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+--- Thread: 401(k) (/showthread.php?tid=25130)
401(k) - Greg the dogsitter - 12-30-2006
So, to start, I'm supposed to put in the the maximum amount the company will match, right?
Re: 401(k) - ztirffritz - 12-30-2006
Put in as much as you can afford, no less than what the company will match. Think of the company match as a raise that you don't have to even ask for. Think of it as a slot machine that ALWAYS returns x%. If you know that a certain slot machine would ALWAYS return 5-10% above your initial investment, wouldn't you max out that slot machine?
Re: 401(k) - elmo3 - 12-30-2006
To start, you need to find a financial calculator where you can plug in different values, enter a rate of return, and tell you how much your monthly investment will be after X number of years.
Your eyes will open real wide.
Re: 401(k) - rob banzai - 12-30-2006
I have buggered my 401k so badly I will give no advice....
Re: 401(k) - wurm - 12-30-2006
Put in the most you can, regardless of the company match.
Re: 401(k) - Greg the dogsitter - 12-30-2006
"The most I can" means "the most that we can do without until retirement," right?
Re: 401(k) - Lux Interior - 12-30-2006
Remember, the more you put in, the less tax you pay. Your income tax is calculated on the amount of money in your paycheck AFTER the 401k deductions.
You get less money in your paycheck, but you are keeping more of it overall.
Re: 401(k) - Greg the dogsitter - 12-30-2006
[quote Lux Interior]Remember, the more you put in, the less tax you pay. Your income tax is calculated on the amount of money in your paycheck AFTER the 401k deductions.
You get less money in your paycheck, but you are keeping more of it overall.
Keeping it, after retirement. We're also saving for a house, so I don't know whether it's a good idea to dump too much into a fund we can't access for some time, yet.
Re: 401(k) - Lux Interior - 12-30-2006
Owning a home is important, too. Better to deduct morgage interest from your taxes than throwing it away on rent. You're still saving for something important either way.
If I were in your shoes, you'd be yelling at me, "Hey gimme back my (&$#@*ing shoes!"
Seriously, though, I would put enough in the 401k to get all the match and put whatever else I could afford into the down payment fund for the house. You do not want to pay PMI, so get 10 percent. As soon as you buy the house, put the extra in the 401k. You may be "house poor" for a while, but you will benefit in the long run.
Re: 401(k) - msienkiewicz - 12-30-2006
Contributing up to the company match is important.
After that - well I guess that's where the financial calculators that have been already mentioned come in.
Another possibility besides the 401k is a Roth IRA. You put in after-tax money but then when you retire you don't have to pay tax on the money that your investment has earned. Also (from http://en.wikipedia.org/wiki/Roth_IRA)
* At any time, the IRA owner may withdraw up to the total of his contributions (in nominal dollars).
* Up to $10,000 in earnings withdrawals are considered qualified if the money is used to acquire a principal residence. This house must be acquired by the IRA owner, their spouse, or their lineal ancestors and descendants. The owner or qualified relative who receives the "first time homeowner" distribution must not have owned a home in the previous 24 months.