so I am 41, no kids. I have a house with 84k left on the mortgage. it’s 30 year 3.75%
I have 50k savings and 64k 401k. I know my 401k is very low, i will be putting in the max starting 2026. I was paying down my mortgage, I bought the house for 541k 11 years ago.
i just changed my job. my salary is 170k with potential bonus of 55k. I am freaking out a bit, because the company I joined will be sold in 2026. I’m just worried about job security.
im single, so I don’t have anyone else to help if something happens financially. I need about 3500 for monthly expenses so I have about a year of emergency fund. what else can I do to protect myself? I don’t think they would hire people if the intention was to get rid of them. but what do you think I should do? if I put in the max into my 401k I should be able to save 2k outside of that in a brokerage account.
I’m just freaking out a bit, can someone give me some guidance
byu/audit123 inpersonalfinance
Posted by audit123
18 Comments
So you have a year’s worth of expenses saved and are maxing your 401k. You don’t have a finance issue, you need to sit down and figure out your personal career and life priorities. Personally, I recommend trying a therapist. It’s always good to even just check in like you would with a physical health provider and maybe you’ll find your way to identifying what you really want!
Save as much as you can. If you just got hired you may be more at risk of being let go. Just depends on the buying company’s priorities and if roles/depts are redundant or not.
1) work your ass off and get to know your new bosses.
2) if they have their own guy who does what you do, spice up that ol resume.
3) make them lay you off, take a buyout… if you time it right, you could end up with a decent chunk of change and another job
Financially, you’re making all the right moves.
Hold up on paying off the house. You can get a better interest rate putting cash in a CD thqn you are paying on your house. Otherwise, your moves look good.
You have 26 years until the “standard” retirement age. If you max out your 401k over that timeframe, and invest it in something simple like a target date fund, you would in all likelihood be a multi-millionaire come age 67.
You also have about a year of expenses squirreled away in an emergency fund. That gives you a *lot* of safety net for finding another job, especially if you end up getting severance and/or unemployment should you end up losing your job.
Your savings are in an iffy spot (though a paid-off home makes that a lot less scary), but otherwise you’re in an excellent spot. Be diligent about pumping up that 401k, and you’ll retire more comfortably than the vast majority of the country.
You’re killing it!
Just start maxing the 401k, Both IRA and HSA, and continue paying the house down.
In a decade you’ll have a house free and clear and hopefully 🤞 creeping toward $1m in investments.
Don’t get down on yourself. Celebrate! But ya, now is the time to max all the tax advantaged account every year.
If you have a potential 32% bonus then production or performance in your role seems likely to play a major part in whether you actually get it.
The sure way to keep a job like that is to be the moneymaker that will earn money for your employer.
If you’re not seen as a cost center, you’re likely to be secure. If the new owners need to cut costs and line their own pockets your bonus rate could fall.
Not sure why you’re paying down a 3.75 mortgage and locking up that cash with less than 1x your annual income saved/invested. You really need to buckle down and save/invest like 20% of your income moving forward.
I think your new plan is good. Like you said, you’re behind on retirement which should be your focus from here on out. Don’t put any more extra towards the mortgage given its low interest. Max 401k, put money towards brokerage account and keep investing. Make sure to do a full budget review in case the acquisition does end up changing things, that way you already know where to cut down costs if you need to.
Easier said than done but try not to worry. If the decision to cut employee does happen, most likely it was out of your control
It is worth thinking about and understanding about the purchase. There will be a reason for the purchase and goals the purchaser has. It could be that they will cut all the expensive people or it could be that they double down on them. Try to reason about it analytically, as though this is what is happening to a friend and they are asking you for advice. If you arrive at the conclusion that the job you took is at risk, then you can sort through what to do. It will take calendar time to complete the acquisition and to go through the review procedures and everything. You can use the time to your advantage, to network and otherwise position yourself advantageously.
But it is very important to bring an analytical clinical understanding to the overall situation. Think about the people who are in positions to make decisions. What do they think and want. When you understand what they want and will do, even if it is not good for you, you are still better off, because you are not surprised and can prepare. And even if it is good for you, they are buying to double down, you still need to understand what they expect and what their goals are, to know what job you are really doing, which will be different from what you might have been hired initially for.
Financially having a year of cash for expenses is good, and while paying a low mortgage is not the best long term plan, reducing your debt is a good idea from a safety perspective. You are in ok shape. Just take your time and reason through what happens next.
Recast your mortgage which will lower your monthly payment significantly and then invest the difference.
Max out your retirement first and then start a brokerage account to invest extra money. With your salary and such a low mortgage payment, you will be able to save a ton of money in the next 5-10 years. Ride out that 84k at 3% as long as you can and stop paying extra on it.
Assume you are able to invest 48,000 a year for the next 25 years (401k match of 24k + 24k into a brokerage) that puts you at 3.5 million assuming an 8% average annual return. That is not even factoring in the amount you have saved already. As a single person with a paid off house, you would be able to live a lavish retirement lifestyle.
Your house is mostly paid off and the payments are probably going primarily towards principal now, so not much point in paying any extra towards it, especially with the lower interest rates. Is it a 15 or 30 year term? If you bought it 11 years ago it’s most likely worth just shy of a million dollars today? So that’s roughly 900k in equity. You have a lot tied up in your house though, with relatively low savings. You really need to focus on that moving forward.
If you max out retirement from now until 65 you will have about 1.7 million with a 7% return. Your home should double in that time so you could always downsize and make a few million off that. Thats a nice $4M to retire with
Man some people’s problems are another’s dream I tell ya.
Since you just changed jobs, how likely is it that you can go back to your old job? If not likely, do everything you can to show your worth at your new job.
That doesn’t seem right. You bought a 541k house but only have 84k left? Did you put a huge down payment and/or put added payments towards principal?
I hate to say it but you messed up paying down your mortgage over investing. You missed out on roughly 10-11% return on investment to save 3.75% on interest. In simple terms, 11% growth versus 3.75% loss on interest would’ve put you 7.25% in the positive on that money, and then that would’ve compounded for years. This is a good general rule to consider when deciding between paying down debt versus investing-if the interest is below average market returns of 10%, invest the money. Don’t sweat it now, just stop paying any more than your minimum monthly mortgage payment and throw everything you can at your investments. The good news is the house still has value you can reap later when you sell so it’s not a total loss in that regard. I’m not sure what you have access to but I would start with putting money into your 401k to get your maximum company match, then work on maxing out an HSA if you have one, then work on maxing out a low cost Roth IRA from companies like Vanguard/Fidelity/Schwab, then go back to increasing your 401k until you max it out. Long term you’ll be fine I think you still have plenty of time before retirement. Take advantage of catch up contributions once you reach the age (55 I think?) if you can. Your savings of $50k is great for an emergency fund. No need to put more there in my opinion, just work on investing now. Good luck!
I dont see it mentioned but if you are able to start an Health Savings Account you should also be making contributions to the limit and investing that money. A very significant cost in old age is healthcare with a current estimate being that someone will need on average $330,000 between retirement and death. An HSA is one of the most financially efficient vehicles that exists as you get a triple tax savings (no tax on contributions, no tax on growth, no tax on usage). 26ish years of stock growth on an HSA may be enough to cover this.
When job is not secure *flexibility* is more important than optimization of interest rates and taxes. **Cash is king.**
So instead of storing your assets in your house (very illiquid), build up your Emergency Fund in HYSA to 1 year of living expenses. Instead if traditional retirement accounts, choose Roth accounts where you could remove contributions if needed.