Author Topic: Missing out on catch up contributions...  (Read 1987 times)

milesdividendmd

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Missing out on catch up contributions...
« on: April 30, 2014, 10:38:48 PM »
I've been writing a series of posts on my blog about the merits of pursuing early retirement.  (spoiler alert; I'm pro-FI)

My opponent in this ongoing "debate" is the awesome White Coat Investor.  Tonight I wrote the 5th installment in this 14 point series.  The subject was on whether or not missing out on "catch up" contributions to retirement accounts after age 50/55 is a problem.

the link can be found here:

[MOD EDIT: Link removed.  Please stop spamming links promoting your own site.  A single link in your signature is sufficient, and will be under every post you make.  Thanks.]

I'd love your mustachian feedback/thoughts on the topic.  (And I hope it is not poor form to share my link in this forum... I will remove it if it is)

Enjoy.

Alexi
« Last Edit: May 20, 2014, 09:05:35 PM by arebelspy »

Cyrano

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Re: Missing out on catch up contributions...
« Reply #1 on: May 03, 2014, 08:21:45 AM »
If you have "enough" (whatever that means for you) before age 50, what does it matter how thoroughly you beat a game you've already won?

Naked you came from your mother's womb, naked you shall return. You will leave this place, and after a time this place will remember you no more.

nereo

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Re: Missing out on catch up contributions...
« Reply #2 on: May 03, 2014, 08:48:35 AM »
Interesting post.  I suppose from my point of view, even someone who is 50+ and FI, the ability to save even more money in a tax-advantaged account is a good thing (for that person), mostly because that contribution could compound for decades before it is needed, and the difference between tax-free and taxed growth can be substantial over those kinds of time-frames.

Assuming that someone FIRE in their 50s had a side-hustle that allowed them to contribute to an IRA, why wouldn't they do it?

In your post you mentioned that "it's not really about the money".  Well - we are talking abotu money, which means it is about the money.  It might not be able to quest to amass the largest bank account, but it's just a fraction higher level of safety.

milesdividendmd

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Re: Missing out on catch up contributions...
« Reply #3 on: May 03, 2014, 02:57:32 PM »
Nereo,

Thanks for checking out the article.

I agree that if you're making money whether before or after Financial independence, it is always a good idea to preferentially max out tax deferred investment options.

In terms of the "it's not about the money"comment, there is an interesting paradox in there somewhere, I believe. On one hand it's about nothing but the money, Saving it, investing it, using it wisely.

But on the other hand it really is not about the money. It is about living a good life filled with meaning and happiness. And I wonder if there is not a bit of a trap for folks like us to become too obsessed with money? As in if you've won the game, and you're still playing it, is this Focus on money a counterproductive trap in and of itself?

There's a whole blog post in there somewhere. Stay tuned.

Alexi

milesdividendmd

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Re: Missing out on catch up contributions...
« Reply #4 on: May 05, 2014, 12:03:19 AM »
I just added a post on the question of whether or not "it" is "all about the money."

enjoy!

[MOD EDIT: Link removed.  Please stop spamming links promoting your own site.  A single link in your signature is sufficient, and will be under every post you make.  Thanks.]

-Alexi
« Last Edit: May 20, 2014, 09:05:49 PM by arebelspy »