Good % of pay to put in 401k?

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[ARCHIVED THREAD] - Good % of pay to put in 401k? (Page 1 of 2)

Posted: 12/16/2005 10:43:45 PM EDT

I got my benefits stuff at work, they match 50% up to 4% total of thje 401k, I put in for 8% to go to it so I would get the full 4%.

Whats normal or a good amount, to put in, I can always change in 3 months.

Posted: 12/16/2005 10:44:26 PM EDT

[#1]

I put in 10%

Posted: 12/16/2005 10:48:13 PM EDT

[#2]

Start with whatever they match; then every time you get a cost of living increase, or promotion, or anything that raises your pay, bump your contribution by 1%. You'll never notice the increase and you'll eventually be saving a good deal of money. I started at 6%, and am now at 12% and never felt it in my wallet.

Edited to add; Here's a good way to look at it: I put in 12%, my company matches 1 to 1 up to 6%, so I am actually putting away 18% of my yearly earnings into a tax deduction that is earning around 13% interest per year.

Posted: 12/16/2005 10:50:12 PM EDT

[#3]

Quoted:
Start with whatever they match; then every time you get a cost of living increase, or promotion, or anything that raises your pay, bump your contribution by 1%. You'll never notice the increase and you'll eventually be saving a good deal of money. I started at 6%, and am now at 12% and never felt it in my wallet.

Well I figure my cost of living approx $400 a month allows me to do stuff, but Im too cheap to do it. Probaly in a month or so I'll realize I got a 30% increase in pay and buy something I want.

Posted: 12/16/2005 10:52:59 PM EDT

[#4]

I do 17%, but thats including a bit for the employee stock purchase plan.

It really depends on your setup. Do you have a IRA or any other type of investment vehicle outside of your 401k? If so, you can contribute just enough to get the company match and then put some in your other investments. If your 401K is all you have I'd lean on it a bit heavier, or think of gettign into an IRA or something.

Posted: 12/16/2005 10:54:30 PM EDT

[#5]

Quoted:
Quoted:
Start with whatever they match; then every time you get a cost of living increase, or promotion, or anything that raises your pay, bump your contribution by 1%. You'll never notice the increase and you'll eventually be saving a good deal of money. I started at 6%, and am now at 12% and never felt it in my wallet.

Well I figure my cost of living approx $400 a month allows me to do stuff, but Im too cheap to do it. Probaly in a month or so I'll realize I got a 30% increase in pay and buy something I want.

Just make sure you do at least the 4%, otherwise you're pissing away free money.

Posted: 12/16/2005 10:55:45 PM EDT

[#6]

Quoted:
I do 17%, but thats including a bit for the employee stock purchase plan.

It really depends on your setup. Do you have a IRA or any other type of investment vehicle outside of your 401k? If so, you can contribute just enough to get the company match and then put some in your other investments. If your 401K is all you have I'd lean on it a bit heavier, or think of gettign into an IRA or something.

We dont have a stock purchase plan, I asked.

I just put money in that starting next check.

Dont have a life plan, needed one years ago

Posted: 12/16/2005 10:56:27 PM EDT

[#7]

Quoted:
Quoted:
Quoted:
Start with whatever they match; then every time you get a cost of living increase, or promotion, or anything that raises your pay, bump your contribution by 1%. You'll never notice the increase and you'll eventually be saving a good deal of money. I started at 6%, and am now at 12% and never felt it in my wallet.

Well I figure my cost of living approx $400 a month allows me to do stuff, but Im too cheap to do it. Probaly in a month or so I'll realize I got a 30% increase in pay and buy something I want.

Just make sure you do at least the 4%, otherwise you're pissing away free money.

Definately! ALWAYS at least get the company match!

Posted: 12/16/2005 11:00:37 PM EDT

[#8]

Put in as much as you can afford, and make a budget.

You dont' have to calculate it to the cent, but have a good grip on what you are spending.

Beleive me, the time will come you are grateful for every cent, and sooner than you think.

Posted: 12/16/2005 11:47:28 PM EDT

[#9]

Quoted:
Quoted:
Quoted:
Quoted:
Start with whatever they match; then every time you get a cost of living increase, or promotion, or anything that raises your pay, bump your contribution by 1%. You'll never notice the increase and you'll eventually be saving a good deal of money. I started at 6%, and am now at 12% and never felt it in my wallet.

Well I figure my cost of living approx $400 a month allows me to do stuff, but Im too cheap to do it. Probaly in a month or so I'll realize I got a 30% increase in pay and buy something I want.

Just make sure you do at least the 4%, otherwise you're pissing away free money.

Definately! ALWAYS at least get the company match!

+1 If your choice of funds to invest in are not the best, open an IRA an put anything you want to set aside above the company match in that.

Posted: 12/16/2005 11:49:22 PM EDT

[#10]

The typical American socks away something like 8% in their 401k... but that's misleading because it's an average. About 1/3 of people put in nothing at all, while out of the people who do, they put in about 12%. Personally I put in 15%, but I'm cheap and like to save. Whatever you feel comfortable with. Remember to do the following in this order:
1) Contribute max to the 401k to get the max company match (8% in your case)
2) Contribute max to whatever IRAs you're eligible for
3) Contribute whatever else you have left and feel like saving to the 401k

Edited because I can't read

Posted: 12/17/2005 2:00:07 AM EDT

[#11]

Taxman going from "temp" wages to the full time is going to be a pretty good increase as I recall from your previous thread. Start your 401k by contributing the maximum right now. You will not miss the contributed $$ as it is likely your take home will be higher than while you were a temp.

One thing I learned 20 some years ago when the company I worked for sold is that you cannot depend on anyone else to fund your retirement savings. It is YOUR responsibility. Saving 10 to 12 percent per year will put YOU in great financial by the time you are 40.

Posted: 12/17/2005 2:22:59 AM EDT

[#12]

Max it out every year.

Posted: 12/17/2005 2:31:04 AM EDT

[#13]

Quoted:
Max it out every year.

Some of us dont have the luxury of working 20 hours a week, overbilling our clients by 800% and driving home in a Porsche everyday.

But it sure sounds good.

Posted: 12/17/2005 2:31:21 AM EDT

[#14]

Put as much as you can afford. At minimum put in the 8% so that you get the free money from your company

If you start you contributions high early, you probably won't miss them later and it'll pay off later on.

ETA: I'm at 12% but should be putting more.

Posted: 12/17/2005 2:44:02 AM EDT

[#15]

Good advice concerning the IRA, but I put more in my 457k, since I'm planning on retiring before 59 1/2. The 457k is a .gov employee version of the 401k that allows you to start taking money out without tax penalties before age 59 1/2 (which is what you'll get with an IRA). Plan accordingly if you are going to retire early.

Posted: 12/17/2005 3:06:13 AM EDT

[#16]

Quoted:
I got my benefits stuff at work, they match 50% up to 4% total of thje 401k, I put in for 8% to go to it so I would get the full 4%.

Whats normal or a good amount, to put in, I can always change in 3 months.

you're doing good by putting in enough to get all of the matching that the company offers.

Posted: 12/17/2005 8:05:51 AM EDT

[#17]

Quoted:
Quoted:
Max it out every year.

Some of us dont have the luxury of working 20 hours a week, overbilling our clients by 800% and driving home in a Porsche everyday.

But it sure sounds good.

LOL

Try 80 hours per week.

Getting $.45 cents on the dollar

And no Porsche, only a Z4 in the driveway.

Posted: 12/17/2005 8:20:15 AM EDT

[#18]

I'm 22 and currently, as I just got promoted, I raised my contribution from 15 to 17% so I can max out the contributions this coming year. With my company matching 100% up to 4%. I put as much in there as I can afford to. Sure I have to leave meagerly now with what I have left over, I have been told I will appreciate it later in life. Even though I attended public high school, I figured out the beauty of compound interest and therefore why I should put as much money away as possible as early as I can. (I know 401(k) accounts are not interest-bearing accounts, I just used it to illustrate the concept of compound investments.)

Posted: 12/17/2005 8:27:17 AM EDT

[#19]

Take advantage that you may put $15-k into 401-k plans for 2006.

Posted: 12/17/2005 8:35:52 AM EDT

[#20]

I put in 6% as that is what my employer matches dollar for dollar. I thought about bumping it up but it adds up fast anyway. Occasionally he adds profit sharing other stuff in their too.

Posted: 12/17/2005 8:39:39 AM EDT

[#21]

401K contributions are not taxed (until you take the money out in the future). Unless you have other investments that will match or outperform your 401K's performance + your applicable tax rate, max out your 401K first. IRA is tax deferred as well though, unless you're in an AMT tax situation.

Let's say your 401K is growing at 8% per year (the mutual funds or whatever your 401K contribution goes to increases in value by 8% per year) and your effective tax rate is 25%.

An alternative investment choice, if not tax deferred, would have to match or beat 8% growth plus the 8% growth on the additional $ you can invest with the deferred tax. I'm not explaining it very well...

If you put $100 into your 401K each month, you are not taxed on it now. That same $100 in gross pay would be $75 after tax if you were putting it in a mutual fund (ie investing it after you got your pay check). A 401K or other tax deferred choice gives you $25 more in principal that is growing at 8%. A $75 after tax investment would have to grow at about 10.67% to equal the performance of the tax deferred $100 growing at 8% but you're still behind on principal.

Posted: 12/17/2005 8:39:43 AM EDT

[#22]

The matching thing is nice on the 401K's but crunch the numbers and be sure you would not be better off contributing to your ROTH IRA instead. You may be better off in the long run with the ROTH even though the company is throwing in a %.

Posted: 12/17/2005 9:00:51 AM EDT

[#23]

The wife and I are both able to contribute 20%. We're also contributing to a couple of 529 plans for the kids future college expenses. Of course, this means that we can't go out and just purchase big items on a whim, but that's ok. It keeps us on a budget.

Like others, I would definitely at least put in what the company matches, then bump it up a percent (or 2 if you can) every year.

Posted: 12/17/2005 9:08:39 AM EDT

[#24]

The most allowed by law. (20%?).
Savings and investment should be your first priority 'bill'. Treat it like a bill and it's much easier to save. The fucking electric company can wait if it has to.

Posted: 12/17/2005 9:17:23 AM EDT

[#25]

Man, you guys are lucky that your employer matches your contributions - we don't have that plan.

Posted: 12/17/2005 9:18:05 AM EDT

[#26]

Quoted:
Man, you guys are lucky that your employer matches your contributions - we don't have that plan.

First place I been that does it

Posted: 12/17/2005 9:22:19 AM EDT

[#27]

Put in the MINIMUM that will give you the MOST free money from your employer.

My employer used to match 3%, and last year they upped it to 4%, so I upped my contribution. Once I'm out of debt, I probably will up that to 6-10%. I think in 03, my return was 20%... this year, my 401k is LOSING money...

Posted: 12/17/2005 9:27:23 AM EDT

[#28]

Quoted:
Put in the MINIMUM that will give you the MOST free money from your employer.

My employer used to match 3%, and last year they upped it to 4%, so I upped my contribution. Once I'm out of debt, I probably will up that to 6-10%. I think in 03, my return was 20%... this year, my 401k is LOSING money...

+1 what he said. And spend the savings on more ammo for the fort. Wolf 7.62 went up more this year than my 401k in the last 5.

Posted: 12/17/2005 9:28:22 AM EDT

[#29]

Quoted:
I put in 10%

ditto

Posted: 12/17/2005 9:31:45 AM EDT

[#30]

Quoted:
Quoted:
Put in the MINIMUM that will give you the MOST free money from your employer.

My employer used to match 3%, and last year they upped it to 4%, so I upped my contribution. Once I'm out of debt, I probably will up that to 6-10%. I think in 03, my return was 20%... this year, my 401k is LOSING money...

+1 what he said. And spend the savings on more ammo for the fort. Wolf 7.62 went up more this year than my 401k in the last 5.

I sold some of my 7.62x39 too

Posted: 12/17/2005 9:44:33 AM EDT

[#31]

Quoted:
Take advantage that you may put $15-k into 401-k plans for 2006.

I just checked and there is no limit for 2006 for Govt employees. Just be careful not to put in the 15k too early or you are wasting the matching for the rest of the year.

I personally put in 15% with the first 5% matched. Essentially 20%

As most have said, work it up so eventually you don't even miss the money.

Posted: 12/17/2005 9:46:13 AM EDT

[#32]

Quoted:
I got my benefits stuff at work, they match 50% up to 4% total of thje 401k, I put in for 8% to go to it so I would get the full 4%.

Whats normal or a good amount, to put in, I can always change in 3 months.

MAX IT OUT

it is free money. take it.

Posted: 12/17/2005 10:10:06 AM EDT

[#33]

Quoted:
Quoted:
Take advantage that you may put $15-k into 401-k plans for 2006.

I just checked and there is no limit for 2006 for Govt employees. Just be careful not to put in the 15k too early or you are wasting the matching for the rest of the year.

I personally put in 15% with the first 5% matched. Essentially 20%

As most have said, work it up so eventually you don't even miss the money.

__

Good point. I keep it at 12% -- dollar-cost-averaging 'till I hit the limit in August. Also max. out my IRA even though I can't deduct it. With what I add to my after-tax ESPP, my savings rate is ~ 20%.

Posted: 12/17/2005 10:21:42 AM EDT

[#34]

I do 15% currently with 6% match

Posted: 12/17/2005 10:23:33 AM EDT

[#35]

15%

Posted: 12/17/2005 10:34:50 AM EDT

[#36]

I'm @ 15% with $.30/$1 matching.

Going to up it to 18% for 2007

I'm playing catchup as I didn't get my IRA restarted till I was 40.

( prior IRA package was robbed to cover major medical expenses )

Posted: 12/17/2005 10:37:12 AM EDT

[#37]

Also dont forgot the ROTH IRA catch up, up to $15k for certain professions. $3k a year. I believe there is no income limit for this. Healthcare is one.

Posted: 12/17/2005 10:41:15 AM EDT

[#38]

Quoted:
Max it out every year.

As a 'simpleton', I max it out every year as well. Then again, I work for a living and don't expect free hand-outs from the gov't feed trough.

Posted: 12/17/2005 10:45:01 AM EDT

[#39]

I thought dividends earned were tax free right now? IRAs don't count?

Posted: 12/17/2005 10:45:31 AM EDT

[#40]

Quoted:
Quoted:
Max it out every year.

As a 'simpleton', I max it out every year as well. Then again, I work for a living and don't expect free hand-outs from the gov't feed trough.

Doctors are extremely simple when it comes to finances. I max it out before I take home my pay. That way I wont even think about spending it.

I have a tendency to spend what is in front of me. If I dont have access I dont spend it.

The hospital recently trashed their traditional retirement plan and started a 401k matching plan. The funds were mediocore but they hospital kicked in another 6k. So its becoming a decent nestegg.

Posted: 12/17/2005 10:46:43 AM EDT

[#41]

Quoted:
Max it out every year.

That's my plan, when I finish my degree. A few companies I am looking at double (200% other 150%) your 401K contribution up to 20% (max) of your salary. By not contributing the max it is like throwing away money. So say you only put in $10,000 starting when you get out of college, and never put in more than 10K. After 20 years at say 6% you are at 10,000 x 36.7856 = $367,856 which is a decent start, but hold on one minute, with company contributions... 10,000 (lets match 100%) 20,000 x 36.7856 = $735,712!

Posted: 12/17/2005 11:03:53 AM EDT

[#42]

The sad part of all this is that I dont know any old doctors. Most us are dead by the time retirement comes around. We have a habit of croaking young. I should really cash out all the 401k money and buy a Porsche.

Posted: 12/17/2005 11:17:32 AM EDT

[#43]

Give it till it hurts. Learn to live on what's left, you'll be surprised at how easy it is and after a while, you wouldn't miss the money you're socking away. Many moons ago, I was socking away the max and then my company informed me I'm a HCE after hitting the threshold so now all my contributions are capped at 7% which sucks. Put away the maximum while you can.l

Posted: 12/17/2005 11:32:52 AM EDT

[#44]

MAX IT OUT and nothing less.

Every cent put into your retirement means the sooner you can stop working. The more you put in now (whether your company matches it or not) the younger you will be able to retire. Putting in less now means you will retire older.

Posted: 12/17/2005 11:41:26 AM EDT

[#45]

If your company matches or matches by % then you're wasting money if you're not doing atleast that. Otherwise I've always done 10-12% but even moreso I contribute the maximum I can afford. I started my 401k at 23y/o and I still wish I'd have started it earlier.

Posted: 12/17/2005 12:48:15 PM EDT

[#46]

Put in at least what they match. Take any raises and put that percentage away if you're currently living comfortable. Put away as much as you can. I think I'm up to 12 now.

Posted: 12/17/2005 12:50:08 PM EDT

[#47]

Quoted:
Also dont forgot the ROTH IRA catch up, up to $15k for certain professions. $3k a year. I believe there is no income limit for this. Healthcare is one.

___

Roth does carry limitations based upon income. Certain professions may qualify...though very few.

Posted: 12/17/2005 12:53:56 PM EDT

[#48]

Quoted:
Put in at least what they match. Take any raises and put that percentage away if you're currently living comfortable. Put away as much as you can. I think I'm up to 12 now.

___

If your not putting away $15-k into your 401-k, you're losing out. If you're not putting the max into your IRA (tax-deductible or not) you're loosing out.

Posted: 12/17/2005 1:09:21 PM EDT

[#49]

My company doesn't match since we have a pension fund as well, but I'm putting in 5% and I have my rate set to raise 1% every six months.

Posted: 12/17/2005 2:15:21 PM EDT

[#50]

Don't forget to take out 401k loans and buy those MachineGuns you always wanted.

I've done it twice.

[ARCHIVED THREAD] - Good % of pay to put in 401k? (Page 1 of 2)

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