Maggie66
Level 2 Member
Hello all and thank you in advance for your advice and suggestions. I have been a long time lurker of Saverocity (and the majority of the blogging websites that have been incorporated here), but have been reluctant to post as I consider myself to be heavily involved in the consumption of Saverocity knowledge. Making the self-imposed mindset switch from financial “noob” to an intermediate level has been a difficult task for me. As I’m sure you will gather from thoughts below, I’m not sure I should be allowed to shake the “noob” label.
My main question is: When does it (NOT) make sense to utilize a Traditional 401K plan?
I am really having a hard time finding an answer to this question. I know it’s been brought up on this forum before, but I wanted to explore it in greater detail. Case Study: my parents, who hail from the rural Midwest, have worked their entire lives day in and day out. Both now have medical conditions (arthritis, joint issues, back issues), but are still 7-9 years away from retirement. How much value does the 401K offer them at that point? Sure, one can argue that it keeps them “living” self-sufficiently, but they have forgone travelling or purchasing luxuries throughout their life because it wasn’t affordable. Now that they are old, travelling (if at all) with their disabilities will cost them much more than it would have if they were young and healthy. I’m pretty sure a hiking trip to the Grand Canyon is out!
Maybe I’m paranoid, but I am sincerely worried about pushing my earned money out so far ahead. Will I be disabled? Will I die? (I didn’t check the statistics). Basically, will I be healthy enough to enjoy the money that I have packed away for so long? What is the true cost that I am paying for not being able to enjoy life (more) now? Will a $1000 Grand Canyon trip today cost $10000 when I’m 67, hobbled, and require a ATV-like wheelchair? I know that I am in the minority (and definitely missing something) because I cannot find much of a debate via google on this topic. Every source exclaims, “Max out your traditional 401K, max out Roth IRA and max out HSA!”
I do understand the usefulness of the Roth IRA. Having the ability to take out my contribution penalty free at any time is extremely important to me. This is something that I will definitely begin utilizing. But betting 37 years from now, when I can finally tap into my 401K, that I will get the same enjoyment, for the same cost, from my travels seems too much of a stretch for me. My family (including my wife’s) has seen too many early deaths and illnesses and we want to enjoy the “good years” with our family. Is it worth foregoing the 401K? I honestly do not know.
Two simple answers I foresee would solve my dilemma are:
1) Earn more money so that I can take advantage of the 401K and travel at the same time
2) Cut monthly costs in order to save for travel/luxuries
I originate from a rural Midwest village and family. I still wear clothes that were purchased back in high school (I’m 30 now). My bike, which I used through college, was purchased as a high school freshman. My wife and I have one vehicle that we use for carpooling to work. I was taught to only buy something if I have the cash in hand. The issue is not whether we CAN put money into a 401K; it is truly WHETHER it makes sense for us to do so.
I wholeheartedly do not mean this to be a trolling thread. On the rare occasions that I do see my questions asked by others, they are typically deemed “conspiracy theorists” or “nut jobs”. I’m hoping to find someone with similar concerns and advice on how they dealt with this feeling. Am I truly alone? Thank you.
My main question is: When does it (NOT) make sense to utilize a Traditional 401K plan?
I am really having a hard time finding an answer to this question. I know it’s been brought up on this forum before, but I wanted to explore it in greater detail. Case Study: my parents, who hail from the rural Midwest, have worked their entire lives day in and day out. Both now have medical conditions (arthritis, joint issues, back issues), but are still 7-9 years away from retirement. How much value does the 401K offer them at that point? Sure, one can argue that it keeps them “living” self-sufficiently, but they have forgone travelling or purchasing luxuries throughout their life because it wasn’t affordable. Now that they are old, travelling (if at all) with their disabilities will cost them much more than it would have if they were young and healthy. I’m pretty sure a hiking trip to the Grand Canyon is out!
Maybe I’m paranoid, but I am sincerely worried about pushing my earned money out so far ahead. Will I be disabled? Will I die? (I didn’t check the statistics). Basically, will I be healthy enough to enjoy the money that I have packed away for so long? What is the true cost that I am paying for not being able to enjoy life (more) now? Will a $1000 Grand Canyon trip today cost $10000 when I’m 67, hobbled, and require a ATV-like wheelchair? I know that I am in the minority (and definitely missing something) because I cannot find much of a debate via google on this topic. Every source exclaims, “Max out your traditional 401K, max out Roth IRA and max out HSA!”
I do understand the usefulness of the Roth IRA. Having the ability to take out my contribution penalty free at any time is extremely important to me. This is something that I will definitely begin utilizing. But betting 37 years from now, when I can finally tap into my 401K, that I will get the same enjoyment, for the same cost, from my travels seems too much of a stretch for me. My family (including my wife’s) has seen too many early deaths and illnesses and we want to enjoy the “good years” with our family. Is it worth foregoing the 401K? I honestly do not know.
Two simple answers I foresee would solve my dilemma are:
1) Earn more money so that I can take advantage of the 401K and travel at the same time
2) Cut monthly costs in order to save for travel/luxuries
I originate from a rural Midwest village and family. I still wear clothes that were purchased back in high school (I’m 30 now). My bike, which I used through college, was purchased as a high school freshman. My wife and I have one vehicle that we use for carpooling to work. I was taught to only buy something if I have the cash in hand. The issue is not whether we CAN put money into a 401K; it is truly WHETHER it makes sense for us to do so.
I wholeheartedly do not mean this to be a trolling thread. On the rare occasions that I do see my questions asked by others, they are typically deemed “conspiracy theorists” or “nut jobs”. I’m hoping to find someone with similar concerns and advice on how they dealt with this feeling. Am I truly alone? Thank you.