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Old 11-02-2018, 02:26 AM
 
Location: PA
33 posts, read 8,506 times
Reputation: 81

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Wish I got started at 23. Your gonna be set up nicely you keep it at 15% for the rest of the working years! Keep making those contributions, the larger it grows the more exciting it is to watch and imagine all the opportunities you are opening-yourself up to for the late years of your life.
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Old 11-02-2018, 04:43 AM
 
10,606 posts, read 12,146,850 times
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As others have said, contribute the maximum allowable while your expenses are low. If you get married, have kids, etc. you may have many years where you can't contribute nearly that much.


When you get to those years, stick with the minimum amount of contribution that allows you to get the full employer match. I am in my 50s now and I know several people my own age who didn't marry until their 30s but during their single life they maxed out their 401K contributions. Their accounts are looking VERY good now.
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Old 11-02-2018, 04:56 AM
 
Location: The Triad (NC)
28,522 posts, read 62,235,289 times
Reputation: 32222
Quote:
Originally Posted by chuk23chuk View Post
How much should I contribute to my 401k?
As much as is needed to MAX out the employer contribution deal.
Per RD: "$1620 + $2160 + $2160 (matching) for a total of $5940"
That's a terrific leg up...vbut 401K's aren't the limit of the savings and investment choices we have.


At $54,000 gross... that $2160 is only 4%.
What will you do with the rest of your save/invest budget...
The other 11% needed to hit the 15% of gross mark ($8100)?
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Old 11-02-2018, 06:09 AM
 
Location: Southern New Hampshire
7,233 posts, read 12,683,833 times
Reputation: 22060
Quote:
Originally Posted by RocketDawg View Post
The company will contribute 3% of your salary ($1620) whether you contribute anything at all or not.

Then, on top of that they'll match up to 4% ($2160) of your salary, if you contribute that much.
No, they will contribute 4% if the employee puts in 5%. (4%, the MAXIMUM company match, is the 80% match on the OP's 5% contribution.) This is what Petunia was pointing out; I just tried to make it even more explicit.

Quote:
Originally Posted by chuk23chuk View Post
Thank you sweet baby Jesus for breaking this down. Makes so much more sense now.
OP, contribute AT LEAST 5%, so you'll get the full company match.

Above that, contribute whatever you can afford. Since you're starting so young, you have lots of time for compounding. If I'd had that deal at 23, I could have retired early ... although I love my job so I wouldn't WANT to!
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Old 11-02-2018, 06:43 AM
 
25 posts, read 10,266 times
Reputation: 135
Wow, I wish I were that smart when I was 23!

Here's a good site to check out where you will be based on what you save per year.
The FourPercentRule Retirement Calculator

Based on $5,940 per year, with 2% increase every year, you'll have north of 1 million by the time your 59.

I totally agree with BumbleBeeHunter. Contribute enough to hit the max contribution from your employer, then put the extra into a ROTH. Your lower salary now means less of a tax hit on after tax contributions. Also, if you do setup a ROTH, try to setup automatic monthly contributions to it, out of your checking account or direct from your employer.
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Old 11-02-2018, 07:26 AM
 
Location: Tennessee
23,614 posts, read 17,598,460 times
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As much as you can reasonably afford to do.
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Old 11-02-2018, 07:31 AM
 
Location: Gulf Coast
284 posts, read 596,369 times
Reputation: 448
Quote:
Originally Posted by joee5 View Post
Put away now as much as you can without depriving yourself. You can always reduce it if you'd like if something unforseeable occurs in your future. Do it now while your young and you'll be very happy when you get older.
Good luck
^ This

You can always adjust it when life happens. I'm almost 37 and I wished I'd made better decisions. I've always contributed since I was 22 but the 1st couple of jobs, I had very little in there and stupidly cashed it out. I've only contributed 3-4%, switched jobs often (so I rarely was vested enough to keep all/some of my match), and had to pull $11k out to buy out my ex wife's portion of my house. Not a wise decision either, but my 3/2 home mortgage payment is cheaper than a tiny 1 bedroom apartment at the complex across the street....without going further into the details, I was/am able to recover from that now. Fortunately, I'm not past the point of being able to get myself back on track for retirement. Again, life can happen and throw your plan out the window; but save when you can, as much as you can, and you'll be better off.

I'm about to up mine to 10%. 15% is a little too tight right now as my (now) wife and I are looking to buy a house and need as much of a down payment as possible.

Good luck. You're on the right track.
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Old 11-02-2018, 07:31 AM
 
8,871 posts, read 5,143,460 times
Reputation: 10151
Quote:
Originally Posted by chuk23chuk View Post
Higher than 15%?! **** sake! I mean thatís based on the assumption I only ever make 54k forever. Iím hoping in some years Iíll be making much more


Editing to say I am 23 y/o
How much you make is irrelevant; it's all about percentage saved/spent.

Yes, it takes about 4 decades of consistently salting away 15% to retire to the same standard of living you had while working.

Spend some time to choose a reasonable asset allocation plan for your invested money and keep costs as low as you can. Give your nest egg its best opportunity to grow for you.
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Old 11-02-2018, 08:01 AM
 
8,871 posts, read 5,143,460 times
Reputation: 10151
Quote:
Originally Posted by Fooey View Post
Based on $5,940 per year, with 2% increase every year, you'll have north of 1 million by the time your 59.
.
And thats great, but dont overlook an extremely important detail: that's a million of today's dollars. If inflation averages 2% from now until OP reaches age 59, that million will be the equivalent of 500k today.. If inflation averages 3% from now until OP reaches age 59, that million will be the equivalent of 333k today. How well can one retire on 333k? A nest egg of 333k will provide annual income of 13.3k per year. Even with SS benefits and no debt, that is a lean retirement.
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Old 11-02-2018, 08:09 AM
 
206 posts, read 75,802 times
Reputation: 962
On the frontline show "can you afford to retire" the experts say 15% of pay is what you need to save. So save the max to reach that if you can. Many people live check to check and can't fund retirement at all.
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