Current Events > How much do you put towards your 401k?

(+) Yeah! (+)

Does it make sense to keep increasing the percentage you contribute?

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You want to aim to hit the limit your company will match to("free" money). After that getting as close to the 19k/yr you can afford to get to.

Mine was only around 50k before the economy bombed, now I try not to look at it. It will recover so I'm not overly concerned, but its still disconcerning seeing you've "lost" 10k

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AlCalavicci posted...

Does it make sense to keep increasing the percentage you contribute?

The general advice is that you should bare minimum invest up to what your company matches. I I want to say I remember reading somewhere that, as a general guideline, if you put in 10% starting in your twenties you will have more than enough to retire at 65.

You should also, if possible, split your retirement between a traditional 401k and a Roth IRA. They each have strengths and weaknesses but if you had to invest all into one of Roth is probably better because that has a cap on how much you can put in and above a certain income level I believe you can't invest any further in one.

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6% which is my company matches up to. Once my kid is all grown and Im more settled maybe Ill contribute more.

Something I just noticed from my last paychecks is that while your contribution is untaxed, your matching is not thus negating a bit the tax savings you get from contributing.

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I'm able to put in the yearly max.

JuanCarlos1 posted...

6% which is my company matches up to. Once my kid is all grown and Im more settled maybe Ill contribute more.

Something I just noticed from my last paychecks is that while your contribution is untaxed, your matching is not thus negating a bit the tax savings you get from contributing.

How are you coming to that conclusion? The matching never shows up in your paycheck.
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I work for the state and have to contribute 11.5% towards the pension plan.

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Definitely put in as much as you can. At least get the company match if you get one. You might want to contribute to a Roth IRA after the match and then put more money into your 401K after you max that.

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emblem boy posted...

How are you coming to that conclusion? The matching never shows up in your paycheck.

Right, but on my paystubs one of the taxes is for 401k contribution match, even though I dont see that money. So while im not getting taxed on my "100" contribution, I am getting taxed on the "75" the company matches towards my 401k. At least thats how Im seeing it?

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I only put in the minimum to max my company % contributions.

JuanCarlos1 posted...

emblem boy posted...

How are you coming to that conclusion? The matching never shows up in your paycheck.

Right, but on my paystubs one of the taxes is for 401k contribution match, even though I dont see that money. So while im not getting taxed on my "100" contribution, I am getting taxed on the "75" the company matches towards my 401k. At least thats how Im seeing it?

Weird, mine doesn't have that
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JuanCarlos1 posted...

Right, but on my paystubs one of the taxes is for 401k contribution match, even though I dont see that money. So while im not getting taxed on my "100" contribution, I am getting taxed on the "75" the company matches towards my 401k. At least thats how Im seeing it?

@JuanCarlos1 Talk to hr or payroll

https://humaninterest.com/blog/is-a-401k-match-contribution-tax-deductible/

Is a 401(k) match taxable?
Whether you have a Roth or traditional 401(k), though, employer contributions are taxed when you withdraw. Thats because even if you are putting your contributions into a post-tax (Roth) 401(k), all employer matches are contributions to a traditional 401(k).

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It all depends on how much my company is willing to match. I've heard "get it up to 10% with your company's matching program" but usually I just go 10% on my own.

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I Like Toast posted...

@JuanCarlos1 Talk to hr or payroll

https://humaninterest.com/blog/is-a-401k-match-contribution-tax-deductible/

Is a 401(k) match taxable?
Whether you have a Roth or traditional 401(k), though, employer contributions are taxed when you withdraw. Thats because even if you are putting your contributions into a post-tax (Roth) 401(k), all employer matches are contributions to a traditional 401(k).

Thanks, Ill check on that.

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