How much should you save in your 401K before your 30? (pay, company)

[ddmhughes]

I know there is no exact answer for this but how much do you think someone in their late 20s should have in their 401K? If you don't know how much what do you think is typical? I have a little over $9,000 is that good? What should I aim for?

[girlbuffalo1]

I have around $15K after the recent hits (I am 27) and think I should have much more--I have friends here at work who have probably double what I have...

[chet everett]

The formula that some retirement calculators use is either biased toward the value you HOPE to have at retirement and often has more than slightly unrealistic target rates of return OR biased toward the MAX you can put in, either as percentage of salary or allowable limits, and assumes you KEEP putting that in and getting smallish returns. I doubt either is accurate. Most people I know TRY to max out, but then they either have unexpected expenses (everything from wasteful spending to rent increases to car wrecks and kids...) or freak out over down turns and dial back JUST WHEN THEY SHOULD be going for depressed bargains.

SO, I guess what I suggest is to "save as much as you can as early as you can" AND try not to ever dial down OR move too radically away from the area that have the most potential for growth / gains.

The important benchmark is NOT what other people do. You should evaluate the RETURN you get on the money you have put into the 401K. If your money is not growing as well as it would in "unmanaged" indexes like the DJIA or S&P Wilshire 5000 then you you have the wrong funds. At 30 you have a long before you can take anything out and lot of time to rebalance as you get more concerned over protecting gains.

[8 SNAKE]

Originally Posted by ddmhughes

I know there is no exact answer for this but how much do you think someone in their late 20s should have in their 401K? If you don't know how much what do you think is typical? I have a little over $9,000 is that good? What should I aim for?

No, $9,000 in a 401k at age 30 is not good. With that said, it's probably better than a lot of people are doing.

What percentage of your income are you setting aside for retirement? At what age do you plan/hope to retire? What do you project your income needs to be once you hit retirement? These questions are far more important than the typical 401k balance of a 30-year-old.

[drjones96]

Originally Posted by ddmhughes

I know there is no exact answer for this but how much do you think someone in their late 20s should have in their 401K? If you don't know how much what do you think is typical? I have a little over $9,000 is that good? What should I aim for?

It all depends on your situation really.

Say if you made $30k/yr and you're able to put back 4% of that starting when you're 25....by the time you're 30 you could have contributed $6000. If your company matched it or had a nominal amount they paid in you'd have that much more. So you could possibly have double that. This doesn't take into account earnings or losses associated with the stock market. (I lost about 30% at one time last fall.)

So to ask if $9k is good without seeing the whole situation it's kind of hard to judge.

[cardinal2007]

You're already old, and have only 35 years left until you retire, you should have a least $60k, I'm just kidding, your question is hard to answer without more information.

I think it all depends on how much things cost where you live, and where you hope to live in retirement, and how much you're earning now. I am 27, have $32k in the 401k, and about another $23k in IRAs, but I earn a significant amount of money (not for the area though), but things here cost A LOT.

What social security pays tappers of a lot as your income goes up, so if you're living comfortably in a low cost area for 45k, or comfortably in a high cost area for 90k, with SS the person in the low cost area will (probably) be comfortable with their benefits. But the person making 90k doesn't get twice as much, so they may not be as comfortable, and has to have other savings, or he/she can move to a low cost area in retirement. Of course you don't know what the retirement age for SS will be in 35 years, or if COLA will still track CPI, so you can't count on that.

But really it depends on what standard of living you want for then, will you own your own place outright, how much are you making now, how much do things cost there, do you think you will need to pay for assisted living when you get old. Many questions.

[bassholic]

you do realize that there is a difference between a person making 30k and 119k and what each can save right. Retirement is based on what you will need to live off of to live the same lifestyle

[wheelsup]

My average wage since college is $15/hr ($30k) and I have around $65k split between my 401k (traditional and Roth) and Roth IRA. And I think I am way behind the curve, I hope to have 100k by the time I am 30. I just recently turned 28. My wife has a paltry $3k but hey it's something I guess.

[long101]

Its really an opinionated question. If you are planning to have your income rise by quite a bit in the future I would say you are fine. If you think you will continue to make x amount of dollars for quite sometime I would say cut back somewhere and up your contribution.
Im still in my 20s and actually just stopped my contirbution yesterday to get some more cash in my emergency fund. I would rather know Im covered short term and have a couple less grand in the end. My work no longer contributes to mine so it kinda blows

[M3 Mitch]

If you have been working steady from 20 to 30, bare bones minimum you should have one year's worth of salary in your 401K - assuming you put in 10%, and didn't lose money on your investments.

$9K in your 401K at 30 is essentially planning to live in a cardboard box when you are 70.

Sorry to be harsh, but the reality of continuing on this course is much harsher.