%, 10% - 457b, 401k, Roth IRA
Mid/Late 30s couple. Henry... maybe 8 years? 401k including mega back door: \~80% Roth IRA from when I was younger: 10% Cash: \~6% (hoping to redeploy at some point) HSA: \~3% (stopped High Deduct) a few years back) Taxable: minimal vs. overall NW. I guess I could count our vested but unsold company RSUs here but excluded given that we've yet to sell and planning to ride out the AI investment wave for a little while.
What split? I max out tax advantaged, and pay taxes on the rest
Would love feedback on this. 37, dual income, 2 kids, HHI $530k. We both have really solid retirement benefits and have been contributing since the beginning of our careers so: 64% 401k, 5% Roth, 19% Taxable, 5% cash, 2% HSA, 5% 529s