Need your opinion on 401k contribution at 53

[DaveinMtAiry]

Originally Posted by Hefe

If at all possible I would max out your 401k contribution, but at least meet the employer's match - it's free money! I would suggest that if your mortgage has a low interest rate that you don't pay that off early (you're also getting a tax deduction on it) & put your max contribution $$$ in the 401K & if possible start a Roth as well. $55K @ 53yo is kinda thin tbh.

If the 401K has a low cost Index Fund, typically an S&P Index fund, put 60-70% into that & the rest in a bond fund. The last few years I was contributing 25-30% of my gross to my retirement accounts, my only regret, now that I just retired, is that I didn't start a Roth earlier & max it out always.

This is the best post in the thread. The opening poster is contributing 15%, that is a lot considering he/she still has a mortgage. If you can afford more that would be great but maybe that's not possible.

Now we get to the investments offered in the 401. If you would like to post your options we'd be happy to help. Some of the language disccussed here may he confusing to the opening poster. A "load" is a sales fee, an index fund is a very low fee fund that invests in every stock in it's index, in this case all the stocks in the S&P 500. It is the way to go according to most investment experts. At your age I would not take the suggestion of all cash, it pays nothing and is a losing proposition once inflation and later taxes are considered. Bond funds are a good way to offset the ups and downs of stocks. At your age I would suggest 30% in bonds, the rest in stocks. Remember you don't die when you retire (hopefully) so to make that money last for another 15-30 years you need exposure to stocks, by far the highest returning investment over the long term.

[IDtheftV]

Originally Posted by DaveinMtAiry

This is the best post in the thread.

This is a close second though. Very good summary for the OP. Thanks.