401k averages? Saving too much or too little?

Not knowing anything about your personal situation...
I do not advise anyone save more than what you can receive as a maximum matching contribution. Saving 17500 in tax delayed account without having adequate liquidity, insurance, and consumer debt control is not a wise move.

The figures listed seem pretty high. I personally think people should be aggressive with paying off loans and investing for their future right out of college. Yet, maxing out the 401(k) seems pretty unattainable for most of my friends, much less my parents' generation. The problem I see several of my friends suffer stems from them not making enough money to afford paying loans and investing at the same time.

Ultimately, being able to contribute to retirement is a big accomplishment that should be a goal for everyone. Maxing out retirement vehicles is a step up, and in my opinion requires financial stability in regards to emergency fund, loans paid off, and being able to save towards purchases such as a home.

Just a little background information.

I am a single 27 year old with the only debt of a house. When I graduated from college I was debt free with no credit (thankfully my parents were able to pay for my college and they have taught me not to live in debt). For the first 2 year I maxed out my 401k ROTH by putting 25% in each pay check. I was able to also save for a down payment of a house within the first 3 years.

After year 2 I did reduced to 8% into my ROTH account and now back around 9-10%.

I have a 1 year worth of income in my emerency (do not touch fund). I have a few other additional saving accounts.

I have an great example with my parents they own their own houses, pay their cars in cash, paid both of their childerns college funds and living.

I will be adding possible new debt to my name of a new car within the next year or two. I am trying to save the best I can for that, but having some issues with my mortgage since I have to save for my own land tax & home owners insurance.

I am just trying to figure out if I should not put as much into my 401k for a little bit to save up for the new car, but I can not below my companies match (I have to put a min of 6%). I went to look and see if I was on track or ahead.

Thanks to everyone for their input and advice.

Not calling you a liar but how the hell did you: 1. Max out your 401k, 2. Save money for a downpayment 3. Save one years salary all in 3 years of working. That honestly is impossible unless you managed to live with your parents and they paid for food and everything the first three years

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This article said one should save $17,500 a year and your first year you should have saved between $8000-17,500

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I was on the low end of that spectrum my first year out of grad school after contributing 8% of my income to a 401k. I can't get your link to work, but think it depends entirely on your situation and your income.

Lately, I've been contributing 12% of my income (employer matches 8%) and maxing out my Roth.
I am not meeting my personal (non-retirement) savings target now and I am almost certainly going to back down my 401k contributions at least for a while.

Oh no it is okay to call me out if you think it. But here is the truth:

1) I got a job after college that paid me to move there and gave me an extra month salary for the move. The move cost me nothing, since I had family and friends helping me out. And yes, I did live with my parents for a while. I also ended up moving to a city where I knew no one. My parents ended up moving to GA while I was in college, and I ended up getting a job there.

2) My job required a lot of paid overtime for those first 2.5 years. I was lucky and very blessed. I was working at least 10 hours of overtime each week, and in my mind that was extra money just for savings not spending. I knew my next job, or if they choose to cut the overtime, would not be a part of my salary. Also my job gives out a 'bonus' each year, I have never planned for this bonus because it depends on how the company has performed, if they are within budget, and along with many other factors. This bonus can range from 0-10% of my yearly salary pay and again went straight into savings, after I bought something I been wanting that year.

3) While in college I had lots of odd and end jobs that I would save and never used that was easy enough for a down payment since in college (thankfully) my parents paid for my means of living, school, books, etc. I was in school for 5 years always had a job and did a lot of tutoring.

4) While living with my parents the time I did, I paid for my own food, phone, car insurance (since they bought it when I was in my second year of school... I didn't have a car until then), gas, maintenance on the car, and trips/vacation. I was very lucky to have them on my side and their help when I first started out. My parents told me if I lived with them I was to max my 401k out and save a paycheck a month.

5) When I turned 18 my grandmother had a trust fund for each of her grandkids, while I never have touch it and it went straight into savings.

I will agree on what some people have posted and said on other subjects, but I was lucky to have my parent’s support me while in school, let me work my jobs, and them still paying for my education and everything else while in college.

Now I will say it was a completely took me by surprise when I had moved out and out of state having the bills and redirecting my money and spending habits. I will say the first year of being out on my own and with owning this house has taken most of my 'play/vacation' money down.

But really what helped me the most was living with my parents, saving in college (5 years there), having all that overtime, & the trust fund.


I have so much respect for those who have to work their way thru college on their own and battling the everyday life.

I am still trying to learn to live without something that I never truly have done much before. Yes it was good and bad living with my parents for the time I did. I will say not only with savings did it help, but also gave me a new respect for my father and mother. I also was able to understand my father more, and became closer to him. I have always been close to my mother.

Now I am having a hard time saving now and see what everyone else had to go thru at a younger age, but I am learning and seeing. I just wanted to make sure I was on an okay path. When I came across that article I just could not have imaged nor did I receive that pay when I started out. It seem a little (way) to high for me and for others.

Not being rude or mean but thanks for calling me out I believe more people should speak their mind respectfully and others just should be more honest. Again thanks for speaking your mind and calling me out when you thought that. I hope that helped clear something up for you. Now if only we could call others out; and knowing if they would be honest or not back. The worst part of the internet is never knowing if someone is telling the truth.

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Now I am having a hard time saving now and see what everyone else had to go thru at a younger age, but I am learning and seeing. I just wanted to make sure I was on an okay path. When I came across that article I just could not have imaged nor did I receive that pay when I started out. It seem a little (way) to high for me and for others.

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Gotch. You are doing fine. As long as you are funding a 401k and still saving more money then you are spending you are doing fine. Alot of times you will feel like you are doing bad compared to your friends or others, but that is because most people arent honest when you ask them how much they save

shite i wish i could max out my 401K but wife doesnt work and 2 kids in private. Now in 4 years when no kids are in school that might be a different story.

Now im puttng $4800 a year with he company matching 3% of my salary

$17,500 is employee contribution only


Good question. I always thought it was including employer match.


And now you know.....

In my opinion, the true "nut" of the 401k is the getting out of paying the high tax rate on that money now, combined with withdrawing that money at a lower tax rate later. The difference in tax rate is the key. If you think you will get a decreased tax rate, then by all means, save the max in the 401k.

Hope that helps. By reading your story, I'm sure you will do well.

ETA: and I agree with the poster that said you need to have less than a years salary in emergency fund and the rest of that money needs to be seeking a higher ROI.