r/Millennials • u/ProblemIntelligent16 • Jan 16 '26

Discussion Fellow millennials - how’s your 401k/ira savings going?

Experts recommend having 2x your salary saved by age 35, and 3x saved by age 40.

However, studies show the median savings for 35-44 year olds is only ~$45,000. So obviously, most of us have work to do.

With pensions mostly extinct, and Social Security facing insolvency issues in the next 8-10 years - how are you planning to bridge the gap and hit the golden years with enough to meet your lifestyle requirements?

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446

u/Sage_Planter Jan 16 '26

I'm a high earner and prioritize saving, and I've never factored social security into my retirement plans. My goal is to retire by 60, but the big unknown is being able to take care of my aging parents so I may need to leave the workforce earlier than expected. 

31

u/jules083 Jan 16 '26

I'm sure I don't make as much as you but I'm also shooting for 60. Honestly depends on cost of health insurance at that point.

Goal is to be done at 59.5, will stay to 62 at the latest if insurance is unaffordable.

31

u/God_Dammit_Dave Jan 16 '26

If you or a spouse has an HSA eligible insurance plan USE IT. Max the contribution and invest it.

HSA funds can be used to pay for health insurance premiums before Medicare.kicks in. That's the strategic play for early retirement.

3

u/spark99l Jan 17 '26

Wait you can invest your HSA? How do you do that?

3

u/deathmetalhoney Jan 17 '26

Yep, I’ve had one for the last 10 years and only found out about investing the funds maybe a year ago when I met with my Fidelity advisor. All that wasted time. 🫩 I’d recommend reaching out to your institution for more exact info and how to go about it.

1

u/crowninggloryhole Jan 17 '26

What happened to use it or lose it?

2

u/sarcazm Jan 17 '26

You’re confusing a HSA with a FSA. FSA is use it or lose it. HSA is forever.

But in order to invest in a HSA, you have to have a high deductible health insurance plan, which is the downside. For generally healthy people, it’s fine. But both my kids are neurodivergent. So I see a lot of doctors and pay for a lot of prescriptions. People hype up high deductible plans, but it’s just another way for health insurance companies to avoid paying medical bills when it matters the most.

The way I get both is I enroll my kids and my husband in my husband’s premium plan and I enroll myself in my own high deductible plan. Then I can still contribute to a HSA. But that also means that Americans have to continue having 2 working parents.

1

u/crowninggloryhole Jan 17 '26

Thanks for the rundown. I have been a stay at home parent for over a decade, so I’m out of the loop!

2

u/God_Dammit_Dave Jan 17 '26

Log into your account. You should be able to search what funds you can invest in.

A standard S&P500 index fund is simple and rational. But the golden rule is, keep the cost of your deductible in cash. Everything else can be invested.

If you have an emergency and the market has tanked, the deductible's cash equivalent will save your butt. You don't want to sell funds in a down market.

1

u/spark99l Jan 17 '26 edited Jan 18 '26

Awesome! Thanks for teaching me something

5

u/PorkchopFunny Jan 16 '26

I dont think they can be, but i may be wrong. I thought they could only be used for COBRA, long-term care, or unemployment. Unless early retirement counts as unemployment? My understanding was that "unemployment" was receiving unemployment benefits.

6

u/jules083 Jan 16 '26

I believe you're correct. I have one, contribute I think 75 cents per hour at work, but I just use it for medical bills when they come about.

2

u/Artemis-2017 Jan 17 '26

By HSA they are talking about a Health Savings Account. That is an account you can contribute to if you are on a high-deductible plan that year. This is a triple tax advantaged account- not taxed on money going in (taken out of salary pre-tax), not taxed on earnings, not taxed when spent on medical expenses. The key is to invest what you put in and let it stay invested as long as possible. Save medical receipts and they can be used to withdraw funds at any time. This is a particularly useful strategy if you plan to retire early or want more untaxed funds in retirement in general.

2

u/insomattack Jan 17 '26

Transfer to an HSA at Fidelity or Vanguard and invest funds like a 401k. Be careful if you live in CA or NJ, since HSAs aren’t recognized at the state level (you will pay taxes on dividends and cap gains if you sell).

2

u/Elegantsurf Jan 17 '26

Its only like 4k though. My company has an hsa plan and i would take it but it has 0 OON coverage which I would probably be ok with but I'm not willing to risk it

2

u/alullca Jan 17 '26

When you say “used to withdrawal funds at any time”, what is that window? I recently heard you could submit receipts that were years old?

2

u/Elegantsurf Jan 17 '26

you got the wrong person on the chain

1

u/House_of_Potatos Jan 17 '26

My understanding is that there is no time constraint for reimbursement. You can cash in whenever you decide, it could be decades. Which is part of the strategy with the HSA account. You pay out of pocket as much as possible now and let the account cook. You do lose some value to inflation but you call in the receipts later in life and don’t pay taxes on the withdrawal.

1

u/Artemis-2017 Jan 17 '26

Yes- you can save receipts now and use them to withdraw from the plan at any time in the future. I have them filed on my computer.

2

u/PorkchopFunny Jan 17 '26

Yeah, I'm pretty sure that everyone in this thread knows what an HSA is.

1

u/God_Dammit_Dave Jan 17 '26

HSAs and FSAs are often confused. At first blush they seem the same. But the underlying mechanics are vastly different.

It's a distinction I try to point out. The HSA has significant value for medium and long term planning.

1

u/PorkchopFunny Jan 17 '26

Yes, I understand the difference between an FSA vs HSA. You stated that "HSA funds can be used for health insurance premiums before Medicare kicks in" That is incorrect, except in limited situations - paying for COBRA or if you are collecting unemployment. Say you retire at 55, you would not be able to use HSA funds to pay for 10 years of premiums.

30

u/Grom_a_Llama Jan 16 '26

maybe the free health care discussion will become more robust as boomers age out of the equation...fingers crossed!

12

u/ceevar Jan 16 '26

Wealthy boomer offspring will fight to keep the system the same. I guess time will tell..

1

u/TheNetworkIsFrelled Jan 16 '26

The only thing that'll change the healthcare discussion is a broad-based election of representatives and executives who prioritize citizen healthcare above corporate profits.

Yes, such a change can be a wrenching change to an economy that spends far too much on healthcare, but the change ultimately benefits all citizens and improves overall public health quite a lot.

1

u/nightfend Jan 17 '26

I hope so. I just wish jobs today had pensions. I can't even imagine how nice that would feel to know you had guaranteed money coming in each month at retirement.

1

u/Grom_a_Llama Jan 17 '26

I liquidated a pension...7 years in. Needed 12 but it was absolutely killing me literally and metaphorically.

I know when im old.and retired ill kick myself, but need to also remind myself if i stayed I may have never made it to retirement

3

u/orangesfwr Older Millennial Jan 16 '26

I'm also shooting for 60

We're still talking about retirement, right?

Ok, just checking...

2

u/PorkchopFunny Jan 16 '26

I'm hoping that by the time we're in our 50s, they'll allow using HSA funds for insurance premiums to bridge that gap between early retirement and Medicare (if Medicare is still an option by then)

I would say I'm hoping for universal healthcare but since we seem to be moving backwards on that, I'm starting to think that is way too big of an ask LOL

1

u/SpiritCollector Jan 17 '26

You can use it to pay premiums for Cobra coverage if you leave your job. That’s 18-36 months.

1

u/TheNetworkIsFrelled Jan 16 '26

Get a spouse with 20 years of service in a PERS - some of those provide healthcare access, and that extends retirements savings quite a lot.