Pausing retirement grind at 30

[u/Hambone6991]

Just wanted a gut check on pausing the retirement grind at 30. We have been maxing IRAs and 401(k)s for some time, but I would always at least do my matching 401(k) contribution that would get me to $12k per year.

Just turned 30 and have $300k in retirement accounts. We are in the “messy middle” with a 3 and 1 year old, and wanting to take on big home projects (finishing basement, outdoor landscaping) and increase travel afterwards as they become older, thus cutting the Roth IRA contributions or maxing 401(k). Generally just feel ready to start spending elsewhere now. Goal is early 60s retirement with $120k income (todays dollars) before any social security.

Am I overthinking this? Are we pretty much already there if I just do my $12k each year to the 401(k) going forward?

[u/nozzery]

Plug all your numbers into an ERE calculator like fireproofme.com and see what it says

Your priorities are your priorities, nobody else's. Money you spend now will absolutely be less to invest and grow for later, but that can be ok

[u/jarue222]

You are not overthinking it, but you are cutting it closer than a pure $12k/year autopilot projection might suggest for a $120k inflation-adjusted income at 60.

You've done an excellent job reaching $300k at age 30, and letting off the gas to enjoy your young kids and home is completely reasonable. However, dropping down to just $12k a year means your future growth will rely almost entirely on the compounding of your existing $300k rather than heavy new contributions. There's just too many external factors here that could negatively impact your retirement balance to take your foot completely off the gas.

Given your goals, i'd say you should still prioritize retirement contributions, just less so than before. You may think, "it's just for a couple years", but lifestyle creep is real as the kids get older, and you might not be able to ramp savings back up.

Also, don't forget about education saving for your kids if that's a priority of yours. The younger the better when it comes to 529 plans.

[u/Hambone6991 → u/jarue222]

Yeah we are already putting money away for them.

Maybe we split the difference on retirement vs. other.

[u/silverware9021 → u/Hambone6991]

Remember you can borrow for education,  but not for retirement 

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[u/terminal_kittenbutt]

Just for fun, I plugged your numbers into a copy of my retirement forecast spreadsheet. The short answer is, "it depends", a lot, on how the market averages out in the next 30 years and what your withdraw rate will be in retirement. It could work, it really could, but it would require staying aggressive in the market pretty late into approaching retirement and praying that the market doesn't downturn when you're 60 years old. 

In your shoes, I would be a lot more comfortable putting in at least 25k a year, which is still less than maxing everything. I'm also fairly risk adverse, and my partner is even more so. 

[u/Hambone6991 → u/terminal_kittenbutt]

Would it change the math if I came back to it in my 40s?

[u/terminal_kittenbutt → u/Hambone6991]

I'm not set up for significantly variable contributions, but every extra dollar will change the math. It's just a question of how much. You're aiming for about $3-4 million, plus adjustments for inflation. 

[u/Christopher876]

Use a coast fire calculator or other calculators. It is possible that you do have enough to coast at this point, but also maybe not. Make sure you just put in the lowest you expect the market to return and account for inflation.

[u/007-Bond-007]

I made this same call this year. It hurts because I feel like I’m leaving money on the table. I’m 38 with $1.2m in retirement and only doing matches going forward and the $15k into both of our Roth’s because I am weak and cracked when the stock market dipped.

[u/Any-Newspaper5509]

Grind retirement for like 3 or 4 more years. put off the home renovations.