Am I contributing Too Much to My 401(k)?

Are You Saving Too Much in Your 401(k)?

Rethinking retirement contributions while trail running on the Wasatch Crest in Utah

While out hiking and trail running on Scott Hill along the Wasatch Crest in Utah, I recorded a quick video on a surprising retirement savings question. Watch the video here.

I’m standing right on the Wasatch Crest, we are overlooking somewhere between the Canyons and Park City Ski Resort. Over on this side there’s Jupiter Hill overlooking Park City. Behind me is Solitude Ski Resort and Big Cottonwood Canyon.So I’m enjoying a beautiful day up here and I want to talk to you about another question you might not be asking yourself… But it’s one you should consider.And that is: Am I saving too much money in my 401(k)?

Why This Question Matters

Now, I know that sounds a little counterintuitive. But there are a couple of things to keep in mind here.

First off—if your company is matching any of your contributions to the 401(k), that’s a no-brainer. Almost anyone is going to want to save money there and get that match.

But beyond that match, there are a few other things you should ask yourself.

Pre-Tax vs. Roth Contributions

Does it make sense to be saving on taxes right now—putting money in on a pre-tax basis and getting the tax savings now? Or does it make more sense to pay the taxes now and avoid them in the future?

That could mean using the Roth section of your 401(k) if you have that option… Or using a Roth IRA.

Flexibility Outside Retirement Accounts

In some cases, it might make sense to save money outside of your 401(k). You may need access to funds before retirement. Maybe you’re building your emergency fund. Maybe you’re buying a house. Maybe you're planning a big move. You might need to dial down your retirement savings for a little while.

Don't Miss Out on Life Today

And another thing to keep in mind as wellt:Every now and then I meet people who are overemphasizing the future at the cost of the present.

Maybe they’re so focused on avoiding financial struggles in the future… That they sacrifice living their best life right now.

They save everything they have. They don’t actually do things now that they’d enjoy that would lead to a fulfilling life.

You want to strike a balance between all those pieces.

Final Thoughts

So, definitely—don’t take away the message that you shouldn’t be saving for retirement. That’s not what I’m saying. But do recognize that there are other factors to think about. And you want to look at everything in your life when you’re deciding where and how to save.

Thanks for being here with me.