I can’t remember the max I could put in, but I contribute the 6% that my employer will match - that’s a no-brainer. I give myself a 6% raise and wind up putting 11.3% of the result in the 401(K) portfolio. And, I’m 51.
And, as long as y’all are contemplating one’s relationship with their 401(K) plan, I’ll add that I cashed out the 401(K) plan I had with the company for whom I went to work when I graduated from college in my twenties to help capitalize a business I started in my mid-thirties.
Would I do it again? Perhaps. But that’s a risky course that I’d hesitate to counsel to anyone.
I contribute 6% of my pretax income, and the State of Michigan matches 4%. I also started a Roth IRA as a birthday gift to myself in April and put $150 into that each month. I’m 22 years old.
Most of you contribute more than me, but you’re older and don’t have as much time to save. Would you guys recommend I contibute more, like 9 or 10 percent?
I would say it’s a good idea if you can do it. You’ll get used to not having that money while you’re young so you won’t miss it. Plus money that gets invested while you are young has that much longer to get interest, which means a thousand dollars invested when you are 22 is worth a whole lot more than that same thousand when you are 50. Someone can come along and tell you the difference who is better at figuring out compound interest than I am, but my financial advisor told me that you are better off investing for ten years from age 20-30 than investing for 30 years from 30-60.
The only reason I would say to hold off is if you have tons of other bad debt (like high-interest credit cards, not things like student loans) that you should put that money towards first.
3% of pretax income, just enough to get the full company match.
I was at 6% till summer this year, but I have credit card debt I’m paying down, plus despite my working there since 2001, the outfit I work for hasn’t even done a COLA in all that time.
That reminds me, I need to talk to my bosses about that…
My employer offers a 457 plan, no matching, but really good funds. I’m close to the max; I think it works out to about 15% of my gross income. Wish I’d deducted the max all along.
For those of you who aren’t saving a lot or aren’t sure about how to save, plan, etc. check out the retirement savings thread that is running concurrent to this one.
GT
When I retired I even looked into moving to Mexico. You can live cheap and their medical care is just a fraction of ours (the doctors are trained here). There are areas where the weather is great all year long and real estate is cheap (laws have been changed so you can get a legit title). Anyway, you are right about the 15 to 20x being high, but that is better than doing it the other way, which too many people seem to be doing.
You get 100% matching on your 12% of contributions? That’s really generous. I want to work where you do.
This is true. For example…
Kelly invests $100 per month, from age 25 - 35. Total contribution is $12,000.
John invests $100 per month, from age 35 - 65. Total contribution is $36,000.
At 8 percent annual rate of return, at age 65…
… Kelly has $201,400, a return on investment of 16.78
… John has $150,030, a return on investment of 4.17
Obviously, the even better course of action is to start young and continue to contribute until retirement to get the biggest nest egg.
It’s also efficacious to have an aggressive growth portfolio when you are young and gradually lower it to a conservative growth portfolio as you near retirement.
34 yo.
I contribute 10% of my income to my TIAA-CREF account.
My employer contributes 9% of my salary to the same TIAA-CREF account, though it is technically not a match. They will contribute 9% even if I contribute nothing. A VERY nice benefit.
So combined I am squirrelling away 19% of my income, but I only have to give up 10% out of my pocket.
I don’t have a 401K. As a state of Alabama employee, I make a mandatory 5% contribution to the state’s pension plan. I put an additional 27% into a section 457 plan. I intend to bump that up to 29% next year. I’m 38 yo. (It is my intention to quit my job at 40 and live out a midlife crisis until the money runs out, and I have to get another job).
19% - 50% of first 4% employer match. In the nearly 3 years I’ve been contributing, the value of my 401(k) is over half of what my husband has in the last 10 years. Despite the heavy losses I had in the first year.
I do, but there is a dollar limit to what they match, which probably only affects high salary employees, which I’m not. (I don’t have any info on hand, but I want to guess and say $50K??)
It is very generous, and since they offer it, it’s one of the reasons I like to try and keep my contribution as high as possible.
I have always been so impressed with the company’s benefits package. It is absolutely incredible.