Savings Hack: Front loading 401k, IRA, HSA

At the start of the year, my goal is to get my money into the market ASAP. I don’t believe in dollar cost averaging and you can read more about why at and a video at Money for those that like movies. With that in mind, on December 1st I login to my 401k account and turn the nob to MAX. My work has a max of 50% per paycheck, I crank it up to 50%. It takes about 30 days for a contribution change to take effect, which is why I set the contribution on December 1st. Until the point that my 401k is maxed I will live on only 50% of my paycheck. Do the same for your IRA. With the remaining 50% of your paycheck, fill up your IRA coffer with the yearly max of $5,000 on January 1st or January 15th - your first paycheck!

This means you will be living on less than 50% of your paycheck for the first few months of the year while you are maxing your accounts. During these months, maybe you dip into your emergency savings until you hit the max. After you max out your accounts and your money is busy in the market you can return to rebuild the months you removed from your emergency account or whatever you missed out on while you were strategically maxing your pre-tax equity accounts.

Caveats: My employer doesn’t offer a company match. If your company does, adjust accordingly.

Note. This blog is written by a Bay Area tech person. One of the reasons I created this website is I found other financial independence websites didn’t relate to high tech salary earners, but catered to low earners that despised the Silicon Valley high wages. Truth be told, plenty of people in the Valley need financial advice. We might earn a good salary, but look around at the number of Teslas, $5 lattes, and foodie culture. That all costs mucho money.