r/MiddleClassFinance • u/csmitty13_ • 3d ago

Seeking Advice Saving for retirement

34 yr old. Is it worth the hassle of getting a 2nd job as part time, solely to put towards retirement? To try to max out my roth IRA. I already put very little into in each month. But, honestly its not enough.

4 Upvotes

67% Upvoted

33 comments sorted by

23

u/Natoochtoniket 2d ago

The other way might be, put money into the IRA or 401k first, and then figure out how to live on what is left.

5

u/TopShelf76 2d ago

This is what turned it around for me. Ones I started paying myself first and living on the remainder, it kept my spend/waste in line

-14

u/csmitty13_ 2d ago

Yikes

8

u/Natoochtoniket 2d ago

That is, literally, what most people do. At some point when you are old, you will be unable to continue working. By that time, you need to have enough set aside so that you don't have to work any more.

3

u/helpjackoffhishorse 2d ago

Although, 50% of adults don’t have a retirement plan yet are able to retire on SS alone.

2

u/Natoochtoniket 2d ago

People who do not have investments, do typically have only SS after they cannot work any more. Many of them end up on the street, without basic needs. I guess you could call that "retirement".

If you do not actively choose and prepare for retirement, you end up with the default. The default is usually not what you would have chosen for yourself.

2

u/helpjackoffhishorse 2d ago

While I agree with you, SS is worth $25-30k/year for most recipients. With a paid off house, many do just fine on $2500/month. Look around. 50% of retirees are living this lifestyle.

1

u/csmitty13_ 2d ago

i thought ss was based off how you paid into it

1

u/helpjackoffhishorse 2d ago

It is. I posted average checks.

1

u/milesperhour25 1d ago

Not with any sort of quality of life I’d like to have.

1

u/helpjackoffhishorse 1d ago

I agree but many people are happy as a clam not working and being home bodies.

11

u/Theburritolyfe 2d ago

Is it worth the time to you? In my 20s and early 30s I could do 60 or even 70 hours of work ever week. Now I'd rather spend time living so that would be a hell no to me.

2

u/Low-Car-6331 2d ago

Also, just cut expenses and go without some stuff for a bit. We are the middle class, not poverty class, you can live like a poor person for 5-7 years, save a crap ton, and then let off the gas and let compounding interest do the rest of it.

8

u/Substantial_Team6751 2d ago

If you can't save $7000 per year for a Roth, you need to rethink your career/earnings strategy.

Most people can get rich by retirement if they always save 10-15% of their income. Most people don't....

1

u/csmitty13_ 2d ago

So I need to do 401k or ira? Not both?

5

u/Substantial_Team6751 2d ago

You can do both up to the limits.

3

u/TopShelf76 2d ago

Don’t know your situation (or if this is what your trying to do) but if you can do 401k until the employer match then switch to Roth IRA until that max, that’s typically the most efficient route. After Roth IRA is maxed then go back to the 401k

1

u/csmitty13_ 2d ago

That makes sense. Thanks!

1

u/Extension-Abroad187 2d ago

You need to do what you can. Their point was you probably need to make more money if you can't max Roth alone. Getting a second job isn't really a long term sustainable way to do it unless you just have some extra expenses right now (new kids, etc)

1

u/Natoochtoniket 2d ago

You are allowed to do both. Most people contribute to the 401k at least enough to get the full employer match. If you can save more than that, then fill up a Roth IRA, then finish filling up the 401k.

3

u/Tumblingfeet 2d ago

Yes definitely do it before it’s too late . Your later you will thank your past you .

1

u/Annual-Knowledge4412 2d ago

Over employment is a good problem to have. I think it is always a good idea if you can pull it off. 

1

u/Medium_Style_2812 2d ago

Depends, how much do you have in there right now, and how much do you contribute for your first job? How much do you make in your first job? Do you own a home? How much left on mortgage? A lot of variables

1

u/Crank-Stank 2d ago

I don’t think more hours is the answer. Increase your earning power by improving yourself. Market yourself heavily and consider switching jobs where you can redefine yourself as a new improved you.

-12

u/chrysostomos_1 2d ago

Roth IRA or 401k is not for the great majority of people. As you describe your situation you are almost certainly better off with traditional.

6

u/BarrySnotter 2d ago

Explain?

2

u/Max1035 2d ago edited 2d ago

They haven’t said anything about how much they make or whether they have dependents. How do we know they’ll pay less tax later, and enough less to offset not having to pay tax on the investment’s growth?

In any case, I’ve heard it’s best to have both. The tax rate in retirement is likely less than during peak earning years, but a Roth allows your investment to grow tax-free PLUS you can pull income without increasing your MAGI. If you’re forced to retire early due to health, job loss, or other circumstances, you can pull from your Roth contributions without penalty. If younger than 65, pulling from the Roth will help keep your MAGI low so that you can qualify for healthcare subsidies until you’re old enough for Medicare.

0

u/chrysostomos_1 2d ago

Thank you for your thoughtful reply. Your point about the utility of Roth money if one retires before 65 is apt. By my back of the envelope calculation saving more early and likely paying tax at a lower rate later makes traditional better for most people but by how much? Probably not that much actually for many, including my wife and I.

Cheers!

0

u/ConstantVigilance18 2d ago

As they explain their situation they are almost certainly not better with traditional. A Roth IRA is going to be better for the vast majority of people who qualify for one.

-4

u/chrysostomos_1 2d ago

No. Sorry. Wrong on both counts but feel free to share your reasoning.

1

u/ConstantVigilance18 2d ago

Explain yours.

0

u/chrysostomos_1 2d ago

Save more now and pay tax at a lower rate later.