Comments on: How Much Does It Cost, Per Month, To Fully-Fund Various Retirement Accounts?

By: Sam

Sam — Tue, 18 Mar 2008 15:22:31 +0000

This post made me feel better beacause my husband and I often find ourselves short on cash. It was a good reminder that one of the reasons we are low on cash is that we are trying to stick $49,000 in our 401ks and IRAs (2007 & 2008)this year.

By: NCN

NCN — Mon, 17 Mar 2008 15:21:22 +0000

@kitty – YES! I LOVE that I can contribute to my retirement account AND reduce taxes. NCN

By: kitty

kitty — Mon, 17 Mar 2008 15:13:10 +0000

“Fully funding two 401(k) plans and two Roth IRAs would equal – $15,500 + $15,500 / 12 Months = $2583.33 per month”
Actually it’ll be less since you are contributing pre-tax dollars to 401(k). $2583 a month in pre-tax dollars is significantly less than $2583 in poast-tax dollars. Depending on your tax bracket and the state you are in, could be as much as 30-40% less.

And if you earn sufficiently high salary, live in high-state tax or have capital gains one year, max 401K contribution may be the only thing that helps you avoid AMT; or allow you to contribute to Roth. Than your tax savings will be even higher.

By: Future Millionaire

Future Millionaire — Mon, 17 Mar 2008 14:37:54 +0000

Thanks NCN for explaining.

By: NCN

NCN — Mon, 17 Mar 2008 13:28:11 +0000

@Future Millionaires – You are correct… I was trying – and it was difficult – to show how much it would take to fully-fund for 2008. At the same time, I wanted to show that you did have 4 ‘extra’ months. Of course, if you wanted to do 2009 over the same span of time, you’d have a 4-month overlap (Jan – April 2009).

By: Future Millionaire

Future Millionaire — Mon, 17 Mar 2008 11:49:54 +0000

NCN – why not put $416 per month for your Roth IRA instead of just 312.50 because Jan – April 2009 you’d have to make double payments to fund the full amount for both years.

Then you get even more pumped because it would be $833 instead of $625.

Cheers!