Should my husband stop saving in 401k if I am FIRE?

[Fru-Gal]

I've always been the breadwinner and am responsible for paying most things in our family.

In a convo last night I was explaining to partner this strange new stage we're about to start next month, of spending the stache rather than saving. He doesn't make much money so the 401k decimates his paycheck -- to his credit, he did save 80% of his check in the first 6 months of the job trying to max the 401k. This year he hasn't saved as much. He has excellent credit. I'm trying to accept that he'll maintain/pay down his credit card and that isn't my problem (we have always had separate finances). But he could throw more at his balance (around $3k -- he won't let me pay it off for him due to ego) if he was not putting more than the company match in his 401k. I guess answering my own question, he shouldn't miss out on the free money of the company match.

My FIRE date: 1/1/22, age 51
His FIRE date: next 5-7 years, he is currently 54

[Metalcat]

There are too many factors that you haven't shared to give you any meaningful answers.

It sounds like you keep your finances separate, but you're supporting him, but you don't have pooled resources?

[ixtap]

That really depends on your tax situation and withdrawal plan. But yes, the company match is an important piece of that equation. Does he have an option for Roth?

[terran]

How do you have separate finances if almost all of his paycheck goes into his 401(k)? What does he live on?

Ignoring that, for me (coming from a shared finances marriage perspective) this would depend on how much you have in taxable and if you have enough accessible money to get a Roth conversion ladder going. If you have enough in taxable and Roth contributions to get a conversion ladder going without his income then I would have him contribute the max to his 401(k) and withdraw from taxable to make up for the lost salary. This is effectively transferring taxable to tax advantaged. If he has a Roth option then you might consider that, if not then you might consider making larger Roth conversions because of the lower income. You'll have to decide if there's a way you can make that work with how you arrange your finances. 

[Fru-Gal]

Oh that is a really cool idea, transferring taxable to tax advantaged. However it likely won't work due to his psychology (emotion vs math). I shouldn't have said separate finances, what I meant was separate (no shared) accounts.

The context I was trying to provide is that our FIRE finances do not depend on his income/savings.

[terran]

So if he's emotion driven, will he just trust you on the math? If you said something like "hey husband, we've got plenty in our taxable account, and I'd like to get more in our tax advantaged accounts, but since I won't be working any more I'm not allowed to contribute to a 401(k), so can you keep filling yours and we'll live off our savings to do that?" would he go for it?

Another idea: You can also both contribute to IRAs based on his income. The limit will be $12k + $1k/person catchup if you're over 50 or box 1 of his W2, whichever is less. If him maxing out his 401(k) would drop his W2 income below $12-14k then that would be another reason to have him contribute to Roth 401(k) if available since that doesn't reduce W2 income, so you can basically double contribute. Or, "worst" case, even if he doesn't want to contribute to his 401(k) you could contribute to your IRA and maybe he would be willing to contribute to his IRA since it would be a more direct transfer from taxable to IRA without feeling like his salary was $0.

Something you might not be familiar with if your income has been high until now is the Saver's Tax Credit. It won't work if you withdraw from your IRAs, but if you're living off of taxable and your AGI is low enough it would.

[DeniseNJ]

Definitely contribute up to the match, then toss every other dime to the cc balance.

https://www.mrmoneymustache.com/2012/04/18/news-flash-your-debt-is-an-emergency/

[Fru-Gal]

Thanks!