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I come from a pretty frugal family and we always believed in saving until I moved to California. I spoke with some co-workers and they all contribute 6%, which is the max. matching limit set by our employer.
If it were up to me, I would contribute the max of 30% per pay check so I hit the $16k 2009 max. Am I missing something that would preclude people from saving and maximizing their tax benefits? Apart from them having more urgent needs (e.g. buying a car, new family) doesn't it just make sense to save and put away the max. amount of money?
While I believe it is important to save for retirement, I also believe in living for the moment. You never know what will happen that might make retirement not come true. I save money, but I also enjoy life - movies, vacations, concerts. I could go without some of those and save more, thus having more at retirement, but then what do I do when I retire? movies? vacations? concerts?
Location: Georgia, on the Florida line, right above Tallahassee
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Quote:
Originally Posted by azoria
Well lately, you could have contributed 16K and at the end of the year have 12K to show for it.
Answer your question?
I used to work for Caterpillar for 9 bucks an hour. 9 x 2080 = 18720. I did a lot of overtime for time and a half, though. I probably made at least 23.5K a year. With a wife and 2 kids ....
Yeah, I was all about maxing a 401K.
I used to work for Caterpillar for 9 bucks an hour. 9 x 2080 = 18720. I did a lot of overtime for time and a half, though. I probably made at least 23.5K a year. With a wife and 2 kids ....
Yeah, I was all about maxing a 401K.
Exactly............from what I see people in California(where the OP now lives, correct?...as do I) are about two things.
1. Make $3000/month.........can afford your 30% or even 10-15% towards a 401K....but have to drive a BMW, buy new clothes and go out.
2. Make 1800/month.........can afford 3-6% per pay period and are barely scraping by to meet rent and pay on their 1998 Honda Civic they bought used for $4500.
I only contribute 6%........and after employee match, which is never 100% for any amount........I get about $90...which consists of my contribution and the companys. So about $2160/year for someone who makes $26k/yr isn't bad IMO.
I stopped because it was throwing good money after bad...
35 of the 36 fund choices are down from 10 years ago... the lost decade as some call it.
My employer stopped profit sharing and all 401k contributions "Temporarily" 4 years and has not resumed...
In 10 years, the company switched 401k administrators 3 times... although many of the funds remained unchanged.
The straw that broke the camels back was when I found out their was a Money Market Fund not listed on any of the distributed plan information and my Account Rep still hasn't been able to explain why... not too mention high management fees...
Last edited by Ultrarunner; 02-10-2009 at 12:34 PM..
Well, count me in as one who maximizes 401(k) contributions. Yes, even in this bad economy. I think people who stopped investing now are incredibly short-sighted (assuming they still have the same income). I'm taking the long-term view: I'm buying up lots of shares that will most likely rebound at some point between now and when I retire. I'm taking advantage of doing this investing pre-tax, so I pay less in income taxes.
Of course, I'm able to do this primarily because I live below my means. I don't need every penny of my paycheck to make ends meet.
Well, count me in as one who maximizes 401(k) contributions. Yes, even in this bad economy. I think people who stopped investing now are incredibly short-sighted (assuming they still have the same income). I'm taking the long-term view: I'm buying up lots of shares that will most likely rebound at some point between now and when I retire. I'm taking advantage of doing this investing pre-tax, so I pay less in income taxes.
Of course, I'm able to do this primarily because I live below my means. I don't need every penny of my paycheck to make ends meet.
With no company match and limited investment choices.... why wouldn't a Tax Deferred IRA with a company like Schwab be a better option for most of us?
If you are in position to save the best tact is probably to 1) maximize the employer 401k contribution, 2) maximize a Roth IRA, 3) then evaluate tax defered (IRA) investments vs. taxable investments.
What you invest in may be the more important question... not all 401Ks give you a good selection of investments.
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