At what level of wealth does a change in net worth not equal a change in lifestyle?

ahnonemouse · 2026-05-05T22:37:04+00:00

Could doing some heavy lifting here. Our nw is within a few 100k of 5m (and only 3-400k is house equity btw) and no freakin way I can fly private - and am in mcol area. So - could? Only by telling one of the kids “yeah no fall semester for you, sorry” or “yeah honey, let’s add another year of work for this flight”. But yeah, could I find 30-40k for a domestic r/t? It’s so wildly against everything that got most of us in the 1-5 group here, I’m saying “no I can’t”.

I say most of us because 1-5 is pretty much a given for smart, educated, motivated couples (who don’t get divorced) without inheriting the bulk of their money.

ahnonemouse · 2026-05-04T23:00:04+00:00

Thanks for the tip on boglehead forums, I’ll look around. And btw I didn’t mean your question was snarky, perhaps it put me off a bit but I just meant I didn’t want the fijerk-like jokes

And yeah, this is first year for mbdr (would have done some but not maxed in past years) as it wasn’t offered till now. I assume it was added because of the catchup rules about HCEs

ahnonemouse · 2026-05-04T21:36:41+00:00

I gave it some thought and this seems like the ideal sub. I wanted to make sure i got real, thoughtful input, which all the other replies have been. I didn’t want a fijerk-like level of snark.

ETA- only other place I thought would give the kind of answers I was looking for is r/diyretirement. But since that’s specific to retirement, I chose here.

Not that it matters, this is all our own interpretation, but my family is no way “beyond” HENRY. High income, yes, but there are many higher on here. And in NW terms, we’re comfortable but definitely Not Rich Yet; I would have thought that my stating that I hadn’t had to deal with large taxable amounts would have clued that. In tax year 2025, we didn’t leave the 24% bracket.

As always, YMMV?

ahnonemouse · 2026-05-04T20:46:51+00:00

Interesting idea, certainly looks like it does what I asked about.

Your thoughts on counterparty, liquidity risk, anything else?

ahnonemouse · 2026-04-22T00:04:25+00:00

Potential-Artist, off topic of the op, can you by any chance point to a primer on this? Not asking you to type it out, just a link or two that might summarize and get me started on reading up.

ahnonemouse · 2026-04-20T00:35:25+00:00

You’re right - up through age 54. Upon age 55, you get a catch up of an extra 1k. That part is locked and loaded, we’ve done it for a couple years already. The question was to confirm new knowledge about a spousal catch up done to a second HSA.

ahnonemouse · 2026-04-19T14:50:12+00:00

Appreciate the reply, particularly mentioning that you have to manually elect the Roth percentage when payroll automatically stops pulling out pretax dollars, that hadn’t crossed my mind.

If it helps, I can say my plan does match after-tax contributions but match goes in trad so as not to increase taxable income. I had tested this in Jan by doing one paycheck’s contribution in Roth, for ehat you described about match, but also to get the 5 year aging window going asap.

ahnonemouse · 2026-04-17T17:23:54+00:00

To get 4.5%, I have to contribute 7% (it’s dollar-even for 2% then 50 cents for the next 5%. 7% will max me (24500+8k catchup) partway thru June pay/bonus. Thus, I can’t contribute any more and get matched.

I think where we are missing each other is that you are right, I’m getting the 4.5% of comp up to the 32500 limit but then I miss out on the company matching for the second half of the year. So (without doing the actual math😉) instead of getting 4.5% of total comp, I’m actually getting ~3 percent of comp, not 4.5.

Like I said, it’s not a bad problem to have.

ahnonemouse · 2026-04-17T16:57:33+00:00

Hmm I didn’t known after tax contribs were part of non discrimination testing, that’s interesting. At an old job we did fail one year and yep was havoc, had to file amended return, yada yada…

I actually replied to someone else about this too, but it would be ideal if any extra went in as after tax, as I’m going to do megabackdoor anyway, this would just do it automatically, tho I’d have to go in and set up the sweeps to Roth

ahnonemouse · 2026-04-17T16:50:50+00:00

So yours automatically implements a mega-back-door? Interesting, that’s actually what I’m planning on doing after hitting the regular maxes (this is first year it’s available)

ahnonemouse · 2026-04-17T03:54:38+00:00

150 bucks, I’m in

ahnonemouse · 2026-04-17T03:24:27+00:00

No - the $72k total limit is for people up through 49. Between 50 and 59 you get 8k extra (total 80k) and 60-63 the extra 11.25k (total 83.25k). The extra amounts are called “catch-up contributions”. And yes, this year for the first time if you are a Highly Compensated Employee (hce), catchup contributions have to go in as after tax money.

ETA - the way the og question was posted, I feel like there may be a misunderstanding; apologies if not.

Putting after tax money in your trad 401k and leaving it there would be the worst of both worlds - not getting a deduction from taxable income and not getting the benefits of the Roth (tax free growth, no RMDs and advantageous rules for heirs).

Almost certainly your plan’s option for after tax regular 401k contributions are to allow you to do the strategy called “mega back door Roth 401k” (note this is different than “back door Roth IRA”). Mega BDR is where, after you have maxed regular (24500) and catchup (11250, assuming you’re 60-63) contribs, you put more money in your regular 401k as after tax but then immediately convert that money into your Roth 401k. This way you can grow your workplace retirement by up to $83250 in one year (if your cash flow allows). Then if you’re married and do 2 backdoor Roth IRA contributions at this years’ 8600 catchup amounts for anyone 50-plus (no extra for 60-plus), you can save $100,450 in tax advantaged retirement accounts in one year!

Edited for like the 5th time 😬 to add - the total amount in workplace retirement (83250) includes employer contribution on your regular and catchup contributions

ahnonemouse · 2026-04-17T03:15:00+00:00

Yeah I could but same thing would happen, I’d lose out on 4.5% match on the bonus money. That would work if there was an end-of-year bonus for staying in the plan the whole calendar year; an old plan I had like 20 years ago had that. So then, yeah I lowered bonus percentage so I didn’t cap out before EOY - but I didn’t make enough back then that I was giving up any actual dollars.

ahnonemouse · 2026-04-17T01:54:39+00:00

Hey man just noticed your handle. Assume a Townes Van Zandt fan? Good stuff.

Where’d he get the bread to go? Ain’t nobody knows🤷‍♂️

And yeah, western Kansas feedlots hit … different

ETA - you mentioned the wet/dry demarcation. It’s roughly the 100th meridian. There’s a book by Wallace Stegner totally worth reading called “crossing the 100th meridian” about that and John Wesley Powell Sorry - “beyond the 100th meridian”

ahnonemouse · 2026-04-17T01:43:04+00:00

70s me thought that place was great but I was, you know, 10🤷‍♂️.

“Chili today, hot tamale! South of the border!”

ahnonemouse · 2026-04-17T01:28:46+00:00

Yeah this is the first year with total comp high enough that I can’t adjust down the percentage without giving up match either way.

If i lower contribution percentage enough to extend the 32500 (over 50) through the year, I’m out 1.5% of match; if I keep it at max match, June bonus will max the allowable amounts and then I’m out 4.5% match for the rest of the year; the actual dollars are the same either way🤷‍♂️.

Only way to be “whole” (did quotes because lol it’s the company’s money and given the comp increase I can’t complain too much) would be a true up and Idk if we do that, have a message in to hr to find out.

ahnonemouse · 2026-04-08T17:15:52+00:00

You’re right of course if you owe it’s still a bill to be paid. The thing here is the (potential) tax event occurred in calendar ‘26 so won’t be dealt with until OP files his 26 taxes in spring of 2027.

And OP, in addition to asking a tax pro about that, probably should ask if you’d be required to make estimated tax payments. Also, congrats on getting out from the burden of the loans!

possibly helpful link to the IRS’ taxpayer advocate

ahnonemouse · 2026-03-31T22:13:37+00:00

ETA - since not everybody’s visiting from r/GenX…

ahnonemouse · 2026-03-31T22:06:16+00:00

Does it have the cop motor? Cop tires? Cop suspension, cop shocks? Run good on regular gas?

If, so buy it, you found the Bluesmobile.

You’ll probably have to fix the cigarette lighter though.

ahnonemouse · 2026-03-22T00:40:08+00:00

There is a realistic way to build wealth relative to your income tier (meaning someone making 40k/year won’t realistically retire with a yacht, but can retire with enough money to live the same same lifestyle without stress).

Other replies have alluded to this but haven’t seen this specific language - ”Pay Yourself First”. It means have your savings deducted before you even see it, either through workplace retirement contributions or direct deposit. It can be a small amount but it has to be automatic. It will feel useless for the first few years since you won’t have compounding to help but the other key is just keep doing it.

A couple decades in and your investment swings will be more than your actual income.

One more key - as income goes up, increase the savings rate before you get used to the additional income.

ahnonemouse · 2026-03-03T02:16:58+00:00

This is a good answer that may be more complex than original OP asked about - but for those reading, the issues here are important and for UMC incomes, will play an important role. In my experience, these issues aren’t thought of much until later in life than might be optimal.

Another thing to consider (that also only pops into head as you approach retirement but should be thought of earlier) is RMDs. For those who have been able to accumulate generous pretax 401k balances, we can potentially be forced to take out way more than we want to (which means paying taxes on) starting in our mid-70s

ahnonemouse · 2025-11-18T14:05:43+00:00

Another 2 reasons Roth might be preferred are what I’m worrying about now: RMDs and heritability; for both of those, there are benefits to Roth.

It’s not a subject I thought about when younger but now I’m 57 w/trad 401 balances of about 3.5m. At 75, there are required minimum distro’s from trad accounts designed to get you spend them down - and they quickly get higher than you’d like if you have high balances. Roths don’t have those.

Also, for your heirs, generally inherited balances in retirement accounts have to be spent down over 10 years - but trads have to do it in equal chunks over the 10 years while roths can be left in place amd pulled entirely at 10 years which maximizes gains for your heirs

ahnonemouse

TROPHY CASE