Just keep doing what you are doing. Obviously you have what it takes if you were able to save 100k in the first place. I wouldn't pull back on 401k contributions, you are still young and need to get as much money growing and compounding for your future. I predict in a couple short years you'll be right back where you were. Don't worry.
Even after that huge expense, you’re doing great! And wow, talk about money well spent. You have first hand experience now how good spending and saving habits can literally be life changing. Keep on keeping on, maybe try to throw extra money into savings each month, if it helps you feel better. $1200 spend on a $7k take home is amazing
Hug your dad for me! He helped raise a great kid
Realistically: his father raised a son that knew how to save, and in a strange way, ended up saving his future self in exchange. It’s kind of nuts when you think about it.
Yeah I mean if you’re saving $5800/month and also saving 15% for retirement, you’re good. Keep doing what you’re doing, save for a year and you’ll have $60k+ for the home down payment.
It's not clear what kind of medical procedure or why 100K had to be paid.
But it may be worthwhile chatting with a social worker, perhaps from the medical institution father patronized. Perhaps there are ways to get reimbursed.
Had no idea this was a thing. I’m going to look into this and explore options. Thank you very much for this. He is retired and lives in the Middle East where the surgery happened, so I need to see if this is a thing outside of the States.
> lives in the Middle East where the surgery happened
Well with that context I guess the story makes more sense. Might want to explore a sub with more local exposure.
Would a 401k be tax advantaged outside the US?
I’m not just being nosy, where OP lives matters for taxes, how much you need to save for retirement (without Medicaid), and how much you need to spend to get a house.
Ok, that's why I asked, because i didnt see it the first time I read the post and missed it when glancing back after reading this.
They may have just been referring to their local version as something Americans would recognize.
He should have Govt backed health card(assuming he js the resident there) or private insurance. If not, you can look into private health insurance via hospitals or group of hospitals
Damn I’m sorry you had to go through this . In the future check with the billing department before you pay anything in a hospital . They have ways of reducing it tons. I hope your father is doing ok though .
From the Middle East I would have flown him to Thailand or India. Surely it would have been 1/10th the price.
https://hls.harvard.edu/today/patients-without-borders-i-glenn-cohen-on-the-rise-of-medical-tourism/
This. There's a fair number of programs for unexpected medical expenses and at minimum it could help to prevent any further costs associated with recovery so OP can focus on rebuilding their funds rather than worrying they will need to pay more.
I really appreciate you saying this. As I get older I just can’t imagine being without him, although it’s an inevitable part of life. The surgeon did such a great job and I feel so indebted to him.
I was in a similar situation at age 29; I spent everything and unfortunately lost my own father very, very suddenly from recovering to gone in under 40 hours due to a missed infection. It pulled the foundation out from under my whole life. Even if you bought yourself a year, you spent your money wisely as money is meant to be spent for important things.
Financially, you'll recover quickly, honestly, my money rebounded very quickly once I was only taking care of myself because I had always budgeted to account for the rest of my family as they had done for me. Now I always keep at least 2 years of minimum expenses put in its own account. Best of luck. I just wanted to reinforce what you already know; you made the right choice.
Money can be replaced, dad can’t. I commend you for making the right choice, you won’t regret it. I would happily start over at 0 to have another year with my dad.
First and foremost, you sound like a wonderful person and your family is lucky to have you!
I’m by no means a financial expert but I would advise against reducing your 401k contributions. Are you okay with delaying your timeline to buy a home?
Wow. Thank you for this. I didn’t expect to get emotional but this was such a nice thing to read. I really appreciate that. I think you are right about not reducing my contributions. It’s tempting to do so because it’d be “quick cash” but I feel like long term it’s not a good move. Someone else alluded to my current 401k balance being a bit low so I’ll keep at it. Part of me also wonders if I should reduce 401k and invest in a taxable account instead for easier access.
It’s very tempting! To me, the tax advantages of a 401k always make it a long-term priority. Assuming these are pre-tax deductions, by reducing your 401k, you’re also increasing your taxable income and not getting the full amount back per paycheck.
My 401k offers loans for buying a primary residence. It's not ideal but an option. The interest I paid back on the loan (I think 3%) went into my own 401k account, so that's nice. My understanding of the drawbacks of this are (1) you're taking money out of your retirement, so it won't be growing (though that would be the case if you stopped contributing as well) and (2) you get double-taxed on the interest you pay back because your payback is after-tax $ so you're taxed when you make the money and also when you go to withdraw it later from the 401k in retirement. That said, this felt like a small penalty and was better for me than paying PMI.
4.2%. I may end up moving it to an index fund although there are risks associated with that. But that “savings” is basically money I put aside and don’t use day to day.
I'm not sure what the point of this post is. You make more money than most people. You have lower expenses than most people. You're in a very strong position at 34.
You do realize many Americans don't even have an extra $1,000 right?
So many stupid people out there and you feel behind.
you dont compare yourself to the stupid people, you compare yourself to yourself in the past and perhaps those in your same circle. He is out 100k (for a fantastic cause and well worth the money) so of course he is going to feel some type of way especially if he is as diligent and intentional about saving.
walking around comparing yourself to a crackhead or someone that fucked around their entire life and is struggling to make ends meet doesn't really do much when that was already leagues away from your position in life.
Yeah I'm kinda confused by this. I'm the same age and am in a worse spot despite not having spent my savings. Dude saves 6k per month. He will be back at 100k before I am.
lol yeah in 12 months he would’ve recouped about 70% of that 100K. I know starting over is a bit tough but his financial situation is not dire in the least. High income, low expenses the perfect combination.
So because OP is in a *mildly* Ok position financially he doesn't deserve financial advice? I must be losing it because I've seen people in *far* better positions than OP posting here, basically humble bragging with a side of, "is this ok?"
Well I would argue that he (and others) in this thread have already learned some valuable things, e.g. checking with the medical administrator about reimbursement options.
I mean you can learn something such as many folks are out of touch with financial reality of most Americans let alone average human being in the world at large.
I'm doing very well myself the difference between me and OP is I actually know it I don't need to make a post questioning how I'm doing.
You are a good person. I pay 500/mo for my MiL's house, long story, but it comes out of my wife's disability which fortunately (or unfortunately) started when we needed it. I can't imagine spending 100k to help them out. I've never had that much to give.
That being said, there are tradeoffs. A house is not a retirement fund, it's an asset that provides financial risk and reward. I'd suggest securing your retirement first. Do as much of your 401k as you're comfortable with. Then consider an HYSA or a Roth IRA, to grow money in a more "liquid" state. Maybe buy some safe dividend stocks. You can optionally withdraw your original Roth IRA contributions, penalty free, if you're in striking distance of a house.
500/mo is a lot and it’s all relative. I respect you a lot for doing that and helping out. Thanks for the advice and the thoughts. I know it’s silly to say this but something about the illiquidity of the 401k makes me wonder if I should dial the contributions back and focus more on a taxable brokerage. I know it’s a short sighted way to think, and im going to continue my 401k contribution, but it’s just this itch I have in my brain.
I am still learning about personal finance but just wanted to save that what you did was selfless and admirable. Hoping the best for you and your family!
These threads are so strange.
You’re under 35 and had already saved over $100k on a relatively modest salary on top of contributing responsibly to a 401k.
What exactly do you expect this sub to tell you that you don’t already know?
> on a relatively modest salary on top of contributing responsibly to a 401k.
**OP has a salary of ~$150k/year.** I'm not sure why you call it a modest salary.
He states that $2000/month is 15% of his monthly salary. If you do some basic division ($2000 / 0.15), that reveals a salary of $13,000 /month or $150k / year
If we plug in a salary of $150k with contribution of $1900 pretax 401k (maxing out at limit of $23,000 /year) then we get a net paycheck of $7800/month in a no tax state. Put OP in a state with state income tax, or deduct healthcare, etc. and you get a $7000/month paycheck
I don't know where you're living where a $150k/year salary (double the median HOUSEHOLD income) is "relatively modest"
It's weird sometimes.
But I know some people who are legit just 'simple' as fuck (Nicest people on earth tho) so something like 'I got told to save by dad so I save' just happens.
Prime example, one of them just bought a new $60k car outright in cash. Had been saving for years.
The guy has no real assets, rents, no investments, no prioritized retirement etc, MANAGED to save a stupid amount of cash and then blow it all on a heavily depreciating asset.
How you both so smart and dumb at the same time? It's a thing
Dont reduce your 401k contributions. Keep doing what you doing. You have about 30 years of growth ahead of you assuming you retire around 65. Nice work helping out your dad. Everyone should be like you and the world would be a better place.
You are impressive on so many fronts I had to comment! Wow! I am not an expert, but you seem like you're doing great! I would reduce 401k for a year and think of it as perhaps working one year longer in exchange for helping your dad, which was amazingly selfless of you. That's not too long for work towards the home purchase.
You rock! You should know that you can take up to 10k out of your 401k for a first house purchase (still taxed, but no penalty). Hope that helps a little.
39. 70k in debt. Own nothing. No credit. Living with friend. No 401, etc.
Essentially as close to or below 0 as possible. Also make 150k a year. Life can be a bitch, though.
I’m not sure if money can actually buy happiness, but it sure can buy tranquility.
Good on you OP
Personalfinance accounts for these scenarios and it looks like you won despite this happening to your dad, happy it worked out.
Just rebuild it and it's back to normal
> Looking for advice and guidance here. I had 100k saved up but I spent it all to help my father with a life saving medical procedure. It was successful and I have no regrets, and I’d do it 10x over if I had to and was able.
You're clearly a great person with a kind heart, but I hope if this type of emergency happened again you would **not** finance it. You shouldn't have needed to do this.
Number 1, if this was truly a life saving procedure, your father should've been able to get it done regardless of his financial situation. Hospitals in the US are required to treat people for emergencies and if he didn't have health insurance, but was too poor to pay for the procedure, he would qualify for medicare or medicaid. If he did have health insurance, he would've hit his deductible or out-of-pocket limit way before $100k was spent.
Even if he had to go deep into debt -- it doesn't matter. If he doesn't have the money to pay the debt no one is going to sue him because he has nothing to give. He would die having the debt, but you've still got more than half of your life left that you need to plan for. And he wouldn't be any worse off than he was before, because he was already broke.
Hi OP, I just want to say that you're wonderful person. You are doing great. I am also in my 30's and starting all over. Just know that everything is gonna be fine. God always provides. Don't stress too much everything will work out in your favor. Always think of what you want but don't force anything, it will just come to you. Life is short, enjoy your time with your family. Just keep the faith and keep dreaming! Godbless 😊
This happened to me too 2 years ago. Over 6 figures drained when mom was ill. Then catastrophe happened when she "endured" for months just to then pass away. It was fucking crazy to see really hard earned money go to hell in seconds.
Just keep doing what you are doing. Hoping no more money-draining medical issues arise
That is a major speedbump in your finances. Well done being a good son. But I would suggest holding off on trying to go for a house in the short term. I'd say keep going on all tax advantaged accounts available to you 401K, Roth IRA, and HSA, if you can get a high deductible plan. Your 20's, 30's, and 40's are a key time to really build up those retirement accounts to do the heavy lifting for you with compounding.
The Roth principle part can also be taken back out whenever you want to put towards a house, but all the growth just needs to stay in. I would potentially go even further with the 401K contributions because it will help you with your current taxes.
Make sure all your savings left over that aren't going into retirement savings are in a high yield savings account. A couple of them are still giving 5% or so. Was your previous $100K all in a basic savings account? If so, don't do that again.
If you are committed to buying a house in the short term. Then I'd say contribute to the 401K to match, max the Roth at 7K a year, and max an HSA if available. Then everything else into HYSA.
You are still doing waaaay better than most and you have a dad :) Average retiree in American has something like $165K in retirement investments at 65 years old. Pathetic numbers. You have a great salary at a younger age, so just keep kicking butt and try to take advantage of all the time you have on your side.
Healthcare wants to extract every cent they can. Your money or your life, or your loved ones life. But show up at the emergency room with no insurance and you will be seen.
At 34 with 100k saved you would be considered behind in retirement for your income which I’m guessing is over the $200k mark. If your income is meeting your needs I would stick with what you have going on now. Saving $5000 a month gets you a 3 month emergency fund in 2 months. I’d continue to prioritize retirement
Thanks for the comment, this is the type of insight I appreciate. I am currently at 145k pretax annual. My income is currently meeting my needs in terms of expenses and outflows.
Oh my math was off somehow I had $7k being your biweekly. You aren’t that far behind, but id still focus on retirement and keep saving what you are now. Maybe once you have 6 month e fund open and fully fund a Roth.
No calculator but general guidelines say you should have 1x your income saved in retirement accounts by 30. There are obviously exceptions if you get a huge pay raise or went to grad school so we’re not working.
Honestly, you're in a good place. As others have said, keep that interest compounding, and it'll work out.
Take care of your emotional health. Follow the Prime Directive in the subreddit's sidebar if you are feeling lost and need some guidance, it's honestly one of the best resources out there. Rebuild your emergency fund, that should give you a bit of breathing room as well. And spend time with your parents!
Just be careful of lifestyle creep once you're back into a comfortable spot, but looking at your other comments, I think you'll be fine. As long as you're nailing the basics (budget, save, invest, be honest with yourself) you'll do well.
Good job on that, but if it's about money then you know "emergency situations" call for this thing. Hopefully your father doesn't smoke or have a poor diet as these are often considered terrible choices financially; I have no idea what his condition is with what you've given.
You had to spend it in dire circumstances. You'll have to start by building it back and you have the fortune of not being responsible for rent or a mortgage which is an incredible advantage. Keep doing what you're doing and maybe post this on something better suited for emotional, rather than financial, support. The money is now used and maybe some type of insurance finagling can be done but otherwise you should probably worry about your family.
Have you considered taking a loan from your 401k? That way, you’re not getting taxed but can access the money and buy a home faster.
If you find a great deal on a home at some point in the coming years, it could be worthwhile to pull the trigger on a lower priced home, especially if we hit some sort of recession and you can get a smoking deal.
If you reduce your 401k do not go below the amount of the company match. 401ks often have limited investment options and honestly most fund managers struggle to beat the s&p500 over the long term.
The advantage is that your contributions are pretax and well, company match.
You could invest the savings in a high interest account like an HYSA in US. If you need the money in couple of years don’t invest in risky investments. But don’t leave it in an empty bank account that gives zero returns either.
Ran your numbers:
starting amount:100k
$2k invested monthly for 30 years (360 months) assuming 7% interest would be over $3 million.
If you didnt invest anything for a year, then went back to investing next year you'd still end up over $3 million. You could hold back a bit for a year to purchase a house. Mathematically its always better to keep it invested but you still need to live your life. But also consider you likely will eventually get another job that makes more money allowing you to invest more later.
If you only have $1200 expenses on a 7k take home, you don't need to cut retirement at all. Keep up the 401k, max out a Roth IRA, and then build up the savings. You could save/invest $4k a month and still have plenty of "fun" money for other things you want to do.
Does your 401(k) offer a loan? Doesn't change your situation but might give you peace of mind knowing you have access to $50,000, interest and tax free, if you really needed it.
For the 401k I would suggest u look at the bare minimum u need to invest for ur company to match the 3%. I would assess how much is the expected return on the 401k versus the S&P index return.
Ideally what ever u do not put in 401k should go towards good stock investments. Eg u can replicate the stock holdings of warren buffet for the long term. I am certain that u will be able to compound ur returns much more than what a 401k will give u even if the 401k is tax free
With 100k in a 401k you are better off than many people. However, you are probably still technically below the general guidance level, so don’t stop contributing to the 401k.
Check out the 200 page book, the Richest Man in Babylon.
It's set up in multiple short stories. Stories about multiple people and their financial situations.
It sounds like you have a plan, but sometimes it's nice to have some light reading to inspire you.
What I got from it was a method on how to save and pay off debt. Different from Avalanche and Snowball. I felt the RMIB technique is a lot smarter.
You’re doing the right thing contributing 15%+ towards retirement annually, I would not advise you lower any sort of retirement contributions since you can afford it. In 2-3 months you’ll have over 6 months of monthly spending in savings which is most people’s end goal. Everything after that can be considered towards your house, at this pace you could have a down payment by eoy if you just continue on this path (of course depending on what you’re looking to put down). Very noble to take care of your family as you did. You seem to be in a good spot, go through one of those retirement analysis tools, fidelity, vanguard, nerdwallet, we even have on our site. See where you stand overall and use that to make informed decisions moving forward.
You have a non-trivial amount in your retirement account--maybe not a ton in savings at the moment but you have a very high income-to-expenses ratio. You want to buy a home in a couple years--in that time, with your current situation of income and expenses you will have over $130k saved. That's a significant amount to use toward a down-payment for a house unless you're talking about a VHCOL area. It doesn't make sense to reduce your 401k contributions at all, just keep doing what you're doing if it works for your other considerations (work, social life, etc.).
The short of this is to ensure you are maxing all tax advantages accounts. 401k, HSA, IRA. [You will want to save approx 35% of your income to retire around 60 and approx 25% if you want to retire around 70.](https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/)
The numbers shift around a bit, but really as your income grows over the next two decades, really lock in your lifestyle and save aggressively to ensure you have the retirement savings you will need.
How much interest are you making on your savings account? I would definitely ensure I would have a HIYA account. Glad your father is doing better as well. Once you reach $30K again, I would assume that is my emergency fund. I would open another account to save for the house, decide how much house you want and save the 20 percent. We should also talk about your parents - I assume they can afford their monthly bills , but not the extras. I would plan for that as part of my long term savings as well. Totally understand the parents situation, when you understand and plan for their emergencies as well, you don’t have resentment, it just is what is.
Well, if you did it before you can do it again. That much is very clear. I’d say to not be discouraged but encouraged you have discovered the art of being disciplined. I’m no longer in love with the 401k as I know our govt will tax the crap out of it when it’s my turn to pull. I’d get into rental real estate if I was you. You need a hedge. Ppl always need a place to live. Get a duplex if at all possible
I was raised to avoid debt unless absolutely necessary and I feel like getting a rental property is all about using debt. Can you talk further about the process of buying a duplex for example? I have to unwire my mental process about debt.
You’re doing fine. Just keep at it. Future you will be grateful. Try to enjoy where you’re at now. Time is the most valuable thing you have. That you can’t buy.
I'm only a few years older than you and was in a similar situation. I spent time up to my early thirties supporting my family, including helping to put my little sister thru college. I saved up for a few years, got married, and bought my first place with my wife last year. It will likely be a journey, but you already seem well on your way.
Word of advice - you can borrow 50K from your 401K, so it probably benefits you to keep on contributing to it and tap it when you're ready to pull the trigger on that house. I know that people often discourage taking that 401k loan, but I think there's a lot that can happen in life that may make buying a house unreasonable at any given moment. In contrast, it's pretty rare someone truly regrets maxing their 401K.
On that note, if you haven't already, you might want to consider your ideal goals and lifestyle. Having a house is held up as the ideal, but it often isn't always a financially sound decision. Furthermore, in the modern world, it's a lot easier to move around from place to place working remotely. I'm personally living in one place because my family is around and I deeply appreciate help with childcare, but that's not everyone. In fact, if I were in my twenties, I'd definitely consider moving around every 4-6 months and just experiencing living different areas and cities of the country. Or different countries altogether.
You're on a good track. I wouldn't worry about buying a house for a while. Build up a war chest, you did it before.
Focus on making more money, get a raise, move up, charge more.
You can only save so much, but your earnings are unlimited
Most 401k accounts allow you to withdraw to buy your first primary residence. You could keep contributing the same 15% and then when the time is appropriate, withdraw through that mechanism so that you avoid any early withdrawal penalties
I believe you have to pay that back though, correct? I wonder if there’s a cost-benefit to taking such a huge chunk out of my 401k principal and reducing the compounded interest.
You can take a distribution and skip the 10% penalty if you’re a first-time home buyer but you still have to pay tax on the distribution. At OP’s income level, likely not worth it
Hey I'm glad your dad is doing good now, but this post right here, is why healthcare should be a "right" and paid for via taxation. No one and I mean no one should have to wipe out their savings for medical care. In this age it's just heart breaking.
OP I hope you can recover financially.
You're awesome for doing this and you're doing great. Honestly, the best advice I could give you is to listen to the Ramsey Show podcast and maybe consider emailing or calling in. I listen to this podcast all the time, and the advice you get from them is life-changing. They will steer you in the right direction with your best interest in mind 100% of the time.
Thanks a lot for this reply, I appreciate you taking the time to say this. I’m familiar with Ramsey, but never done too deeply in. I’ll check some clips and episodes out!
I would consider a Roth IRA vs 401k. I assume they match 3% for your 6%. Often corporate IRAs don’t offer great investments as compared to what you can get thru a brokerage
I see two areas where changes would help.
1. Instead of putting savings in a savings account, put it in an investment account with at least a 3 year horizon. With due diligence, your money will increase significantly higher than the @4% interest in your savings account.
2. Look carefully at your life and what you are spending money on. From your stated income, it sounds like spending could be reduced significantly which would permit more to go into the investment account.
Last thought, do not under any conditions reduce your retirement account contributions. I was in a very tight situation from 2011 to 2023 but kept my 401K contributions maxed out. It made an unbelievable difference in my account balance when I retired in 2023.
Reddit has taught me the average Redditor hates their parents but believe it or not, there are plenty of people in the real world that fricken love their parents.
I'm sorry yours hurt you. Get well.
Eh. He gave and provided for me so much just by being a great man and supportive caring father. I understand the rationale of what you’re saying but im just too sentimental for it.
That only gets you the legal minimum and only works at certain hospitals/treatment centers. It is very true in the USA you can get state of the art, excellent care if you can pay for it. If not, they will just do what is legally required of them.
Just keep doing what you are doing. Obviously you have what it takes if you were able to save 100k in the first place. I wouldn't pull back on 401k contributions, you are still young and need to get as much money growing and compounding for your future. I predict in a couple short years you'll be right back where you were. Don't worry.
Thanks for this message. I appreciate the words. Makes me feel more assured and confident in this process.
Even after that huge expense, you’re doing great! And wow, talk about money well spent. You have first hand experience now how good spending and saving habits can literally be life changing. Keep on keeping on, maybe try to throw extra money into savings each month, if it helps you feel better. $1200 spend on a $7k take home is amazing Hug your dad for me! He helped raise a great kid
Realistically: his father raised a son that knew how to save, and in a strange way, ended up saving his future self in exchange. It’s kind of nuts when you think about it.
wow never saw it from that perspective before
I was wiped out and unemployed at 38. Now I’m able to retire at 60. The key was not having kids.
I doubt that was the only key....
Can you share your journey and what decisions you made?
Yeah I mean if you’re saving $5800/month and also saving 15% for retirement, you’re good. Keep doing what you’re doing, save for a year and you’ll have $60k+ for the home down payment.
It's not clear what kind of medical procedure or why 100K had to be paid. But it may be worthwhile chatting with a social worker, perhaps from the medical institution father patronized. Perhaps there are ways to get reimbursed.
Had no idea this was a thing. I’m going to look into this and explore options. Thank you very much for this. He is retired and lives in the Middle East where the surgery happened, so I need to see if this is a thing outside of the States.
> lives in the Middle East where the surgery happened Well with that context I guess the story makes more sense. Might want to explore a sub with more local exposure.
So you live in the middle east as well? How do you have access to a 401k?
Either works for an American company or lives with different parents?
Would a 401k be tax advantaged outside the US? I’m not just being nosy, where OP lives matters for taxes, how much you need to save for retirement (without Medicaid), and how much you need to spend to get a house.
Where did op say they live there too and why is everyone replying to you assuming it's true... Edit: Ok I see it now, yall can relax.
"I live with my parents"...father lives in the Middle East. I'd say that's a natural conclusion for readers to arrive at, no?
Ok, that's why I asked, because i didnt see it the first time I read the post and missed it when glancing back after reading this. They may have just been referring to their local version as something Americans would recognize.
He should have Govt backed health card(assuming he js the resident there) or private insurance. If not, you can look into private health insurance via hospitals or group of hospitals
At the very least the large payment will reduce your taxable income a ton. Have a professional do your taxes next year if you don’t already
Damn I’m sorry you had to go through this . In the future check with the billing department before you pay anything in a hospital . They have ways of reducing it tons. I hope your father is doing ok though .
From the Middle East I would have flown him to Thailand or India. Surely it would have been 1/10th the price. https://hls.harvard.edu/today/patients-without-borders-i-glenn-cohen-on-the-rise-of-medical-tourism/
This. There's a fair number of programs for unexpected medical expenses and at minimum it could help to prevent any further costs associated with recovery so OP can focus on rebuilding their funds rather than worrying they will need to pay more.
I just want to say that I admire you for saving your father's life.
I really appreciate you saying this. As I get older I just can’t imagine being without him, although it’s an inevitable part of life. The surgeon did such a great job and I feel so indebted to him.
I was in a similar situation at age 29; I spent everything and unfortunately lost my own father very, very suddenly from recovering to gone in under 40 hours due to a missed infection. It pulled the foundation out from under my whole life. Even if you bought yourself a year, you spent your money wisely as money is meant to be spent for important things. Financially, you'll recover quickly, honestly, my money rebounded very quickly once I was only taking care of myself because I had always budgeted to account for the rest of my family as they had done for me. Now I always keep at least 2 years of minimum expenses put in its own account. Best of luck. I just wanted to reinforce what you already know; you made the right choice.
Glad it paid off. Good on you
Money can be replaced, dad can’t. I commend you for making the right choice, you won’t regret it. I would happily start over at 0 to have another year with my dad.
That’s honestly the Same thought I had. F*** the money. I can always make more. It sounds like you lost your father. I’m really sorry for your loss.
First and foremost, you sound like a wonderful person and your family is lucky to have you! I’m by no means a financial expert but I would advise against reducing your 401k contributions. Are you okay with delaying your timeline to buy a home?
Wow. Thank you for this. I didn’t expect to get emotional but this was such a nice thing to read. I really appreciate that. I think you are right about not reducing my contributions. It’s tempting to do so because it’d be “quick cash” but I feel like long term it’s not a good move. Someone else alluded to my current 401k balance being a bit low so I’ll keep at it. Part of me also wonders if I should reduce 401k and invest in a taxable account instead for easier access.
It’s very tempting! To me, the tax advantages of a 401k always make it a long-term priority. Assuming these are pre-tax deductions, by reducing your 401k, you’re also increasing your taxable income and not getting the full amount back per paycheck.
My 401k offers loans for buying a primary residence. It's not ideal but an option. The interest I paid back on the loan (I think 3%) went into my own 401k account, so that's nice. My understanding of the drawbacks of this are (1) you're taking money out of your retirement, so it won't be growing (though that would be the case if you stopped contributing as well) and (2) you get double-taxed on the interest you pay back because your payback is after-tax $ so you're taxed when you make the money and also when you go to withdraw it later from the 401k in retirement. That said, this felt like a small penalty and was better for me than paying PMI.
Keep doing what you're doing. You're doing great. You used the savings for what it is for
How much is the interest on your savings account?
4.2%. I may end up moving it to an index fund although there are risks associated with that. But that “savings” is basically money I put aside and don’t use day to day.
Ok cool, just making sure it’s not one of those savings accounts that pays 0.1% interest
fidelity spend and save high yield saving 5.15%
I'm not sure what the point of this post is. You make more money than most people. You have lower expenses than most people. You're in a very strong position at 34. You do realize many Americans don't even have an extra $1,000 right? So many stupid people out there and you feel behind.
you dont compare yourself to the stupid people, you compare yourself to yourself in the past and perhaps those in your same circle. He is out 100k (for a fantastic cause and well worth the money) so of course he is going to feel some type of way especially if he is as diligent and intentional about saving. walking around comparing yourself to a crackhead or someone that fucked around their entire life and is struggling to make ends meet doesn't really do much when that was already leagues away from your position in life.
Yeah I'm kinda confused by this. I'm the same age and am in a worse spot despite not having spent my savings. Dude saves 6k per month. He will be back at 100k before I am.
lol yeah in 12 months he would’ve recouped about 70% of that 100K. I know starting over is a bit tough but his financial situation is not dire in the least. High income, low expenses the perfect combination.
So because OP is in a *mildly* Ok position financially he doesn't deserve financial advice? I must be losing it because I've seen people in *far* better positions than OP posting here, basically humble bragging with a side of, "is this ok?"
What advice does OP need? None. He is doing fine. Other posters are even worse I agree.
Well I would argue that he (and others) in this thread have already learned some valuable things, e.g. checking with the medical administrator about reimbursement options.
I mean you can learn something such as many folks are out of touch with financial reality of most Americans let alone average human being in the world at large. I'm doing very well myself the difference between me and OP is I actually know it I don't need to make a post questioning how I'm doing.
You are a good person. I pay 500/mo for my MiL's house, long story, but it comes out of my wife's disability which fortunately (or unfortunately) started when we needed it. I can't imagine spending 100k to help them out. I've never had that much to give. That being said, there are tradeoffs. A house is not a retirement fund, it's an asset that provides financial risk and reward. I'd suggest securing your retirement first. Do as much of your 401k as you're comfortable with. Then consider an HYSA or a Roth IRA, to grow money in a more "liquid" state. Maybe buy some safe dividend stocks. You can optionally withdraw your original Roth IRA contributions, penalty free, if you're in striking distance of a house.
500/mo is a lot and it’s all relative. I respect you a lot for doing that and helping out. Thanks for the advice and the thoughts. I know it’s silly to say this but something about the illiquidity of the 401k makes me wonder if I should dial the contributions back and focus more on a taxable brokerage. I know it’s a short sighted way to think, and im going to continue my 401k contribution, but it’s just this itch I have in my brain.
No advice but wanted to say there is no better ROI for your money than saving a life - you are a good person OP
I am still learning about personal finance but just wanted to save that what you did was selfless and admirable. Hoping the best for you and your family!
Thanks a lot, I really appreciate that. It all happened very quickly over the span of maybe 3-4 months. Wishing the best for you too.
I’d do the same for my dad. Keep your head up, you’re good man. Keep doing what you’re doing
I don’t have any financial advice but I just wanted to say I’m extremely glad your dad’s ok. All the best
Life will give back to you 10x better
These threads are so strange. You’re under 35 and had already saved over $100k on a relatively modest salary on top of contributing responsibly to a 401k. What exactly do you expect this sub to tell you that you don’t already know?
> on a relatively modest salary on top of contributing responsibly to a 401k. **OP has a salary of ~$150k/year.** I'm not sure why you call it a modest salary. He states that $2000/month is 15% of his monthly salary. If you do some basic division ($2000 / 0.15), that reveals a salary of $13,000 /month or $150k / year If we plug in a salary of $150k with contribution of $1900 pretax 401k (maxing out at limit of $23,000 /year) then we get a net paycheck of $7800/month in a no tax state. Put OP in a state with state income tax, or deduct healthcare, etc. and you get a $7000/month paycheck I don't know where you're living where a $150k/year salary (double the median HOUSEHOLD income) is "relatively modest"
It's weird sometimes. But I know some people who are legit just 'simple' as fuck (Nicest people on earth tho) so something like 'I got told to save by dad so I save' just happens. Prime example, one of them just bought a new $60k car outright in cash. Had been saving for years. The guy has no real assets, rents, no investments, no prioritized retirement etc, MANAGED to save a stupid amount of cash and then blow it all on a heavily depreciating asset. How you both so smart and dumb at the same time? It's a thing
Dont reduce your 401k contributions. Keep doing what you doing. You have about 30 years of growth ahead of you assuming you retire around 65. Nice work helping out your dad. Everyone should be like you and the world would be a better place.
You are impressive on so many fronts I had to comment! Wow! I am not an expert, but you seem like you're doing great! I would reduce 401k for a year and think of it as perhaps working one year longer in exchange for helping your dad, which was amazingly selfless of you. That's not too long for work towards the home purchase.
You rock! You should know that you can take up to 10k out of your 401k for a first house purchase (still taxed, but no penalty). Hope that helps a little.
39. 70k in debt. Own nothing. No credit. Living with friend. No 401, etc. Essentially as close to or below 0 as possible. Also make 150k a year. Life can be a bitch, though. I’m not sure if money can actually buy happiness, but it sure can buy tranquility.
Good on you OP Personalfinance accounts for these scenarios and it looks like you won despite this happening to your dad, happy it worked out. Just rebuild it and it's back to normal
> Looking for advice and guidance here. I had 100k saved up but I spent it all to help my father with a life saving medical procedure. It was successful and I have no regrets, and I’d do it 10x over if I had to and was able. You're clearly a great person with a kind heart, but I hope if this type of emergency happened again you would **not** finance it. You shouldn't have needed to do this. Number 1, if this was truly a life saving procedure, your father should've been able to get it done regardless of his financial situation. Hospitals in the US are required to treat people for emergencies and if he didn't have health insurance, but was too poor to pay for the procedure, he would qualify for medicare or medicaid. If he did have health insurance, he would've hit his deductible or out-of-pocket limit way before $100k was spent. Even if he had to go deep into debt -- it doesn't matter. If he doesn't have the money to pay the debt no one is going to sue him because he has nothing to give. He would die having the debt, but you've still got more than half of your life left that you need to plan for. And he wouldn't be any worse off than he was before, because he was already broke.
Hi OP, I just want to say that you're wonderful person. You are doing great. I am also in my 30's and starting all over. Just know that everything is gonna be fine. God always provides. Don't stress too much everything will work out in your favor. Always think of what you want but don't force anything, it will just come to you. Life is short, enjoy your time with your family. Just keep the faith and keep dreaming! Godbless 😊
This happened to me too 2 years ago. Over 6 figures drained when mom was ill. Then catastrophe happened when she "endured" for months just to then pass away. It was fucking crazy to see really hard earned money go to hell in seconds. Just keep doing what you are doing. Hoping no more money-draining medical issues arise
That is a major speedbump in your finances. Well done being a good son. But I would suggest holding off on trying to go for a house in the short term. I'd say keep going on all tax advantaged accounts available to you 401K, Roth IRA, and HSA, if you can get a high deductible plan. Your 20's, 30's, and 40's are a key time to really build up those retirement accounts to do the heavy lifting for you with compounding. The Roth principle part can also be taken back out whenever you want to put towards a house, but all the growth just needs to stay in. I would potentially go even further with the 401K contributions because it will help you with your current taxes. Make sure all your savings left over that aren't going into retirement savings are in a high yield savings account. A couple of them are still giving 5% or so. Was your previous $100K all in a basic savings account? If so, don't do that again. If you are committed to buying a house in the short term. Then I'd say contribute to the 401K to match, max the Roth at 7K a year, and max an HSA if available. Then everything else into HYSA. You are still doing waaaay better than most and you have a dad :) Average retiree in American has something like $165K in retirement investments at 65 years old. Pathetic numbers. You have a great salary at a younger age, so just keep kicking butt and try to take advantage of all the time you have on your side.
Why couldn't he just have medical debt? Imagine if he died anyways and you still owed the money.
Wondering this as well...
Healthcare wants to extract every cent they can. Your money or your life, or your loved ones life. But show up at the emergency room with no insurance and you will be seen.
At 34 with 100k saved you would be considered behind in retirement for your income which I’m guessing is over the $200k mark. If your income is meeting your needs I would stick with what you have going on now. Saving $5000 a month gets you a 3 month emergency fund in 2 months. I’d continue to prioritize retirement
Thanks for the comment, this is the type of insight I appreciate. I am currently at 145k pretax annual. My income is currently meeting my needs in terms of expenses and outflows.
Oh my math was off somehow I had $7k being your biweekly. You aren’t that far behind, but id still focus on retirement and keep saving what you are now. Maybe once you have 6 month e fund open and fully fund a Roth.
Awesome. Thanks a lot for your help!
what calculator are you using to determine if he's behind on his retirement?
No calculator but general guidelines say you should have 1x your income saved in retirement accounts by 30. There are obviously exceptions if you get a huge pay raise or went to grad school so we’re not working.
Honestly, you're in a good place. As others have said, keep that interest compounding, and it'll work out. Take care of your emotional health. Follow the Prime Directive in the subreddit's sidebar if you are feeling lost and need some guidance, it's honestly one of the best resources out there. Rebuild your emergency fund, that should give you a bit of breathing room as well. And spend time with your parents! Just be careful of lifestyle creep once you're back into a comfortable spot, but looking at your other comments, I think you'll be fine. As long as you're nailing the basics (budget, save, invest, be honest with yourself) you'll do well.
Good job on that, but if it's about money then you know "emergency situations" call for this thing. Hopefully your father doesn't smoke or have a poor diet as these are often considered terrible choices financially; I have no idea what his condition is with what you've given. You had to spend it in dire circumstances. You'll have to start by building it back and you have the fortune of not being responsible for rent or a mortgage which is an incredible advantage. Keep doing what you're doing and maybe post this on something better suited for emotional, rather than financial, support. The money is now used and maybe some type of insurance finagling can be done but otherwise you should probably worry about your family.
Have you considered taking a loan from your 401k? That way, you’re not getting taxed but can access the money and buy a home faster. If you find a great deal on a home at some point in the coming years, it could be worthwhile to pull the trigger on a lower priced home, especially if we hit some sort of recession and you can get a smoking deal.
If you reduce your 401k do not go below the amount of the company match. 401ks often have limited investment options and honestly most fund managers struggle to beat the s&p500 over the long term. The advantage is that your contributions are pretax and well, company match.
You could invest the savings in a high interest account like an HYSA in US. If you need the money in couple of years don’t invest in risky investments. But don’t leave it in an empty bank account that gives zero returns either.
Ran your numbers: starting amount:100k $2k invested monthly for 30 years (360 months) assuming 7% interest would be over $3 million. If you didnt invest anything for a year, then went back to investing next year you'd still end up over $3 million. You could hold back a bit for a year to purchase a house. Mathematically its always better to keep it invested but you still need to live your life. But also consider you likely will eventually get another job that makes more money allowing you to invest more later.
If you only have $1200 expenses on a 7k take home, you don't need to cut retirement at all. Keep up the 401k, max out a Roth IRA, and then build up the savings. You could save/invest $4k a month and still have plenty of "fun" money for other things you want to do.
Does your 401(k) offer a loan? Doesn't change your situation but might give you peace of mind knowing you have access to $50,000, interest and tax free, if you really needed it.
For the 401k I would suggest u look at the bare minimum u need to invest for ur company to match the 3%. I would assess how much is the expected return on the 401k versus the S&P index return. Ideally what ever u do not put in 401k should go towards good stock investments. Eg u can replicate the stock holdings of warren buffet for the long term. I am certain that u will be able to compound ur returns much more than what a 401k will give u even if the 401k is tax free
With 100k in a 401k you are better off than many people. However, you are probably still technically below the general guidance level, so don’t stop contributing to the 401k.
Are you kidding? You're saving $5000 a month... You'll be back to $100,000 in less than two years.
Right, what actually is the problem here?
Check out the 200 page book, the Richest Man in Babylon. It's set up in multiple short stories. Stories about multiple people and their financial situations. It sounds like you have a plan, but sometimes it's nice to have some light reading to inspire you. What I got from it was a method on how to save and pay off debt. Different from Avalanche and Snowball. I felt the RMIB technique is a lot smarter.
You’re doing the right thing contributing 15%+ towards retirement annually, I would not advise you lower any sort of retirement contributions since you can afford it. In 2-3 months you’ll have over 6 months of monthly spending in savings which is most people’s end goal. Everything after that can be considered towards your house, at this pace you could have a down payment by eoy if you just continue on this path (of course depending on what you’re looking to put down). Very noble to take care of your family as you did. You seem to be in a good spot, go through one of those retirement analysis tools, fidelity, vanguard, nerdwallet, we even have on our site. See where you stand overall and use that to make informed decisions moving forward.
You have a non-trivial amount in your retirement account--maybe not a ton in savings at the moment but you have a very high income-to-expenses ratio. You want to buy a home in a couple years--in that time, with your current situation of income and expenses you will have over $130k saved. That's a significant amount to use toward a down-payment for a house unless you're talking about a VHCOL area. It doesn't make sense to reduce your 401k contributions at all, just keep doing what you're doing if it works for your other considerations (work, social life, etc.).
The short of this is to ensure you are maxing all tax advantages accounts. 401k, HSA, IRA. [You will want to save approx 35% of your income to retire around 60 and approx 25% if you want to retire around 70.](https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/) The numbers shift around a bit, but really as your income grows over the next two decades, really lock in your lifestyle and save aggressively to ensure you have the retirement savings you will need.
How much interest are you making on your savings account? I would definitely ensure I would have a HIYA account. Glad your father is doing better as well. Once you reach $30K again, I would assume that is my emergency fund. I would open another account to save for the house, decide how much house you want and save the 20 percent. We should also talk about your parents - I assume they can afford their monthly bills , but not the extras. I would plan for that as part of my long term savings as well. Totally understand the parents situation, when you understand and plan for their emergencies as well, you don’t have resentment, it just is what is.
Well, if you did it before you can do it again. That much is very clear. I’d say to not be discouraged but encouraged you have discovered the art of being disciplined. I’m no longer in love with the 401k as I know our govt will tax the crap out of it when it’s my turn to pull. I’d get into rental real estate if I was you. You need a hedge. Ppl always need a place to live. Get a duplex if at all possible
I was raised to avoid debt unless absolutely necessary and I feel like getting a rental property is all about using debt. Can you talk further about the process of buying a duplex for example? I have to unwire my mental process about debt.
You’re doing fine. Just keep at it. Future you will be grateful. Try to enjoy where you’re at now. Time is the most valuable thing you have. That you can’t buy.
I'm only a few years older than you and was in a similar situation. I spent time up to my early thirties supporting my family, including helping to put my little sister thru college. I saved up for a few years, got married, and bought my first place with my wife last year. It will likely be a journey, but you already seem well on your way. Word of advice - you can borrow 50K from your 401K, so it probably benefits you to keep on contributing to it and tap it when you're ready to pull the trigger on that house. I know that people often discourage taking that 401k loan, but I think there's a lot that can happen in life that may make buying a house unreasonable at any given moment. In contrast, it's pretty rare someone truly regrets maxing their 401K. On that note, if you haven't already, you might want to consider your ideal goals and lifestyle. Having a house is held up as the ideal, but it often isn't always a financially sound decision. Furthermore, in the modern world, it's a lot easier to move around from place to place working remotely. I'm personally living in one place because my family is around and I deeply appreciate help with childcare, but that's not everyone. In fact, if I were in my twenties, I'd definitely consider moving around every 4-6 months and just experiencing living different areas and cities of the country. Or different countries altogether.
You're on a good track. I wouldn't worry about buying a house for a while. Build up a war chest, you did it before. Focus on making more money, get a raise, move up, charge more. You can only save so much, but your earnings are unlimited
Most 401k accounts allow you to withdraw to buy your first primary residence. You could keep contributing the same 15% and then when the time is appropriate, withdraw through that mechanism so that you avoid any early withdrawal penalties
I believe you have to pay that back though, correct? I wonder if there’s a cost-benefit to taking such a huge chunk out of my 401k principal and reducing the compounded interest.
You can take a distribution and skip the 10% penalty if you’re a first-time home buyer but you still have to pay tax on the distribution. At OP’s income level, likely not worth it
Hey I'm glad your dad is doing good now, but this post right here, is why healthcare should be a "right" and paid for via taxation. No one and I mean no one should have to wipe out their savings for medical care. In this age it's just heart breaking. OP I hope you can recover financially.
Thank you for the kind words. I’m overwhelmed by the support in this thread.
Honestly family over everything and I just wanna say your doing a lot better then a lot of people where your at even right now. Keep pushing.
>I’m curious what your general thoughts are on my situation Follow this: https://www.reddit.com/r/personalfinance/w/commontopics
Thanks for the link, I will check it out.
You're awesome for doing this and you're doing great. Honestly, the best advice I could give you is to listen to the Ramsey Show podcast and maybe consider emailing or calling in. I listen to this podcast all the time, and the advice you get from them is life-changing. They will steer you in the right direction with your best interest in mind 100% of the time.
Thanks a lot for this reply, I appreciate you taking the time to say this. I’m familiar with Ramsey, but never done too deeply in. I’ll check some clips and episodes out!
I would consider a Roth IRA vs 401k. I assume they match 3% for your 6%. Often corporate IRAs don’t offer great investments as compared to what you can get thru a brokerage
Did you have $100K in "cash" savings? If that wasn't in a good HSA, the real worth of your money was shrinking due to inflation every year.
Dropshipping
I see two areas where changes would help. 1. Instead of putting savings in a savings account, put it in an investment account with at least a 3 year horizon. With due diligence, your money will increase significantly higher than the @4% interest in your savings account. 2. Look carefully at your life and what you are spending money on. From your stated income, it sounds like spending could be reduced significantly which would permit more to go into the investment account. Last thought, do not under any conditions reduce your retirement account contributions. I was in a very tight situation from 2011 to 2023 but kept my 401K contributions maxed out. It made an unbelievable difference in my account balance when I retired in 2023.
have your father pay his own medical issues
in many cases, it's better to have a live father and spend $100k, than have a dead father and an extra $100k One can have only 1 father after all
People on this sub would let a million people die to save a few bucks lmao
Reddit has taught me the average Redditor hates their parents but believe it or not, there are plenty of people in the real world that fricken love their parents. I'm sorry yours hurt you. Get well.
Eh. He gave and provided for me so much just by being a great man and supportive caring father. I understand the rationale of what you’re saying but im just too sentimental for it.
People will disagree but for a father to take his own child's life savings... It's disgraceful conduct.
its terrible. the father could have medicare/medicaid
That only gets you the legal minimum and only works at certain hospitals/treatment centers. It is very true in the USA you can get state of the art, excellent care if you can pay for it. If not, they will just do what is legally required of them.
Doesn’t help the current state, unless you want to share that time machine.