Author Topic: FIRE in (Hopefully) 3 Years, Max 401k in Short-Term or No?  (Read 1298 times)


  • 5 O'Clock Shadow
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FIRE in (Hopefully) 3 Years, Max 401k in Short-Term or No?
« on: April 23, 2018, 03:08:54 PM »
Hi All - looking for some advice on whether or not it is worth it to invest in 401k for the short amount of time I will be eligible

Life Situation: 30 years old / Married Filing Jointly / Living in a low cost city in the Midwest

Gross Salary/Wages:

Myself: $50k base and $20k commission (from W2 job), expected $100k from side hustle = $175k total
Wife: $75k

Current 2018 deduction plan:

Myself: Max out HSA, looking for advice on 401k
Wife: 401k maxed


My wife and I moved to a new city approximately 2 years ago with the plan to stay for 5 years for a variety of reasons. It just so happens her 401k vesting hits 100% after 5 years so it made sense to max that out.  I started a new job a bit later after moving and am now coming up on 1 year of service which makes me eligible for the company 401k plan. With the goal of FIREing in 3 years does it make sense to max out (or even contribute to) my own 401k?

Obviously I would save a good bit on taxes, but I don't expect my side hustle to continue into FIRE so I would like to keep as much money invested in taxable accounts in case I need access.

My company matches 100% of the first 3% (of my base salary) or about $1,500. If I do indeed quit in 3 years I will only have vested 60% so although the match would be free money, I would be forfeiting almost half of their contributions.

Welcome to any thoughts or ideas that can help me make a decision!


  • Magnum Stache
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Re: FIRE in (Hopefully) 3 Years, Max 401k in Short-Term or No?
« Reply #1 on: April 23, 2018, 03:19:01 PM »
I think you need to look at two things:

*where is money coming from to support yourself the next 5-7 years.  The next few will be from your job, but after that where?  Even if you plan to do a Roth conversion ladder, what after the first 5 years FIRE?  You may (?) need money outside a 401k to support yourself.

*likely tax differential between now and when you're retired.  If you need to take money out of an IRA and pay 10% penalty on top of taxes does that make the decision clearer?