Ytdyklly

I currently have a roth ira as well as a 401k from fidelity. I have around 350k in my 401k and another 10k in my Roth IRA. I just turned 40 recently. Am I saving too much for retirement and should I focus more on saving in say a regular savings account?

I have around 30k in a regular savings account along with another 30k for my children’s education fund (3 year old, 4 year old, 10 year old).

I have no car loans or student loans. My only debt is my house monthly payment around 1700 a month.

Nobody ever got to retirement age and said "Wow, I saved too much".

Your wealth has a direct effect on your quality-of-life in retirement - how much you travel, whether you go to movies vs. the opera, for instance. Near to endlife, it decides how good your situation will be: the quality of your independent living, assisted living, skilled nursing or hospice care. That matters. My parents despite being middle class, did very well in that department because they saved well.

Given that you are now gettng cold feet about further retirement investing, I recommend you focus on Roth IRAs (and possibly Roth 401Ks). Roths have a slick feature relevant to your concerns. Your intitial contributions (I call it the corpus, the term is actually from endowments) can be withdrawn at any time. Which means when you contribute, your money starts earning right away (properly invested). You can't take out the growth/dividends, but you can yank the corpus back out anytime you please without penalty. (Other than the passive penalty that the money is no longer multiplying for you, and it can't be put back later). The confidence of knowing this is like money in the bank -- literally, you can use it as an "emergency fund".

If you are above the income limits for contributions to Roth IRA (or even if not), then you use the "Back-door Roth" method -- deposit into a non-deductible IRA (a traditional IRA but don't claim the deduction on your taxes) then immediately convert it to Roth.

I can't comment on Roth 401Ks, I have not worked with them.

Let me focus on the retirement number. I wrote a blog post on just that, The Number. In which I offer an easily editable spreadsheet to help users see if they are on track. With a goal of having 20X one's final income at a retirement age of 62, at age 40, you should have just over 5X your annual income saved. If your income is $70K or less, you are doing great, much over $100K, and you are falling behind.

If your question is about your investment mix, yes, it's good not to have all one's money in pre-tax accounts when retirement comes. I retired at 50 and will tell you first hand, it's a strange thing to look at a retirement account balance, and feel the pressure to avoid withdrawals that will be taxed at the next marginal rate, or phase out some tax benefit. I'd strongly recommend you consider a Roth 401(k) if available. If not, try to fund the Roth IRA every year. It with give you more flexibility at retirement.

I would argue that in a world of compounding interest, that is, where time beats interest rates (as long as your investment vehicles don't fail to beat inflation) there is no such thing as "saving too much". Without knowing your goals (maybe you're up to an early retirement?) it is impossible to tell.

I have around 30k in a regular savings account along with another 30k for my children’s education fund.

The key question here is therefore not if you have saved too much for retirement but are your other financial goals are in line with your expectations, i.e. are you comfortable with the amounts in your savings account and the children's education fund? (Even a State College can run $50K for the 4 years). Nobody can tell but you yourself.