If I were to meet my 20-something year old self, I would probably punch him in the face! Among other questionable activities, for not signing up for a 401k, for not opening a stock trading account in a ROTH and for not indexing. These are regrets I will carry for a long, long time.
To make up for these mistakes, I max out my ROTH and my spousal IRAs and contribute to my 401K. And I only wish I had more investment space in my ROTH. If the ROTH limit were to be increased, I would most definitely max that out! (I did make use of the paltry $500 ROTH increase this year.)
But here’s the twist. I don’t max out my 401K. Not because I can’t, because I don’t want to. The funds are terrible and the fees outrageous. I pay 5 times the fees for an S&P 500 index fund in my 401K, when compared to its Vanguard equivalent ETF in an IRA!
I know I’m shooting myself in the foot here. Even though the fees are bad, I probably should contribute as much as I can in my 401K to make up for the lost years.
But something happened. There was a chance that I may have to switch jobs. Which meant a 401K to IRA rollover, which meant freedom to invest in any fund I want without being forced to pay outrageous fees! I didn’t want to miss this golden opportunity to stuff more money into my IRA, so I temporarily increased my contribution from 4% to 14%!
The plan was to keep contributing 14% till I move out, rollover my 401K to my traditional IRA and reset my contribution rate back to 4% in my new job.
But then, I decided not to switch jobs after all! And so you would think I would’ve reset my 401K back to 4%. It takes only a few clicks to reset the contribution rates and I know I can do it any time I want, but I still haven’t.
And knowing me, I probably never will. I’m just too lazy! Laziness is my vice and I put it to good use!