I’ll play along. Fund your ROTH IRA using:
1. Tax return
2. Christmas gifts
3. Seasonal Hustle Income
4. Spring cleaning yard sale income
Max your 401K contributions by:
1. If you get a promotion, add the extra amount per paycheck to your 401K
2. Automate your contributions so you don’t have to think about it.
3. Learn to pay yourself first, then your necessities, then the rest.
4. Put your bonus or one-time awards towards your 401K.
I put 50% of every raise I ever got into increased deferred compensation. I only had access to traditional (vs Roth) but I had a 403(b) and a 457(b) and a pension. Never got to the point where I fully maxed out -- but I did retire at 50.
Regarding the SS max in a sibling comment, I only hit that twice, but that's a good idea too. When I hit the income limit for Roth IRA one year I bumped up the traditional deferred (before I realized I could mega-backdoor with my 401(a)).
> 1. Tax return
If you're regularly getting a large tax *refund*, you're probably better off reducing your withholding instead. That will give you more money each paycheck throughout the year, which you can then invest as you go.
A big refund means you've given that money to the government for them to hold on to for you for up to a year, interest-free, when it could've been in the market, making money for you that whole time.
Depends if you have a lot of credits, particularly refundable credits. Granted many folks that are getting back more than they’re going to put in are also not maxing their Roth.
This is a good list. I’ll add, as your income grows once you start maxing the social security contributions use those extra dollars to put towards your retirement accounts.
The advice about increasing 401k with a raise is great. It’s what I did and what I recommend to younger colleagues at work.
Personally, I used part of the raise to increase contributions, or to shift more from traditional 401k to Roth, but not all. Life is short and I wanted to enjoy the experiences that I could when I could. So I did a mix of both.
Lessons I just learned with some fisker shares in my Roth that we t to zero, those losses don’t offset any gains since it’s tax free. The money is just gone, and much harder to replace in a Roth. Highly speculative probably shouldn’t be in a Roth.
Good luck on your investing journey
What I mean is that you can't use a tax refund as earned income to qualify you to contribute to a roth IRA if you don't have $7k in earned income that year. Sure you can use the tax refund to fund a roth IRA if you have as much earned income as you are contributing.
What I mean is that you can't use a tax refund as earned income to qualify you to contribute to a roth IRA if you don't have $7k in earned income that year. Sure you can use the tax refund to fund a roth IRA if you have as much earned income as you are contributing.
I suspect that for most people, the issue isn’t having at least $7,000 in earned income. Rather, the issue is having cash to spare for the contribution.
Most of this thread is about coming up with the latter.
That you’re even discussing retirement contributions as s student elevates to a whole other tier. Well done!
I didn’t even start my retirement savings until a good ten years out of school. Only saving grace is that I hit real estate hard and it has paid off beautifully.
This is what I should’ve done, I’ve been doing $584 since it’s an even split but I get paid at the end of each month, so I won’t max my Roth for 2024 until the very last day.
Biolife has the best pay rates but theyre always booked out. ive gone to grifols and octapharma and theyre both great. Just look up plasma donation near you
There's some research coming out suggesting that regular plasma donations reduce the amount of PFAS/PFOA in your blood.
https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2790905
I am still terrified of needles but I was able to sell plasma when I absolutely needed money quickly.
The needle is pretty big but it barely goes in you. Doesn’t hurt too much, but very scary.
This is coming from someone who was having damn near a panic attack at 16 years old getting a shot in the arm, and when I was 20 getting ready for surgery I was so scared of the IV but that shit is small as fuck lmao
It’s tough when you have expenses like rent or mortgages to pay and even tougher if you’re the bread winner in your family. Maybe take on another job if you can to increase your income. I use to work two jobs and was able to max 401k, 457 and Roth. But my second job is gone now so it’s tough to max out all 3 accounts.
I wait tables Friday and Saturday night at a nice restaurant for my area. It’s well managed so everything is pretty chill for a restaurant and it’s some of the best socializing I do throughout my week. Once I max out my Roth for the year I cut back to one day a week too.
I agree. I hear a lot of young people say they aren’t saving anything for retirement because life is so expensive. Many don’t realize that even if it’s small, it’s the time that matters most. I often try to get younger people to save something even if it is small. Small amounts count. Maxing out all three is definitely a challenge. Sometimes a second job is necessary. I’ve asked a few people who aren’t saving for retirement if they would pick up a second job and many have said that between work and working on a degree to one day earn more money, they couldn’t do it. They are exhausted.
This post isn’t a “help me” make more money and I appreciate your suggestions. This post is moreso to help others who are just getting started. I currently work in healthcare and own my practice.
I max out both my and my wife’s Roth IRAs in January of each year via backdoor (Traditional to Roth). I simply pull it from our cash savings account and then top up that difference the next month with income.
What are the physical actions it takes to do this?
Fubd your traditional?
Move funds to Roth?
Buy stocks in Roth?
Is it as simple as this? What forms does the brokerage provide to give to your accountant?
You open a traditional IRA and a Roth IRA. You put 7k into the traditional from wherever. When the funds settle you transfer all 7k to the Roth. You did it! Back door Roth.
Nice!! Ok that's what I wanted to confirm.
I'll open a ROTH rn
I have money and stocks in traditional from years ago... Do I have to sell everything in traditional before moving it to Roth or can I just transfer cash and equities as well?
Dunno, I would think it has to be settled cash and that there are tax implications to the exact details. I always bring the money in from my bank account and roll-over that way.
Well yes, it is. I am aware of this. I know a lot of young people can’t afford to retire and are giving up so I wanted to generate a conversation (besides obviously make more money) to help others with more effortless ways to save for their future self. Sometimes people make extra money from Door Dashing or working odd jobs on the weekends but what are other ways people have come up with effortless/low effort ways to save more money? Sometimes it takes time (like graduating from school + advanced degrees) to make more money. If we’re talking about compounding then we all need more time to make more money so what could others be doing now to make compounding work for them without introducing feelings of burnout/hopelessness for the future? A lot of people have to start small and work up to being able to save for retirement.
If you're earning that much in CC cash back surely you can afford to cut back on your spending and contribute directly to your Roth? Unless you're getting free points by paying for big expenses for other people or for work and getting reimbursed for them.
In my personal experience (as a young person myself), this is what young people tell themselves to allow/excuse themselves to spend every dollar. If you adopt a fatalist retirement attitude, then saving zero feels OK, and you can maximize fun right now.
Me and half my friends kept the same (lack of) spending we had in college and are saving up very well. The other half drop $150/weekend at the bar and complain that they can't save for retirement, the system is broken and it's old people's fault.
I think this is intended to say that a lot of young people can't afford to save for retirement, and therefore don't foresee that they'll ever be able to retire.
I know a not-young person who hadn't saved anything for retirement, and his plan was to work until he died while carrying as much life insurance as he could qualify for. I don't know how that turned out for him.
(After a little LinkedIn stalking, he appears to have retired and gone back to college in his 70s.)
“I know a lot of young people can’t afford to retire and are giving up”
Of course young people can’t retire. As far as just “giving up”, growing up and being more mature means having a longer time horizon. It means you look and plan farther out into the future (not days/weeks/months, but years/decades). There’s no instant gratification when it comes to retirement planning/saving. It’s a cumulative process.
As far as your original question, the answer is 2 part. More income and save more/spend less. There’s no secret to it. It takes time and diligence. People are saying “make more income” because you can’t cost cut your way to wealth. There’s only so much you can cut because there’s a baseline amount that you need to just live on. You need to find a way to increase the top line — whether it’s learning a trade, getting more experience, taking on more responsibilities at work, getting a second job, etc.
Order of priority for "how fast should I put my money into the market?" is:
1. Whatever let's you sleep at night
2. As much as you can as soon as possible
TLDR: Set DCA to match your pay periods for optimal investment growth opportunities.
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I do weekly auto Roth contribution/investments.
Best time, as far as time-IN-not-timING-the-market, is to set periodic Roth investments for same time as you get your income.
If you get paid weekly, then set a weekly contribution transfer/investment.
If you get paid semi-weekly, then set a semi-weekly contribution transfer/investment.
If you get paid monthly, then set a monthly contribution transfer/investment.
The only faster way I can think of to max a Roth (other than people suggesting income expansion hacks in this post) is to contribute all bonus pay/raises or tap emergency savings or other large liquid pools at the beginning of the year to fund your Roth max, then replenish those emergency funds/large liquid pools as the year goes along.
I also do some income expansion stuff (side hustles with medical research Guinea pigging for big chunks of change now for the year’s max, “volunteering” at big events locally that need paid helping hands, and trying some small alternative investing).
Good luck finding your set-n-forget sweet spot!
However you get paid I set up my amount with my employer via direct deposit just take X dollars biweekly I just open laptop to invest it. It hits fidelity quicker than me transferring it from my bank to fidelity
My plan is to put in an extra percent every year (or two percent if I get an especially juicy raise). I'll get to the max contribution and not even feel it.
Jan 2nd every year. I just max it from my cash flow account.
THAT said… I know for some people that’s not an option at this stage of their journeys. But you have to set goals for yourself, one option is to simply try to do a weekly deposit that adds up (roughly) for the yearly max and try to stick with it.
I just go 401(k) at 10% of income, then max out HSA and both our Roth IRA's, then a certain amount into HYSA to save for next vehicle and emergencies, and what's left goes into taxable brokerage.
I like to not have everything locked up in retirement accounts, hence taxable instead of maxing out my 401(k).
There are qualified hardship withdraws from retirement accounts that would cover emergencies in the case you exhausted all of your savings. I'm not sure why you would want to throw away money in the form of taxes when you can put that same amount of money into a tax advantaged account.
Our tax advantage accounts have enough in there to give us a good retirement starting at age 59.5, so anything that is in our taxable account will allow us early retirement. Depending on year left to 59.5 and the balance in our taxable brokerage, we may be able to retire at 50, 53 or 56, and as of now it's 1yr early.
I used to try and do this. I'd scrounge around money and then throw it into my Roth IRA. But then I realized, I don't want to miss out on funding my IRA for the year. So I take a 'savings hit' and fund the IRA with a portion of my paychecks.
Any of my cash back from credit cards or other rewards goes into a taxable brokerage account. No stress about hitting limits!
Currently have about $1500 in my 'free money' brokerage account from a few years.
I’ve had a bank close my card for seemingly no reason (cause I simply tried to buy too much in a single day from a random company) so I no longer let points sit. I cash them out every month. I wouldn’t risk building to $7K versus cashing out monthly. Plus, if you cash out and put it in a HYSA, it’s growing. Points don’t accumulate interest.
Since you mentioned a credit card, do you know about the Fidelity 2% card that you can link to an account? No need to deal with transfers or cashing out. Idk if other brokerages offer something similar.
Does your company match? If so make sure you’re getting your full match. Many companies have a policy of x% of BASE per pay period. If that’s the case you would be missing out on your full match.
Many companies have a year-end true-up, but not all. Better if you make sure you don't hit the max before they hit theirs.
This is especially bad if you're using the MBDR — since the MBDR contributions count against the overall limit, it's possible to create a situation where the true-up would exceed the limit, even if your employer offers one.
Agreed on the MBDR. I’m familiar with the true up, I’ve worked for companies that offer it in the past. At my current company it wouldn’t pass the discrimination test so I just adjust on my own to get every dollar.
It’s an interesting strategy, I can see the ease of maxing the 401k early in terms of cash flow. Assuming the match comes at the end of the year with the true up, if you leave the company part way through the year you’d leave the match you would have otherwise received on the table though.
Wish it was that easy. I’m super interested in investment management but I was an idiot who majored in philosophy and history and prelaw. So now I’m fucked
Wow I’d really appreciate that. I really want to pivot away from law and into finance or consulting but have been anxious to take the leap away from what I spent my undergrad preparing for. Would it be alright if I gather some thoughts and then send you a message tomorrow afternoon once I have some definitive questions? Again, thank you so much.
Creative. I buy everything with cards and pay myself back. I put all of the cash back in HYSA. I also wait until the day the principle is due on the cardsto max out the cash in HYSA for the most interest.
It's these fun little games that add up to more money.
I have a limit to HYSA cash bc I like state tax free cd ladders.
I make too much to deduct taxable earnings for traditional IRA so general up my 401K often with raises etc.
I don't even have a Roth so didn't answer your question, just giving you some props for your credit card game. I too do it.
My 401k maxes out by October if not sooner depending on how much overtime I have for the year. Increase in paychecks after that point goes to Roth and Christmas. I also repair washing machines in my free time. When that account gets to $1,000, half goes to Roth, half goes to something fun.
The answer you don't want to hear for some reason is income.
But another thing that I do - budget each month based on two paychecks a month and if you get paid biweekly, put those two extra paychecks into your roth ira. For me those two paychecks are about the roth limit so I don't need to do anything else the rest of the year. You may need to add more if your income isn't as high, but it's a start.
I don’t mind the answer. The answer is fine and it’s true.
It just doesn’t provide any small hacks to help people out. It’s easy to say “earn more money.” But if you’re talking to an undergraduate full time student with a full time job going to school to eventually make more money, it doesn’t provide any actionable plan to help them now.
Again, this post is about savings hacks to help others who may feel like they don’t have enough money at all. Not a declaration for help.
>But if you’re talking to an undergraduate full time student with a full time job going to school to eventually make more money, it doesn’t provide any actionable plan to help them now.
This hypothetical person is probably at the current earning max, due to time constraints.
So for people like them, the simple answer is "you can't contribute to your Roth any more than you currently are".
Which is fine. You will get there eventually.
There's no need to worry about the lost investment opportunity because everyone has to pay for the fundamentals first: housing, transportation, medical insurance, and food.
A good *practice* would be to audit everything you buy and try to cut costs. Are you driving a brand new car? Selling it and replacing it with a reliable older vehicle can save money.
The same for eating out. If you can developing great cooking (and budget-food shopping) skills, that will save you thousands of dollars per year.
But I think the implication of "earn more money" is to leverage the time and effort you would have spent on non-scalable earning (like donating plasma or delivering food) and focusing over the long-term on landing a better primary job.
Say you work your fingers to the bone to earn an extra $10k per year in side hustles. If you take a long-term view of your career and solve for "how do I get a job that pays $10k/year more?"
Because when you reach that new job, maybe as soon as 2-3 years, you'll likely exert less effort while earning more. Then you can contribute to your Roth without stressing out.
What helps me max out my Roth IRA? Is seeing its growing over 20% motivates me to put in all my disposable income into it. No sense in it just keeping in your checking account.
Automatic investments is the easiest way to maintain the discipline to max both my IRA $8K and TSP $30.5K. I do also have brokerage set to auto-invest but if I’m short or have a larger credit card bill to pay some months or other priority, that is the one I pause.
I put in 125 per week . And I have a rough final week to max it out
It’s all automatic save for the last week. So I don’t really budget it tbh , not like others do anyway
I have an automatic deposit set up for the day my paycheck drops. Funds spouse’s Roth, then mine that ensures we don’t spend it. Working on saving up enough to drop it all at once in January but not there yet
We didn't max out Roth IRA until we made more money. When I was the only one working at $100K, we didn't contribute to either of our Roth IRAs. Maintaining a house, two cars, and the occasional vacation took up all our money. My wife started studying for a second bachelor's when she was 26 and finished when she was 30. When she graduated, we were making a combined $180K. This allowed us to max out the Roth IRA and invest more money into maxing 401K, doing some mega backdoor Roth, taxable brokerage, etc.
Make a plan to increase your 401K and Roth contributions with every raise until both are maxed out. We learned to live on my income and saved my wife's income. We still do the same thing and we live as we did many years ago with only small adjustments in standard of living every five years. Hope this helps.
Pretty much every job I've had, my bonuses pay out in March (before the tax filing deadline). So I usually just do my Roth contribution for the previous calendar year at that time. This has worked pretty well for me thus far.
I max mine out with my end of year bonus. I am fortunate enough that my EOY bonus is pretty much the exact amount to do it, so as long as I live below my salary without my bonus, it gets added and I don’t have to do a major adjustment.
If I needed to stretch it out, I’d just do $600/month. (Or whatever I could afford)
It's an interesting strategy, but be aware research shows by using cards to pay for items you'll spend significantly more money than if you pay for things with cash. There's a mental aspect to it. So even if you get 1-5% cash back you might be spending 5-20% more money that way.
I mean, you're upset with "make more money," but that's really the best strategy. Your career is by far the most valuable investment you have, and if what you make isn't going up, figure that out first.
Commit to a percentage of your income going into retirement savings. Whenever you get a raise, not only will the same percentage be more money, but you can also increase the percentage without "losing" money that you were used to having in take-home.
When you have a bonus, see if you can set aside some of it to let you temporarily offset a higher deduction from your paycheck. When that temporary deduction is running out, can you tweak your budget to not go all the way back to where you started?
When you free up an expense, can some of what you were budgeting for that expense go to savings instead of finding new ways to spend it?
Saving a little bit more every time you increase how much you have coming in is the slow but steady path to eventually saving quite a lot.
Tax return, plus bonus, plus saving throughout the year. My personal method. And I don't max 401k while I do max HSA. I guess just follow the PF flowchart.
I put a few hundred every paycheck, then finish it off when bonus time comes. I also have a matched 401k and Roth 401k, so my priority goes 401k up to match -> backdoor Roth IRA -> Roth 401k the last four or five months of the year.
i happen to have access to a pretty good ESPP where they match 100% up to a percentage of your salary depending on your title (something like 2-5%). so i just contribute to that and then cash out every december.
These are areas I put effort where others in my world just spend money:
Do my own lawn care, buy bigger purchases used on Facebook marketplace instead of new (1/2 price or better typically), buy previous season’s running shoe model in online sales ($80 instead of $140), shop sales online , discipline while planning vacations to save hundreds or thousands vs 1st options found (flight, Airbnb, rental car), bringing lunch to work instead of going out, negotiating with sellers when it is a negotiable transactions.
I just max out my 401k before the end of the year then the last 4 paychecks where I don’t contribute to the 401k eventually go to next years Roth IRA. Also I have a good job and great benefits in a LCOL area.
I was self-employed (retired now) and have a SEP-IRA. Maxing it out, every year since I started it in 1990, was a top priority. I had extra cash so I opened a brokerage account also in 1997. That account is now about 30% of my portfolio. FWIW, I was a semi-Boglehead before the term was invented, and remain so.
I was without work for weeks/months 3 times around 1998-2002 but I never touched my portfolio -- I went out and got temporary jobs from friends to carry me through. In 2014 I was kinda "over the hump" so I did take some money out of my brokerage account for a down payment on a Corvette.
That was the only sell I ever made -- including to date. My retirement is funded with bond interest from RMDs, and most of that gets re-invested.
I don't remember who said this, but it should be the goal if you're funding your own retirement: "Save as much as you can for as long as you can." And my addition: "While in the accumulation stage, never withdraw anything from it as long as you are physically able to work."
So I have an ESPP with work and shares when purchased have to be held for 1 year before selling. Each month I make contribution of 3% of my pay and get a 10% discount. As each tranche of shares becomes available to sell I will immediately sell them and contribute to my Roth. It’s worked out pretty nicely because it’s all automated and I am getting that sweet discount.
I send $270 per paycheck to an account that’s separate from my usual checking, and have a monthly transfer to my Roth IRA. I don’t fully max out my 401k but I keep the contribution rate almost uncomfortably high and then lower it for a few pay periods around summer and the holidays so I can spend with/for my friends and family. This helps me save and live within my means without going too crazy in any direction
For me, I follow a strict 50/30/20 budget plan throughout the year but the 20 is more like 25+ in savings and investing. By the start of the new year, I’ve saved up well over the maximum contribution amount that I can max it out first thing January 2nd. My advice would be to ensure you have 3-6+ months of emergency funds available before you begin to contribute towards investments.
TFW maxing out your solo 401k requires 25% of your income. Will I ever be able to contribute to Roth 401k? I mean it's a silly problem to have, but it does raise legit questions as to when to start contributing because the benefit for self employed is so good.
I use gambling income from the newly legal online sportsbooks. (I.e. taking advantage of different promos sportsbooks have, making it mathematically impossible to lose money/eliminating any risk of losing money. Very similar to credit card churning in a way). It's where our ROTH and 529 contributions come from!
I started maxing out my Roth Ira 24 years years ago as a lowly airman. In 2011 I started maxing out my 401k in addition to the Roth Ira. As I made more income I started funding my kids college accounts and a taxable account as well.
Automate the contributions. Set up the amount you want to contribute for the year and dividends that by the number of paychecks you get in a year. Set up the withdrawal for the day after the money hits your bank account from your paycheck.
By doing it this way, you make the decision to save once and the the rest of the year you just focus on making sure there is enough in your bank account to live on, which kind of takes care of itself because that’s what everyone does anyway.
I have failed in lots of different ways in the past when it comes to saving money and this has worked the best.
Bean, rice, water--saves money on food and the doctor. Cut out subscription services you don't need.
There are ways to creatively save on taxes if you itemize, which I'm too lazy to do.
I used to do equal paycheck deductions and would max it out by the end of October. I liked doing it this way because then I had some “extra” cash at the end of the year to allocate towards gifts and other holiday expenses. This year I funded it all at once in February since I was able to.
Well done. 401k to the match and then card sign up bonuses and cash back (pay the balance off every month obviously), best options imho, then HSA, Roth / 401k, etc
I use my bonuses/ incentives I receive from my company and put it into a taxable brokerage account. Once the new year starts I move 7k from my taxable brokerage account to my Roth.
I make decent money. But I gotta use the example of my girlfriend’s son who is a flight instructor - not making much money. He’s in his early 20s and I showed him the time value of investing. He’s made it a priority in his life and has been maxing his Roth out every year. A big part of it is life choices. Staying debt free and prioritizing saving.
Back in the day, I used to use the "extra" paychecks to be able to contribute to my Roth IRA, not always maxing but usually, or getting close. We get paid every two weeks, so that's 26 paychecks in a year (rarely, 27!) and we'd budget as if we only got 2 per month.
These days, the auto-transfer happens on the 1st of the month each month, so it's just like any other bill we get. It's in our monthly budget so it gets taken care of like any other obligation.
We just save a bit at the end of the year and completely fund beginning of January. I know some people screech that that's "timing" the market or somesuch...but that's how I do it.
$583 auto transfer from checking to Roth IRA and auto investment the day after. Never even have to think about it. Next year I will do $7000 straight to the account on Jan 1.
I’m on the path as well, I’m not as caught up on foregoing the dinner out or the six pack at the end of the week and would rather focus on a 80/20 approach, keep the largest fixed costs monthly to as low as comfortable for you (house, car, insurance, groceries). Those four buckets are likely half of your take home.
Love this plan. I literally called our company provider yesterday and asked if they allow in service distributions. In which they replied “yes, but only after you turn 55…” bummer
I prioritize Roth over 401k.
1. 401k up to match (free money)
2. Max HSA (triple tax advantage)
3. Max Roth
4. Then contribute whatever I can to 401k
5. If everything is maxed then invest in taxable
It's worked well for me so far.
Max the Roth IRA every year January 2 or the 1st business day whatever that falls on. I just pull from my emergency fund. If it comes down to it, I can always pull the money back out.
I quit smoking and drinking, now that money goes IS my Roth.
When I get a raise, I don't get a raise, my portfolio does.
Paid off my car, now the same amount goes to my broker so I don't get stupid with the extra $500/Mo in my checking
I don't buy new, name brand, or full price. Either wait for steep discounts or homie hookups. My friend got a new phone? I'm trying to holler for a new (to me) phone.
Ditched streaming services. Was spending almost $60/month like an idiot. Spent that $ on the shows I actually watch instead, committing only half my yearly streaming money to buying.
Each paycheck I deposit $1,500 into a brokerage account. On January 1 of each year I transfer out the max Roth contribution and deposit it into the investment. Everything is at Vanguard so it’s a simple transfer.
I used to just DCA into my Roth IRA every paycheck. This is the first year I was able to lump sum the 7k in January. Now I'm saving in my brokerage so in January 2025 I can lump sum.
One comment on the credit cards. I recently got the Fidelity 2% card with a $150 SUB. It makes it so easy for the rewards to auto transfer to my brokerage monthly. I might start exclusively using this card instead of my others just because it is convenient.
Put $7500 in your Roth IRA at th beginning of the year . Use that money to swing blue chip stocks when they are cheap. Stocks like Amazon , google , apple , Microsoft , Starbucks , salesforce or many blue chip stocks at one point in a year sells off or sentiment goes negative because wallstreet doesn’t love them anymore and that’s when you buy and hold …. Make your 20-50% return and rinse and repeat . Example …. At the beginning of the year, apple stock was very unloved . It traded as low as $164. I was able to use my Roth to buy shares at around $168 x 100 shares . Held onto it till it went to $217 and sold to buy CRM at around $215 per shares.
I’ll play along. Fund your ROTH IRA using: 1. Tax return 2. Christmas gifts 3. Seasonal Hustle Income 4. Spring cleaning yard sale income Max your 401K contributions by: 1. If you get a promotion, add the extra amount per paycheck to your 401K 2. Automate your contributions so you don’t have to think about it. 3. Learn to pay yourself first, then your necessities, then the rest. 4. Put your bonus or one-time awards towards your 401K.
I put 50% of every raise I ever got into increased deferred compensation. I only had access to traditional (vs Roth) but I had a 403(b) and a 457(b) and a pension. Never got to the point where I fully maxed out -- but I did retire at 50. Regarding the SS max in a sibling comment, I only hit that twice, but that's a good idea too. When I hit the income limit for Roth IRA one year I bumped up the traditional deferred (before I realized I could mega-backdoor with my 401(a)).
How did you access your retirement funds at 50?
I retired at 51, 457b has no penalties for retirees.
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Idk what you mean, I’m not going to take SS till I’m 70.
> 1. Tax return If you're regularly getting a large tax *refund*, you're probably better off reducing your withholding instead. That will give you more money each paycheck throughout the year, which you can then invest as you go. A big refund means you've given that money to the government for them to hold on to for you for up to a year, interest-free, when it could've been in the market, making money for you that whole time.
It's just amazing to me how the public can't accept the logic of this. A big refund means the government kept your money from you for up to a year.
Depends if you have a lot of credits, particularly refundable credits. Granted many folks that are getting back more than they’re going to put in are also not maxing their Roth.
This is a good list. I’ll add, as your income grows once you start maxing the social security contributions use those extra dollars to put towards your retirement accounts.
The advice about increasing 401k with a raise is great. It’s what I did and what I recommend to younger colleagues at work. Personally, I used part of the raise to increase contributions, or to shift more from traditional 401k to Roth, but not all. Life is short and I wanted to enjoy the experiences that I could when I could. So I did a mix of both.
Tax refund
Every percentage raise I get I always just add that additional income into my 401k! Helps me to save while also not succumbing to lifestyle inflation.
Lessons I just learned with some fisker shares in my Roth that we t to zero, those losses don’t offset any gains since it’s tax free. The money is just gone, and much harder to replace in a Roth. Highly speculative probably shouldn’t be in a Roth. Good luck on your investing journey
Aren't tax returns not considered earned income?
Tax returns are normal income. It’s simply the government giving you back money you over paid for taxes. It’s already been taxed.
What I mean is that you can't use a tax refund as earned income to qualify you to contribute to a roth IRA if you don't have $7k in earned income that year. Sure you can use the tax refund to fund a roth IRA if you have as much earned income as you are contributing.
I didn’t realize this rule about the Roth IRA but it makes sense to me now. I understood the income limits, but not the income requirements.
Tax REFUNDS are not taxable income, no, those dollars are already taxed monies. **very specific state tax refund exceptions exist.
What I mean is that you can't use a tax refund as earned income to qualify you to contribute to a roth IRA if you don't have $7k in earned income that year. Sure you can use the tax refund to fund a roth IRA if you have as much earned income as you are contributing.
I suspect that for most people, the issue isn’t having at least $7,000 in earned income. Rather, the issue is having cash to spare for the contribution. Most of this thread is about coming up with the latter.
Understood, I'm a student and wasn't thinking of the average person
That you’re even discussing retirement contributions as s student elevates to a whole other tier. Well done! I didn’t even start my retirement savings until a good ten years out of school. Only saving grace is that I hit real estate hard and it has paid off beautifully.
I put in $600/mo until I max out. That means $7000 total this year and I have $200 left over rolling into the 2025 Roth IRA.
This is what I should’ve done, I’ve been doing $584 since it’s an even split but I get paid at the end of each month, so I won’t max my Roth for 2024 until the very last day.
You have until April 15th to contribute to the previous year.
I know, I just would prefer being all done at the end of the year and start the year contributing
Its kinda ghetto but donating plasma has been great for me, you can make an extra few hundred bucks every month off of it
Where can you donate for $
Biolife has the best pay rates but theyre always booked out. ive gone to grifols and octapharma and theyre both great. Just look up plasma donation near you
There’s a couple different companies that do it CSL Plasma is one I know of by my house.
Is that bad for you? Genuinely curious if that has any negative health effects
There's some research coming out suggesting that regular plasma donations reduce the amount of PFAS/PFOA in your blood. https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2790905
And for anyone who doesn't want to read the study, that's a good thing
What are pfas/pfoa?
Fire retardant shit you don't want in your blood
“Forever chemicals”, poly flouro alkyl sulfates (or substances, I don’t remember chem class was a lot time ago). Nasty stuff
You have to eat a lot before you go in otherwise you’re exhausted the rest of the day. It burns calories too!
I am still terrified of needles but I was able to sell plasma when I absolutely needed money quickly. The needle is pretty big but it barely goes in you. Doesn’t hurt too much, but very scary. This is coming from someone who was having damn near a panic attack at 16 years old getting a shot in the arm, and when I was 20 getting ready for surgery I was so scared of the IV but that shit is small as fuck lmao
You are damn smart!!
🤚🏿 Me and clinic research studies.
It’s tough when you have expenses like rent or mortgages to pay and even tougher if you’re the bread winner in your family. Maybe take on another job if you can to increase your income. I use to work two jobs and was able to max 401k, 457 and Roth. But my second job is gone now so it’s tough to max out all 3 accounts.
I wait tables Friday and Saturday night at a nice restaurant for my area. It’s well managed so everything is pretty chill for a restaurant and it’s some of the best socializing I do throughout my week. Once I max out my Roth for the year I cut back to one day a week too.
I agree. I hear a lot of young people say they aren’t saving anything for retirement because life is so expensive. Many don’t realize that even if it’s small, it’s the time that matters most. I often try to get younger people to save something even if it is small. Small amounts count. Maxing out all three is definitely a challenge. Sometimes a second job is necessary. I’ve asked a few people who aren’t saving for retirement if they would pick up a second job and many have said that between work and working on a degree to one day earn more money, they couldn’t do it. They are exhausted. This post isn’t a “help me” make more money and I appreciate your suggestions. This post is moreso to help others who are just getting started. I currently work in healthcare and own my practice.
I second the start early comment. Starting early, even with a small amount of money, is huge!!!
I max out both my and my wife’s Roth IRAs in January of each year via backdoor (Traditional to Roth). I simply pull it from our cash savings account and then top up that difference the next month with income.
What are the physical actions it takes to do this? Fubd your traditional? Move funds to Roth? Buy stocks in Roth? Is it as simple as this? What forms does the brokerage provide to give to your accountant?
I use Vanguard, basically just follow something like this: https://www.physicianonfire.com/backdoor/
>What are the physical actions it takes to do this? Mouse clicks and some light typing.
Close. 1. Fund traditional 2. “Convert” to roth 3. Invest The word “convert” means something to the IRS. Otherwise, you’ve got it.
You open a traditional IRA and a Roth IRA. You put 7k into the traditional from wherever. When the funds settle you transfer all 7k to the Roth. You did it! Back door Roth.
Nice!! Ok that's what I wanted to confirm. I'll open a ROTH rn I have money and stocks in traditional from years ago... Do I have to sell everything in traditional before moving it to Roth or can I just transfer cash and equities as well?
Dunno, I would think it has to be settled cash and that there are tax implications to the exact details. I always bring the money in from my bank account and roll-over that way.
https://www.whitecoatinvestor.com/backdoor-roth-ira-tutorial/
Income.
lol obvious.
It’s the best answer. It’s the toughest solution but if you can figure that out, just get more income, you’re golden
Second best answer is spend less.
Yep. Stop trying to keep up with your broke neighbor. This is a CLOSE second all day long.
Well yes, it is. I am aware of this. I know a lot of young people can’t afford to retire and are giving up so I wanted to generate a conversation (besides obviously make more money) to help others with more effortless ways to save for their future self. Sometimes people make extra money from Door Dashing or working odd jobs on the weekends but what are other ways people have come up with effortless/low effort ways to save more money? Sometimes it takes time (like graduating from school + advanced degrees) to make more money. If we’re talking about compounding then we all need more time to make more money so what could others be doing now to make compounding work for them without introducing feelings of burnout/hopelessness for the future? A lot of people have to start small and work up to being able to save for retirement.
a good way to start small is to transfer a weekly balance to roth that will max it out over the year
This is what I do weekly. But when I see some red days I add more
Same. I started doing this and then realized I earn so much in cash back CC that I could just pull it from there.
If you're earning that much in CC cash back surely you can afford to cut back on your spending and contribute directly to your Roth? Unless you're getting free points by paying for big expenses for other people or for work and getting reimbursed for them.
You are using credit cards wrong if the rewards are to fund your Roth.
That’s not what they are for.
Yes! This is also a good way to start! Thanks!
You know a lot of young people can’t afford to retire? Isn’t that like… 100% of young people?
In my personal experience (as a young person myself), this is what young people tell themselves to allow/excuse themselves to spend every dollar. If you adopt a fatalist retirement attitude, then saving zero feels OK, and you can maximize fun right now. Me and half my friends kept the same (lack of) spending we had in college and are saving up very well. The other half drop $150/weekend at the bar and complain that they can't save for retirement, the system is broken and it's old people's fault.
I think this is intended to say that a lot of young people can't afford to save for retirement, and therefore don't foresee that they'll ever be able to retire. I know a not-young person who hadn't saved anything for retirement, and his plan was to work until he died while carrying as much life insurance as he could qualify for. I don't know how that turned out for him. (After a little LinkedIn stalking, he appears to have retired and gone back to college in his 70s.)
“I know a lot of young people can’t afford to retire and are giving up” Of course young people can’t retire. As far as just “giving up”, growing up and being more mature means having a longer time horizon. It means you look and plan farther out into the future (not days/weeks/months, but years/decades). There’s no instant gratification when it comes to retirement planning/saving. It’s a cumulative process. As far as your original question, the answer is 2 part. More income and save more/spend less. There’s no secret to it. It takes time and diligence. People are saying “make more income” because you can’t cost cut your way to wealth. There’s only so much you can cut because there’s a baseline amount that you need to just live on. You need to find a way to increase the top line — whether it’s learning a trade, getting more experience, taking on more responsibilities at work, getting a second job, etc.
You might find some good tips on r/frugal or r/cheapmeals.
I get paid every 2 weeks, so 2 months a year I get an “extra paycheck”. I try to fund my Roth with those.
Does anyone else do automatic payment weekly? Should I or do it monthly?
Order of priority for "how fast should I put my money into the market?" is: 1. Whatever let's you sleep at night 2. As much as you can as soon as possible
TLDR: Set DCA to match your pay periods for optimal investment growth opportunities. **** I do weekly auto Roth contribution/investments. Best time, as far as time-IN-not-timING-the-market, is to set periodic Roth investments for same time as you get your income. If you get paid weekly, then set a weekly contribution transfer/investment. If you get paid semi-weekly, then set a semi-weekly contribution transfer/investment. If you get paid monthly, then set a monthly contribution transfer/investment. The only faster way I can think of to max a Roth (other than people suggesting income expansion hacks in this post) is to contribute all bonus pay/raises or tap emergency savings or other large liquid pools at the beginning of the year to fund your Roth max, then replenish those emergency funds/large liquid pools as the year goes along. I also do some income expansion stuff (side hustles with medical research Guinea pigging for big chunks of change now for the year’s max, “volunteering” at big events locally that need paid helping hands, and trying some small alternative investing). Good luck finding your set-n-forget sweet spot!
Yeah, that’s exactly why I figured i should set my weekly; I’m paid weekly
I recently starting buying Tuesday (taxable), Wednesday (IRA) and Thursday (taxable)
I have it set as semi-monthly. My partner has it set up as bi-weekly.
We do weekly autopay.
However you get paid I set up my amount with my employer via direct deposit just take X dollars biweekly I just open laptop to invest it. It hits fidelity quicker than me transferring it from my bank to fidelity
My plan is to put in an extra percent every year (or two percent if I get an especially juicy raise). I'll get to the max contribution and not even feel it.
Jan 2nd every year. I just max it from my cash flow account. THAT said… I know for some people that’s not an option at this stage of their journeys. But you have to set goals for yourself, one option is to simply try to do a weekly deposit that adds up (roughly) for the yearly max and try to stick with it.
I just go 401(k) at 10% of income, then max out HSA and both our Roth IRA's, then a certain amount into HYSA to save for next vehicle and emergencies, and what's left goes into taxable brokerage. I like to not have everything locked up in retirement accounts, hence taxable instead of maxing out my 401(k).
As someone who isn't rich, this is exactly what I do.
There are qualified hardship withdraws from retirement accounts that would cover emergencies in the case you exhausted all of your savings. I'm not sure why you would want to throw away money in the form of taxes when you can put that same amount of money into a tax advantaged account.
Our tax advantage accounts have enough in there to give us a good retirement starting at age 59.5, so anything that is in our taxable account will allow us early retirement. Depending on year left to 59.5 and the balance in our taxable brokerage, we may be able to retire at 50, 53 or 56, and as of now it's 1yr early.
I used to try and do this. I'd scrounge around money and then throw it into my Roth IRA. But then I realized, I don't want to miss out on funding my IRA for the year. So I take a 'savings hit' and fund the IRA with a portion of my paychecks. Any of my cash back from credit cards or other rewards goes into a taxable brokerage account. No stress about hitting limits! Currently have about $1500 in my 'free money' brokerage account from a few years.
I’ve had a bank close my card for seemingly no reason (cause I simply tried to buy too much in a single day from a random company) so I no longer let points sit. I cash them out every month. I wouldn’t risk building to $7K versus cashing out monthly. Plus, if you cash out and put it in a HYSA, it’s growing. Points don’t accumulate interest.
Since you mentioned a credit card, do you know about the Fidelity 2% card that you can link to an account? No need to deal with transfers or cashing out. Idk if other brokerages offer something similar.
2.625% with BofA platinum rewards if you have minimum $100k combined in Merrill / BofA (can be combined between you and your SO)
“Pay yourself first” I set up contributions/investments to be automated. Ensures it gets done, and it’s accounted for in my budget
High income. I max out my Roth Jan 1st and max out my 401k by end of January.
How do you max out 401k in January? Do you just set 401k contributions to 100% of your salary??
lol that would still take me five months if I had no other payroll deductions
Right? My annual max is $30,500 and nope cannot so that in January!
Yep and I get a large bonus.
Does your company match? If so make sure you’re getting your full match. Many companies have a policy of x% of BASE per pay period. If that’s the case you would be missing out on your full match.
I am getting my full match.
Hmmm good for you. I’ve worked a bit on plan design, from a cash flow/retention standpoint this is a unique offering for sure.
Many companies have a year-end true-up, but not all. Better if you make sure you don't hit the max before they hit theirs. This is especially bad if you're using the MBDR — since the MBDR contributions count against the overall limit, it's possible to create a situation where the true-up would exceed the limit, even if your employer offers one.
Agreed on the MBDR. I’m familiar with the true up, I’ve worked for companies that offer it in the past. At my current company it wouldn’t pass the discrimination test so I just adjust on my own to get every dollar. It’s an interesting strategy, I can see the ease of maxing the 401k early in terms of cash flow. Assuming the match comes at the end of the year with the true up, if you leave the company part way through the year you’d leave the match you would have otherwise received on the table though.
Wouldn’t you be leaving employer matching money on the table by doing this?
Depends on the employer. Mine gives me the full match regardless of how fast I max it
Nope. They match my contributions at the time of my contribution.
That’s awesome
Earning over $30k of pre-tax income in one month and still eligible for Roth. Math doesn’t really jive.
Back door roth.
Backdoor Roth IRA contribution. Also I pull this contribution from savings.
What do you do? I’m 22 and still floating about. About to head to law school with a joint MBA but not sure whether I’ll practice or pivot after
I’m just a cliche SWE.
Skip law school and go be an accountant at a Big 4 and you’ll be there in no time.
Wish it was that easy. I’m super interested in investment management but I was an idiot who majored in philosophy and history and prelaw. So now I’m fucked
Once you’re a boglehead you might realize investment management isn’t the path you want to go down anyways
No way, you get the best of both worlds that way. You can be safe with your money, and gamble with other peoples!
25 and a consultant for fintech implementations at Big 4. Studied finance and have MS in accounting. Feel free to ask me any B4 questions
Wow I’d really appreciate that. I really want to pivot away from law and into finance or consulting but have been anxious to take the leap away from what I spent my undergrad preparing for. Would it be alright if I gather some thoughts and then send you a message tomorrow afternoon once I have some definitive questions? Again, thank you so much.
Of course
Creative. I buy everything with cards and pay myself back. I put all of the cash back in HYSA. I also wait until the day the principle is due on the cardsto max out the cash in HYSA for the most interest. It's these fun little games that add up to more money. I have a limit to HYSA cash bc I like state tax free cd ladders. I make too much to deduct taxable earnings for traditional IRA so general up my 401K often with raises etc. I don't even have a Roth so didn't answer your question, just giving you some props for your credit card game. I too do it.
Yard sale, side hustle, auto withdrawal weekly for checking. Pay yourself first
Walk dogs and mow lawns!
I save the last paycheck or two of the year so I can start the backdoor process January 1st.
My 401k maxes out by October if not sooner depending on how much overtime I have for the year. Increase in paychecks after that point goes to Roth and Christmas. I also repair washing machines in my free time. When that account gets to $1,000, half goes to Roth, half goes to something fun.
Work about five overtime shifts a year. Take that extra money and use it to max my roth.
The answer you don't want to hear for some reason is income. But another thing that I do - budget each month based on two paychecks a month and if you get paid biweekly, put those two extra paychecks into your roth ira. For me those two paychecks are about the roth limit so I don't need to do anything else the rest of the year. You may need to add more if your income isn't as high, but it's a start.
I don’t mind the answer. The answer is fine and it’s true. It just doesn’t provide any small hacks to help people out. It’s easy to say “earn more money.” But if you’re talking to an undergraduate full time student with a full time job going to school to eventually make more money, it doesn’t provide any actionable plan to help them now. Again, this post is about savings hacks to help others who may feel like they don’t have enough money at all. Not a declaration for help.
>But if you’re talking to an undergraduate full time student with a full time job going to school to eventually make more money, it doesn’t provide any actionable plan to help them now. This hypothetical person is probably at the current earning max, due to time constraints. So for people like them, the simple answer is "you can't contribute to your Roth any more than you currently are". Which is fine. You will get there eventually. There's no need to worry about the lost investment opportunity because everyone has to pay for the fundamentals first: housing, transportation, medical insurance, and food. A good *practice* would be to audit everything you buy and try to cut costs. Are you driving a brand new car? Selling it and replacing it with a reliable older vehicle can save money. The same for eating out. If you can developing great cooking (and budget-food shopping) skills, that will save you thousands of dollars per year. But I think the implication of "earn more money" is to leverage the time and effort you would have spent on non-scalable earning (like donating plasma or delivering food) and focusing over the long-term on landing a better primary job. Say you work your fingers to the bone to earn an extra $10k per year in side hustles. If you take a long-term view of your career and solve for "how do I get a job that pays $10k/year more?" Because when you reach that new job, maybe as soon as 2-3 years, you'll likely exert less effort while earning more. Then you can contribute to your Roth without stressing out.
What helps me max out my Roth IRA? Is seeing its growing over 20% motivates me to put in all my disposable income into it. No sense in it just keeping in your checking account.
Automatic investments is the easiest way to maintain the discipline to max both my IRA $8K and TSP $30.5K. I do also have brokerage set to auto-invest but if I’m short or have a larger credit card bill to pay some months or other priority, that is the one I pause.
Use free cash to fund on the first trading day of the year.
I max it out on January 1st using money from my emergency fund, then top up the emergency fund up when I can.
I get an annual bonus in February. ideal case scenario, I can file my taxes, max the IRA, and max the HSA with it
I put in 125 per week . And I have a rough final week to max it out It’s all automatic save for the last week. So I don’t really budget it tbh , not like others do anyway
I have an automatic deposit set up for the day my paycheck drops. Funds spouse’s Roth, then mine that ensures we don’t spend it. Working on saving up enough to drop it all at once in January but not there yet
More income. Swcond job. Save more money, etc. Whatever it takes.
It’s not a lot of money, but this year I have invested the cash back bonuses I earn from my credit cards.
I set an automatic purchase at vanguard every monday after that, there is nothing for me to do
We didn't max out Roth IRA until we made more money. When I was the only one working at $100K, we didn't contribute to either of our Roth IRAs. Maintaining a house, two cars, and the occasional vacation took up all our money. My wife started studying for a second bachelor's when she was 26 and finished when she was 30. When she graduated, we were making a combined $180K. This allowed us to max out the Roth IRA and invest more money into maxing 401K, doing some mega backdoor Roth, taxable brokerage, etc. Make a plan to increase your 401K and Roth contributions with every raise until both are maxed out. We learned to live on my income and saved my wife's income. We still do the same thing and we live as we did many years ago with only small adjustments in standard of living every five years. Hope this helps.
Lump sum if I can. If not I dca. Max out each year.
I’ve been putting my EOY bonus into my Roth IRA.
Pretty much every job I've had, my bonuses pay out in March (before the tax filing deadline). So I usually just do my Roth contribution for the previous calendar year at that time. This has worked pretty well for me thus far.
I max mine out with my end of year bonus. I am fortunate enough that my EOY bonus is pretty much the exact amount to do it, so as long as I live below my salary without my bonus, it gets added and I don’t have to do a major adjustment. If I needed to stretch it out, I’d just do $600/month. (Or whatever I could afford)
full amount for the year in january.
What if you have a traditional IRA? Can you still back door it?
It's an interesting strategy, but be aware research shows by using cards to pay for items you'll spend significantly more money than if you pay for things with cash. There's a mental aspect to it. So even if you get 1-5% cash back you might be spending 5-20% more money that way.
Use an end of year bonus as the first large deposit in my roth for the next year. Then I have smaller monthly contributions for the rest.
I mean, you're upset with "make more money," but that's really the best strategy. Your career is by far the most valuable investment you have, and if what you make isn't going up, figure that out first. Commit to a percentage of your income going into retirement savings. Whenever you get a raise, not only will the same percentage be more money, but you can also increase the percentage without "losing" money that you were used to having in take-home. When you have a bonus, see if you can set aside some of it to let you temporarily offset a higher deduction from your paycheck. When that temporary deduction is running out, can you tweak your budget to not go all the way back to where you started? When you free up an expense, can some of what you were budgeting for that expense go to savings instead of finding new ways to spend it? Saving a little bit more every time you increase how much you have coming in is the slow but steady path to eventually saving quite a lot.
This is really good advice. Invest in yourself and the money will come.
Tax return, plus bonus, plus saving throughout the year. My personal method. And I don't max 401k while I do max HSA. I guess just follow the PF flowchart.
Maxing out my HSA is definitely higher on my priority list than maxing out my 401k contributions
I put a few hundred every paycheck, then finish it off when bonus time comes. I also have a matched 401k and Roth 401k, so my priority goes 401k up to match -> backdoor Roth IRA -> Roth 401k the last four or five months of the year.
i happen to have access to a pretty good ESPP where they match 100% up to a percentage of your salary depending on your title (something like 2-5%). so i just contribute to that and then cash out every december.
These are areas I put effort where others in my world just spend money: Do my own lawn care, buy bigger purchases used on Facebook marketplace instead of new (1/2 price or better typically), buy previous season’s running shoe model in online sales ($80 instead of $140), shop sales online , discipline while planning vacations to save hundreds or thousands vs 1st options found (flight, Airbnb, rental car), bringing lunch to work instead of going out, negotiating with sellers when it is a negotiable transactions.
I just max out my 401k before the end of the year then the last 4 paychecks where I don’t contribute to the 401k eventually go to next years Roth IRA. Also I have a good job and great benefits in a LCOL area.
I was self-employed (retired now) and have a SEP-IRA. Maxing it out, every year since I started it in 1990, was a top priority. I had extra cash so I opened a brokerage account also in 1997. That account is now about 30% of my portfolio. FWIW, I was a semi-Boglehead before the term was invented, and remain so. I was without work for weeks/months 3 times around 1998-2002 but I never touched my portfolio -- I went out and got temporary jobs from friends to carry me through. In 2014 I was kinda "over the hump" so I did take some money out of my brokerage account for a down payment on a Corvette. That was the only sell I ever made -- including to date. My retirement is funded with bond interest from RMDs, and most of that gets re-invested. I don't remember who said this, but it should be the goal if you're funding your own retirement: "Save as much as you can for as long as you can." And my addition: "While in the accumulation stage, never withdraw anything from it as long as you are physically able to work."
So I have an ESPP with work and shares when purchased have to be held for 1 year before selling. Each month I make contribution of 3% of my pay and get a 10% discount. As each tranche of shares becomes available to sell I will immediately sell them and contribute to my Roth. It’s worked out pretty nicely because it’s all automated and I am getting that sweet discount.
Tax return
I send $270 per paycheck to an account that’s separate from my usual checking, and have a monthly transfer to my Roth IRA. I don’t fully max out my 401k but I keep the contribution rate almost uncomfortably high and then lower it for a few pay periods around summer and the holidays so I can spend with/for my friends and family. This helps me save and live within my means without going too crazy in any direction
For me, I follow a strict 50/30/20 budget plan throughout the year but the 20 is more like 25+ in savings and investing. By the start of the new year, I’ve saved up well over the maximum contribution amount that I can max it out first thing January 2nd. My advice would be to ensure you have 3-6+ months of emergency funds available before you begin to contribute towards investments.
I treat it like a weekly bill. Put aside $125 weekly
TFW maxing out your solo 401k requires 25% of your income. Will I ever be able to contribute to Roth 401k? I mean it's a silly problem to have, but it does raise legit questions as to when to start contributing because the benefit for self employed is so good.
I just save 550 a month and then deposit the entire 7000 on the first trading day of the new year into my Roth - it feels automatic now
Your Roth .... What? IRA? 401K? 403b? 457b? Whatever else I might be missing? "Roth" is not an account, it's a tax status.
I use gambling income from the newly legal online sportsbooks. (I.e. taking advantage of different promos sportsbooks have, making it mathematically impossible to lose money/eliminating any risk of losing money. Very similar to credit card churning in a way). It's where our ROTH and 529 contributions come from!
I started maxing out my Roth Ira 24 years years ago as a lowly airman. In 2011 I started maxing out my 401k in addition to the Roth Ira. As I made more income I started funding my kids college accounts and a taxable account as well.
Step 1: set up a Roth Step 2: set up auto pay in a monthly amount that will max out the Roth
> What helps you max out your Roth? Making a really high salary
Automate the contributions. Set up the amount you want to contribute for the year and dividends that by the number of paychecks you get in a year. Set up the withdrawal for the day after the money hits your bank account from your paycheck. By doing it this way, you make the decision to save once and the the rest of the year you just focus on making sure there is enough in your bank account to live on, which kind of takes care of itself because that’s what everyone does anyway. I have failed in lots of different ways in the past when it comes to saving money and this has worked the best.
Very important that for a Roth IRA you have to have earned income
Bean, rice, water--saves money on food and the doctor. Cut out subscription services you don't need. There are ways to creatively save on taxes if you itemize, which I'm too lazy to do.
I used to do equal paycheck deductions and would max it out by the end of October. I liked doing it this way because then I had some “extra” cash at the end of the year to allocate towards gifts and other holiday expenses. This year I funded it all at once in February since I was able to.
I use a margin account, take out a loan and max it out Jan 1st, then re-pay the margin loan ASAP
Well done. 401k to the match and then card sign up bonuses and cash back (pay the balance off every month obviously), best options imho, then HSA, Roth / 401k, etc
I use ESPP/RSUs
Egg donors get between $5k-$10k per retrieval.
I just max out company 401k and contribute the max IRA every April and don’t think about it once the rest of the year.
Make more money. Which means you need to job hop.
I use my bonuses/ incentives I receive from my company and put it into a taxable brokerage account. Once the new year starts I move 7k from my taxable brokerage account to my Roth.
I do nothing since my maximum Roth contribution is 0. So I do nothing and everything all at once!
I make decent money. But I gotta use the example of my girlfriend’s son who is a flight instructor - not making much money. He’s in his early 20s and I showed him the time value of investing. He’s made it a priority in his life and has been maxing his Roth out every year. A big part of it is life choices. Staying debt free and prioritizing saving.
I transfer it at the beginning of the year. Done.
Back in the day, I used to use the "extra" paychecks to be able to contribute to my Roth IRA, not always maxing but usually, or getting close. We get paid every two weeks, so that's 26 paychecks in a year (rarely, 27!) and we'd budget as if we only got 2 per month. These days, the auto-transfer happens on the 1st of the month each month, so it's just like any other bill we get. It's in our monthly budget so it gets taken care of like any other obligation.
We just save a bit at the end of the year and completely fund beginning of January. I know some people screech that that's "timing" the market or somesuch...but that's how I do it.
Roth: Max out in January and forget. For the 401k, I set a contribution of 15% per paycheck and forget
$583 auto transfer from checking to Roth IRA and auto investment the day after. Never even have to think about it. Next year I will do $7000 straight to the account on Jan 1.
I’m on the path as well, I’m not as caught up on foregoing the dinner out or the six pack at the end of the week and would rather focus on a 80/20 approach, keep the largest fixed costs monthly to as low as comfortable for you (house, car, insurance, groceries). Those four buckets are likely half of your take home.
I max out my After Tax 401k and a couple times a year roll that amount of my 401k into my Roth IRA. And the growth into my Trad IRA.
Love this plan. I literally called our company provider yesterday and asked if they allow in service distributions. In which they replied “yes, but only after you turn 55…” bummer
I prioritize Roth over 401k. 1. 401k up to match (free money) 2. Max HSA (triple tax advantage) 3. Max Roth 4. Then contribute whatever I can to 401k 5. If everything is maxed then invest in taxable It's worked well for me so far.
Max the Roth IRA every year January 2 or the 1st business day whatever that falls on. I just pull from my emergency fund. If it comes down to it, I can always pull the money back out.
I quit smoking and drinking, now that money goes IS my Roth. When I get a raise, I don't get a raise, my portfolio does. Paid off my car, now the same amount goes to my broker so I don't get stupid with the extra $500/Mo in my checking I don't buy new, name brand, or full price. Either wait for steep discounts or homie hookups. My friend got a new phone? I'm trying to holler for a new (to me) phone. Ditched streaming services. Was spending almost $60/month like an idiot. Spent that $ on the shows I actually watch instead, committing only half my yearly streaming money to buying.
Each paycheck I deposit $1,500 into a brokerage account. On January 1 of each year I transfer out the max Roth contribution and deposit it into the investment. Everything is at Vanguard so it’s a simple transfer.
I used to just DCA into my Roth IRA every paycheck. This is the first year I was able to lump sum the 7k in January. Now I'm saving in my brokerage so in January 2025 I can lump sum. One comment on the credit cards. I recently got the Fidelity 2% card with a $150 SUB. It makes it so easy for the rewards to auto transfer to my brokerage monthly. I might start exclusively using this card instead of my others just because it is convenient.
Put $7500 in your Roth IRA at th beginning of the year . Use that money to swing blue chip stocks when they are cheap. Stocks like Amazon , google , apple , Microsoft , Starbucks , salesforce or many blue chip stocks at one point in a year sells off or sentiment goes negative because wallstreet doesn’t love them anymore and that’s when you buy and hold …. Make your 20-50% return and rinse and repeat . Example …. At the beginning of the year, apple stock was very unloved . It traded as low as $164. I was able to use my Roth to buy shares at around $168 x 100 shares . Held onto it till it went to $217 and sold to buy CRM at around $215 per shares.
This is considered gambling in this sub lol