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Started By
Message
just started my first real job out of college (401k advise)
Posted on 6/12/14 at 10:11 am
Posted on 6/12/14 at 10:11 am
A 401k is one of the benefits. They match 1/2 of up to 6% of your salary. Annual contribution cap is higher than I'll be able to reach any time soon. I make mid 50s right now. Living expenses are still pretty low (housing and utilities around 550/month, short commute, I don't drink a lot, ect).
What percent of my salary should I be putting in my 401k?
What are some good financial products to invest in with it?
Hypothetically If I were looking to be able to get married and get a starter home (or rent a home large enougg to be one) in BR inside of 2 years, how would that change the approach?
What percent of my salary should I be putting in my 401k?
What are some good financial products to invest in with it?
Hypothetically If I were looking to be able to get married and get a starter home (or rent a home large enougg to be one) in BR inside of 2 years, how would that change the approach?
This post was edited on 6/12/14 at 10:16 am
5
Posted on 6/12/14 at 10:15 am to kingbob
Contribute the 6% so you get the full match of your company.
If you still want to invest, open a Roth IRA. You'll be able to contribute up to $5500/year to that.
Completely depends on what options are available to you. Some 401(k) plans are incredibly limited. I would however, google an Investor Profile to figure out your specific risk tolerance before you pick any investments.
If you still want to invest, open a Roth IRA. You'll be able to contribute up to $5500/year to that.
quote:
What are some good financial products to invest in with it?
Completely depends on what options are available to you. Some 401(k) plans are incredibly limited. I would however, google an Investor Profile to figure out your specific risk tolerance before you pick any investments.
Posted on 6/12/14 at 10:19 am to GoCrazyAuburn
It's through Merril Lynch, but I haven't gotten to look at all of the options yet.
Posted on 6/12/14 at 10:49 am to kingbob
I would put 6% of my salary in your company’s 401k and another 4% into a Roth IRA. Every time you get a raise increase the Roth contribution by another 1%. For the Roth I would go with Vanguard Total Stock Market Index Fund.
Of course you need an emergency fund but some will say your Roth could fill that purpose.
Of course you need an emergency fund but some will say your Roth could fill that purpose.
Posted on 6/12/14 at 11:03 am to GoCrazyAuburn
quote:
Contribute the 6% so you get the full match of your company.
this, and no more imo. fees are likely to be significantly higher for your 401k options as opposed to what you could get with index funds. for a young investor, this would take a significant bite out of your long term earnings.
Posted on 6/12/14 at 11:09 am to kingbob
VTSMX
As much as you can afford while still being able to have fun
As much as you can afford while still being able to have fun
Posted on 6/12/14 at 11:19 am to kingbob
Put as much as you can towards retirement.
As others have said...
(1) get your 401k match (6%)
(2) max your roth ira ($5500/yr)
(3) contribute anything else you can to your 401k
I just started my career a few years ago and was in a very similar situation as you (low 50s, same match, etc.) and I contributed 10% to Roth 401k and maxed out my Roth IRA ($5500).
You should be able to do the same and live a decent lifestyle, especially with your low expenses. My rent/utilities were closer to $800/month and I drank a lot. I also had a long distance relationship where I drove 600+ mile roundtrips every other weekend for a year (on top of the normal relationship related expenses... but hey, now I'm engaged so
or 
- not sure which one)
As others have said...
(1) get your 401k match (6%)
(2) max your roth ira ($5500/yr)
(3) contribute anything else you can to your 401k
I just started my career a few years ago and was in a very similar situation as you (low 50s, same match, etc.) and I contributed 10% to Roth 401k and maxed out my Roth IRA ($5500).
You should be able to do the same and live a decent lifestyle, especially with your low expenses. My rent/utilities were closer to $800/month and I drank a lot. I also had a long distance relationship where I drove 600+ mile roundtrips every other weekend for a year (on top of the normal relationship related expenses... but hey, now I'm engaged so
or - not sure which one)Posted on 6/12/14 at 11:35 am to kennypowers816
quote:
but hey, now I'm engaged so or - not sure which one)
I'm saving up for a ring as well. I'm thinking I'll pop the question next spring during baseball season (first date was an LSU baseball game).
Posted on 6/12/14 at 11:40 am to kennypowers816
One other note: Find out what the cheapest (fees) fund is in the 401k. Most companies have a bunch of crap funds with high fees, often you can best counter this by only buying the single lowest fee fund with your 401k funds and then balancing your mix with the money in your other accounts not tied to your employer.
ex. my employer has a bunch of funds with 1.5-2% fees from Principal, I only buy shares of their S&P500 fund as it has the lowest fees at 1.03%. Vanguard's S&P500 fund charges a .05% fee, nothing like paying over 20 times the rate available to you as an individual.
I only stomach buying that one to get the match. The day I leave this employer my money will be going with me and out of their crappy 401k plan.
ex. my employer has a bunch of funds with 1.5-2% fees from Principal, I only buy shares of their S&P500 fund as it has the lowest fees at 1.03%. Vanguard's S&P500 fund charges a .05% fee, nothing like paying over 20 times the rate available to you as an individual.
I only stomach buying that one to get the match. The day I leave this employer my money will be going with me and out of their crappy 401k plan.
Posted on 6/12/14 at 12:51 pm to GoCrazyAuburn
quote:
get the full match of your company
Posted on 6/12/14 at 1:23 pm to PlanoPrivateer
quote:
Of course you need an emergency fund but some will say your Roth could fill that purpose.
Plano-Do you disagree with the idea of holding your emergency fund in your Roth?
Posted on 6/12/14 at 1:25 pm to kingbob
quote:
I'm saving up for a ring as well
Goodluck!
As for fund choices, I agree with the other poster who said to look at the fees with your fund choices in the 401k. Normally your options are limited and some of the choices are just stupid.
If you decide to open a Roth IRA, personally, I would think about opening one at vanguard and using their family of funds. My IRA is about 40% VTSMX, which is a total stock market fund. IMO, its a good index fund for people our age.
Posted on 6/12/14 at 2:36 pm to BreakingTheBank
quote:
Do you disagree with the idea of holding your emergency fund in your Roth?
i'm building mine now, but i think i'm going to keep a couple thousand in a traditional savings account and put rest in roth. i'm going to allocate a portion to low-risk funds as my emergency fund.
Posted on 6/12/14 at 5:21 pm to BreakingTheBank
quote:
Plano-Do you disagree with the idea of holding your emergency fund in your Roth?
I don't disagree with it but I don't do it.
Posted on 6/12/14 at 7:09 pm to kingbob
Advice vs. Advise.
If you want advice, I advise you... actually the above posts made solid sense. Contribute as much as possible.. at least up to the company match.
If you want advice, I advise you... actually the above posts made solid sense. Contribute as much as possible.. at least up to the company match.
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