January 17, 2024


Liz Yoder, CFP®

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Saving Too Much Is Possible: Remember Your Life Goals

A few of my recent conversations with families included the idea that you can save too much.

The most frequent form of saving too much is putting your dreams on hold because you are focusing on the logistics of following the financial rule book.

I am personally guilty of this. As a Certified Financial PlannerTM specializing in special needs families, I know the rules of how much I can save in each account. For 2024, the contribution limits are:

IRA contributions under 50 - $6,500

IRA contributions 50+ - $7,500

Personal 401k contributions under 50 - $23,500

Personal 401k contributions 50+ - $30,500

HSA contributions for a family - $8,300

HSA contributions for an individual - $4,150

529 tax-deductible contributions in my state of Maryland - $2500 for each spouse

ABLE Account regular contribution - $18,000 (also the taxable gift exclusion)

ABLE to Work Contribution - $14,580 

When looking at the above numbers, the over-planner and over-saver with a comfortable income may forget to include their personal goals. Maybe you’d like to visit a friend who lives in Europe this year. Or you want to take your family to the Harry Potter World for the first time. Or you want to take a cruise with your girlfriends from college. If your savings are put in a place you can’t touch, making those plans will take much longer.

So, what is the right thing to do? Review your goals and a timeline of when you want to achieve them.  Learn more about our special needs Certified Financial PlanningTM services.

Review the life you expect in retirement. Review how long you will have to save for your goals. Work with a planner to make sure you are on the right track. 

An advisor can support you in understanding the rules of when you can take money out of your long-term savings accounts:

Any traditional or tax deferral account – Penalties apply prior to 59 ½ 

Roth Account – Penalties apply if the account has not been open for 5 years

Health Savings Account - Penalties apply if not used for health-related expenses

529 – Penalties apply if not used for education expenses

Instead of reducing a large portion of your income every year to majority accounts you can’t touch for a while, move a few percent of your retirement savings back to your goals budget. This move does not have to be forever. Goal funding is not necessarily a lifestyle shift unless that is your goal.

My family wants to travel more in the upcoming year. We want to visit Costa Rica, Iowa for family visits, and California. We have also been talking about remodeling our home, turning an unheated play and workshop space into a more functional part of our home. I also hope my next vehicle is way off, but I’d like my next car to be a more recent version of an energy-efficient vehicle. My husband’s car needs to work, and there must be room for his water sports equipment. We will both likely need new cars in the upcoming years.

My biggest goal is redoing our home so we can feel more able to support community gatherings in our home. I feel like delaying this goal delays the goals of who I want to be and how I want to live my life. 

My husband may choose a different goal, such as travel, as he has always had much more comfort with getting outside his daily routine through exploration. 

Whatever the case, if we focus only on the long term (as is my go-to mode), we delay the life experiences we talk about and dream about. I prefer to build the life I want now and later instead of just later. 

Changing the timeline of saving for goals requires understanding where you are today with your long-term needs and goals. This requires regular review to ensure you are on the right track and your life is being led by your intention vs. being brought along by your life choices.

There are truly times when it makes sense to put goals off or to reevaluate if all your goals are feasible. Once the review happens, clarify what is most important to you and continue to adjust.

Contact our special needs Certified Financial PlannersTM for help.

Contact Our Special Needs Certified Financial PlannersTM