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Message
Retirement Contributions. Do you agree with this chart?
Posted on 6/22/18 at 1:45 pm
Posted on 6/22/18 at 1:45 pm
How much should you contribute to your 401(k)?
Level...................Contributions
1 (No employer match)...5% of salary
1 (With employer match).Max % employer will match
2 ......................Max % employer will match plus Roth IRA
3.......................Roth IRA plus 10% of salary
4.......................Roth IRA plus 15% of salary
Maximum ................Roth IRA plus annual 401(k) maximum
_______________________________________
I currently contribute 8% to a Roth 401k. My company matches 5%. Should my additional 3% and any future increases be going towards Roth instead.
Yes, I have 4 months emergency expenses and no high interest debt
Level...................Contributions
1 (No employer match)...5% of salary
1 (With employer match).Max % employer will match
2 ......................Max % employer will match plus Roth IRA
3.......................Roth IRA plus 10% of salary
4.......................Roth IRA plus 15% of salary
Maximum ................Roth IRA plus annual 401(k) maximum
_______________________________________
I currently contribute 8% to a Roth 401k. My company matches 5%. Should my additional 3% and any future increases be going towards Roth instead.
Yes, I have 4 months emergency expenses and no high interest debt
6
Posted on 6/22/18 at 3:37 pm to LSU6262
My opinion for what it is worth is to contribute the maximum the company will match, then max out a Roth IRA, then if you have the money max out the 401K. My reasoning is this, I am retired, a lot of the money I live on was in 401K tax deferred accounts which means it is now being taxed as regular income as I withdraw it, whoever said this was a good idea because you would likely be in a lower tax bracket when you retire was full of it. I wish I had maximized my opportunities for tax free growth and income when I was saving for retirement.
Posted on 6/22/18 at 5:43 pm to LSU6262
Take advantage of all company matches you can in whatever accounts. This is free money.
Once you've done that, max the Roth.
Then you can work on maxing other accounts. Personally I think the HSA (if that's available) takes priority over the 401 because if you manage things properly your HSA is entirely tax free, both on your contributions and withdrawals. Plus you can tap it if you need to for qualified medical expenses at any time.
Once you've done that, max the Roth.
Then you can work on maxing other accounts. Personally I think the HSA (if that's available) takes priority over the 401 because if you manage things properly your HSA is entirely tax free, both on your contributions and withdrawals. Plus you can tap it if you need to for qualified medical expenses at any time.
Posted on 6/22/18 at 6:55 pm to LSU6262
Forget the fricken percents if your goal is FIRE.
Get the match yesterday,
Max roth, then max remainder of 401 if you can or by putting in any raises you get. Get an HSA going if possible. Keep a good running balance in savings to cover emergencies. Put away some each month for car replacement, keep current vehicle until car notes are a thing of the past. Low cost, broad market index funds are suggested if those options are offered in the accounts, this will add up huge over time.
Get the match yesterday,
Max roth, then max remainder of 401 if you can or by putting in any raises you get. Get an HSA going if possible. Keep a good running balance in savings to cover emergencies. Put away some each month for car replacement, keep current vehicle until car notes are a thing of the past. Low cost, broad market index funds are suggested if those options are offered in the accounts, this will add up huge over time.
Posted on 6/26/18 at 9:16 am to LSU6262
the only thing I tend to agree with "for sure" is putting 15% pre-tax equivalent of your gross income from the day you get your first real job. How you divide the 15% up between traditional and roth is different for each individual.
Other than that, I don't think there is a good rule that can work as a generality. Everyone's situation is different.
Other than that, I don't think there is a good rule that can work as a generality. Everyone's situation is different.
Posted on 6/26/18 at 12:44 pm to LSU6262
piggyback question:
my work plan offers roth 401k contributions as well...
i think i'm going to half my current pre-tax contributions and go 50/50 with roth contributions
does anyone with a similar plan offering do similar?
i don't currently contribute to an IRA, though I guess I could with any additional funds after maxing 401K
i figure the benefit of going from 401k to Roth IRA is somewhat devalued when your company offers roth 401K, unless of course you are contributing more than 18.5k.
my work plan offers roth 401k contributions as well...
i think i'm going to half my current pre-tax contributions and go 50/50 with roth contributions
does anyone with a similar plan offering do similar?
i don't currently contribute to an IRA, though I guess I could with any additional funds after maxing 401K
i figure the benefit of going from 401k to Roth IRA is somewhat devalued when your company offers roth 401K, unless of course you are contributing more than 18.5k.
This post was edited on 6/26/18 at 1:03 pm
Posted on 6/26/18 at 10:32 pm to LSU6262
18,500/Annual Salary = percentage I try to invest
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