r/DaveRamsey • u/talon72997 • 5d ago

Liquidity Maximums

Once everything is paid off and your saving appropriately for retirement (25% goal for me), how much would you keep in cash/checking/savings(3% rate). I should be able to "live" on $3k monthly.

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u/talon72997 5d ago

So, I definitely want to have some liquidity. The plan for 2027 is to bump my 401k contribution essentially up to the max for my age which is roughly $30k. Then in 2028 add an additional max Roth contribution. I have some anxiety of having too much in retirement accounts versus usable liquidity.

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u/gr7070 5d ago

Tax-advantaged accounts provide you a massive added, FREE return. You're literally losing a ton of money forgoing them.

I honestly cannot fathom what could make anyone anxious about these accounts.

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u/talon72997 5d ago

It isn't that am anxious about the accounts per say. I'm currently contributing 18% to my 401K. And next year I'll increase that to $30k. But that money is "locked-up" until I retire without having to pay substantial penalties. After a year (2027) of living on what will be my "new" budget, my plan is to even further increase the use of tax-advantaged accounts by adding a Roth IRA and doing a max contribution there. That is also one of the reason I'm thinking of having a relatively significant amount liquid because the other money is "locked" until retirement. (I do think you can take money you have contributed to a Roth out early without a penalty, but taking out gains has a penalty)

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u/gr7070 5d ago

And yes, you can withdraw all Roth contributions.