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Put in as MUCH AS YOU CAN now, there will be a time where you feel the need to divert some funds to 529s or a mortgage etc. So bulk up now.
I didn’t when I was younger and I absolutely regret it. Especially with social security petering out over the next 10-15 years, we have to watch out for ourselves!
I also suggest you get yourself a financial advisor. Again - waited too long for that and am so grateful to have one now.
We found ours through friends - and she’s great. She’s fee-only. 1200 retainer/year - we don’t require much handholding, but she does handle our Roth investments and advises when my husband has an emotional breakdown.
I’m happy to pass along her name - she’s a funny soul and advises all of our friends. Not pushy, good listener.
Chief
I'm happy for all of you. Every time one of these threads comes up I always feel like I'm bad at being an adult. By the time I'm done with rent, bills, and student loans, I'm lucky if I can budget a hit of 5% for my 401k. And it's not like I go out all the time or buy stupid things. My money is just spent before I've made it. Luckily, this puts me on track for a stress induced cardiac event that will greatly minimize the number of retirement years I'll have to fund.
I’ll be right there with you!
Max it out if you have the means to afford it. I’m so glad I did because I’m now going to a company that does not offer a 401k and glad there’s a good chunk of money already locked away.
There is also one strategy that’s right for almost everyone: at least put in the full amount your plan will match. Investments where you double your money right away are too good to miss.
Put in a little more than you think you can afford. Does you company give you 6%? Or is it half, up to YOUR 6% (aka, 3%)? I wish I had started earlier and put in more. This calculator is useful: https://www.bankrate.com/retirement/calculators/401-k-retirement-calculator/
Put in the max. It matters. It also lowers your salary so that you aren’t paying taxes on the money you put in. When I was your age, I was only making the equivalent of $66,000 today. I’m maxed My contribution, got the company match, every single year, and now I’m very glad
I'm at 10% in my 401k plus maxing out my Roth IRA yearly
A 401k can also be a roth, all depends on what your company offers
Rising Star
15% is recommended
I put 15%. Then once I hit the cap, it’s a fun raise for me the rest of the year
Max it out - if you can’t, try to contribute as much as required to max out the company match. This should be the baseline, otherwise you are leaving $ on the table. If you are younger consider ROTH contributions, as your tax bracket is less now & the investment will grow tax free over your lifetime. If older in your peak earning years it may be wiser to max it out traditional which is all tax deductible.
For your case, depending on what you need left over I’d strongly consider Roth as you have another 20-30 years of work ahead, and it will grow and be able to be withdrawn tax free at retirement.
Consult a tax / accounting professional to weigh the pros and cons - I’m not an investment professional - its important to consider ROTH vs traditional 401k contributions, and also remember you can contribute either way over the course of your working years depending on the circumstances.
Don’t discount the tax implications of when you contribute, they can make a massive difference later when you go to withdraw.
FYI: Up to 19,500 per year is tax free. (Any your employer matched is also tax free.)
Correct! Sorry I should have clarified. But chances are you are at a much lower tax rate when you’re retired than when you’re working, so it works out much better.
You all are doing great!!!!! Yes, don’t forget that once you max out your 401k you can do IRAs
I’m in my early 40s now. My husband and I were both religious about (and hefty with) these contributions early on, so that even though we had to slow down saving a little in our mid and late thirties (kid, mortgage, etc) our investments were already building up.
Max out the $19,500 if you can.
Currently at 30% but I don’t make as much as you. I’d recommend whatever percentage gets you to the federal limit for yearly contributions to your 401k, and also be contributing to a Roth IRA. But start by meeting with a financial advisor so they can provide customized guidance to your situation.
Try to hit the annual max. You will never regret it.
Definitely roll old 401ks into Roth or Traditional IRAs and then buy a mix of ETFs and tech stocks. I do this and see 20-50% gains per year, crushing target date funds. Also check out AltoIRA as a path for crypto and pre-IPO investments. And check to see it your current employer 401k plan offers self directed investments.
Just make sure you Max it out by end of year. It’s super important and so freeing when in a handful of years you’ve got some serious money squirreled away and compounding.