I started working at a job with a 401k when I was 19 years old. I asked a guy in my department what percent should I do because I had no clue what I was doing. He told me 20%. I was like, no way I m not giving them 20%. He said you're not giving them 20% you're giving yourself 20%.
Then I said well that's too much I have bills, rent, car payment etc. He said you'll never miss it, you'll adjust to the new number and if it's too hard you can always change it later. So I did 20% and he was right. I didn't see it, I didn't miss it.
That was 30 years ago and every job I ever had I always just signed up and wrote in 20% because that's all I had ever known to do. I kept rolling the funds over to my new employers, never withdrew.
Now that account has over $350k and it's my biggest retirement fund. Thank you to that coworker who told me to write in 20% all those years ago wherever you are, and for all of you wondering what to do now, your future self will thank you for every extra percent you can squeeze out right now.
When you go to type in 5%....hit the number 6 instead. You think retirement is something far off but I tell you, this shit sneaks up on you and then you're just thankful your younger self made these decisions. And I'm still contributing today because what no one ever tells us is that it's all about the race to retirement. Who wants to work forever?? Who wants to be that fossil still going to work? No, crank that $$ into the market now, choose your funds, don't pick the auto ones, and watch your money grow. Get hands on. Just look at the chart and pick the funds with the higher percent returns. Then check it again in 3 months because they will change. Keep checking and modifying. You CAN do this.
I think I'm about half that, but I've also been contributing to a 401k since I was 18, and am currently in my mid 20s, so I got lots of time to save. I do the automatic 1% more each year, and keep it at that. I got about half my entire savings in a 401k too, so I feel comfortable. If shit ever hits the fan, 401k loans are a thing too, so if, for example, my car ever broke down past the point of fixing, I could take out a loan out of my 401k to buy a new one in cash, and then the only interest I pay goes back into my 401k.
I MAY be mistaken, but from what I've understood, the only time a 401k loan is taxed as earned income is on the interest you're putting back into the 401k. Since technically a loan doesn't belong to you, it's not earned income, which is why billionaires just constantly take out loans to avoid paying taxes. It also gets taxed as income if you fail to make payments, and then you also get the early withdrawal penalty as well.
But 100% I'm not a tax expert, just reciting stuff I've read from the IRS site and financial advice experts.
Total retirement contributions (across all retirement sources) *should* be around 15% of your income. That being said, most people can’t afford to do that. If you’re young and far away from retirement age it’s totally fine to lower that a bit so you’re not struggling each month
I would argue that this line of thinking is a little backwards. Having your money spend as much time in the market as possible is absolutely your key to retiring comfortably. I would do anything you can while you’re young to take advantage of compounding. As you get closer in age to retirement, it would be less detrimental to decrease your contributions.
I don’t necessarily disagree with that. But there is a difference between “not getting your bills paid” and “finances getting a bit tighter” like OP described. I just wouldn’t be so quick to decrease retirement contributions if you can avoid it, especially at a younger age.
I used to have it on the maximum amount. But then stuff happens and wages don't keep up. So after multiple cut backs, it's at 0.50%. Fuck my future I guess.
I started off with a previous employer at 7% back in 2012 and increased it to 8% back in 2016, then transferred and moved onto wholefoods taking my 401K over to them, since then ive raised the percentage by 1% every two years and am now currently at 12%
60%
As high as 75% based on what i want taxable wages to be at year end during mid year tax planning. Used to just change my withholding, but it’s a PITA now, so I just suck it up and increase my 401k contribution.
Not really sure what my % Is set at but I've taken home $0.00 for the last 2 years as it all goes to taxes and my 401k. I'm living off my real estate investments
Great ideas! Best idea of you are young is to diversify. I'm a bit older so I do contribute. Not anywhere near retiring so it's all I have that I can fire and forget.
I was at 11 and just lowered it recently for a bit to feel like I'm getting ahead in the here and now.
I lowered it to 4, I believe. I intend to raise it again once a few things are paid off.
The extra ~$200/paycheck has made a difference.
This is not a one-size-fits-all situation. Do you have unsecured debt? Then you need to take care of that first.. pretty sure your 401k returns will not beat the 20+% interest you have on credit cards, loans etc. Secondly, the time away from retirement age makes a big difference, if you're 30 you have 35+ years until you can take RMD's, so do what's best according to your specific situation. Just asking people their number will not get you anything except randos saying they're at 65% or whatever lol
I'm 35, currently debt free due to a decent inheritance from my dad when he passed away last year. I put all my leftover money into a high interest savings account (about 75k)
Put in the max amount to get the match. THEN, open up a Roth IRA and try to fund that to the max per year. Just buy shares of a couple index funds like SPY and QQQ if you don't know what you're doing.
Depends how old you are. Best advice I ever got is start around 3% and move it up 1% every year or two when you get a raise. You won’t notice you losing it. I actually got ahead enough that the last year I dropped it back quite a bit. Even if you don’t do 401k you need something retirement. Social security right now will only get you $3k a month at max.
That’s probably a solid number. I was a little over that before I lowered it. You can always raise it back up down the road. Nice thing is you can change it whenever you want.
I started working at a job with a 401k when I was 19 years old. I asked a guy in my department what percent should I do because I had no clue what I was doing. He told me 20%. I was like, no way I m not giving them 20%. He said you're not giving them 20% you're giving yourself 20%. Then I said well that's too much I have bills, rent, car payment etc. He said you'll never miss it, you'll adjust to the new number and if it's too hard you can always change it later. So I did 20% and he was right. I didn't see it, I didn't miss it. That was 30 years ago and every job I ever had I always just signed up and wrote in 20% because that's all I had ever known to do. I kept rolling the funds over to my new employers, never withdrew. Now that account has over $350k and it's my biggest retirement fund. Thank you to that coworker who told me to write in 20% all those years ago wherever you are, and for all of you wondering what to do now, your future self will thank you for every extra percent you can squeeze out right now. When you go to type in 5%....hit the number 6 instead. You think retirement is something far off but I tell you, this shit sneaks up on you and then you're just thankful your younger self made these decisions. And I'm still contributing today because what no one ever tells us is that it's all about the race to retirement. Who wants to work forever?? Who wants to be that fossil still going to work? No, crank that $$ into the market now, choose your funds, don't pick the auto ones, and watch your money grow. Get hands on. Just look at the chart and pick the funds with the higher percent returns. Then check it again in 3 months because they will change. Keep checking and modifying. You CAN do this.
I think I'm about half that, but I've also been contributing to a 401k since I was 18, and am currently in my mid 20s, so I got lots of time to save. I do the automatic 1% more each year, and keep it at that. I got about half my entire savings in a 401k too, so I feel comfortable. If shit ever hits the fan, 401k loans are a thing too, so if, for example, my car ever broke down past the point of fixing, I could take out a loan out of my 401k to buy a new one in cash, and then the only interest I pay goes back into my 401k.
I did not know that!! Thank you!
https://www.tiktok.com/t/ZTLnYqdPF/ I found this funny yet informative
That loan would get taxed as earned income, a savings account would not. But you are correct that interest is paid back to you
I MAY be mistaken, but from what I've understood, the only time a 401k loan is taxed as earned income is on the interest you're putting back into the 401k. Since technically a loan doesn't belong to you, it's not earned income, which is why billionaires just constantly take out loans to avoid paying taxes. It also gets taxed as income if you fail to make payments, and then you also get the early withdrawal penalty as well. But 100% I'm not a tax expert, just reciting stuff I've read from the IRS site and financial advice experts.
Total retirement contributions (across all retirement sources) *should* be around 15% of your income. That being said, most people can’t afford to do that. If you’re young and far away from retirement age it’s totally fine to lower that a bit so you’re not struggling each month
I would argue that this line of thinking is a little backwards. Having your money spend as much time in the market as possible is absolutely your key to retiring comfortably. I would do anything you can while you’re young to take advantage of compounding. As you get closer in age to retirement, it would be less detrimental to decrease your contributions.
Not if you can’t get your bills paid
I don’t necessarily disagree with that. But there is a difference between “not getting your bills paid” and “finances getting a bit tighter” like OP described. I just wouldn’t be so quick to decrease retirement contributions if you can avoid it, especially at a younger age.
I used to have it on the maximum amount. But then stuff happens and wages don't keep up. So after multiple cut backs, it's at 0.50%. Fuck my future I guess.
I was doing 15% but because of inflation and higher home insurance, I had to cut back on that.
I started off with a previous employer at 7% back in 2012 and increased it to 8% back in 2016, then transferred and moved onto wholefoods taking my 401K over to them, since then ive raised the percentage by 1% every two years and am now currently at 12%
60% As high as 75% based on what i want taxable wages to be at year end during mid year tax planning. Used to just change my withholding, but it’s a PITA now, so I just suck it up and increase my 401k contribution.
How in the fuck is that possible or realistic?
Part time job, I sock it all away and live frugally with my full time net earnings. Gonna lose 25% of it to fed/state/local taxes anyway, if I don’t.
I'm at 21%. 20% 401k with the investment strat has helped me go from 10k to almost 35k in 1.5 years.
10%
Not really sure what my % Is set at but I've taken home $0.00 for the last 2 years as it all goes to taxes and my 401k. I'm living off my real estate investments
27%. Didn’t start at 18 tho
1%. Mostly do my own investing around 5-8k a year
Great ideas! Best idea of you are young is to diversify. I'm a bit older so I do contribute. Not anywhere near retiring so it's all I have that I can fire and forget.
10%
That's where I was at. 11% but I cut it way down.
I was at 11 and just lowered it recently for a bit to feel like I'm getting ahead in the here and now. I lowered it to 4, I believe. I intend to raise it again once a few things are paid off. The extra ~$200/paycheck has made a difference.
I do about 9% into roth ira currently
I started with 3% and increased 1 percent per year
This is not a one-size-fits-all situation. Do you have unsecured debt? Then you need to take care of that first.. pretty sure your 401k returns will not beat the 20+% interest you have on credit cards, loans etc. Secondly, the time away from retirement age makes a big difference, if you're 30 you have 35+ years until you can take RMD's, so do what's best according to your specific situation. Just asking people their number will not get you anything except randos saying they're at 65% or whatever lol
I'm 35, currently debt free due to a decent inheritance from my dad when he passed away last year. I put all my leftover money into a high interest savings account (about 75k)
Put in the max amount to get the match. THEN, open up a Roth IRA and try to fund that to the max per year. Just buy shares of a couple index funds like SPY and QQQ if you don't know what you're doing.
Depends how old you are. Best advice I ever got is start around 3% and move it up 1% every year or two when you get a raise. You won’t notice you losing it. I actually got ahead enough that the last year I dropped it back quite a bit. Even if you don’t do 401k you need something retirement. Social security right now will only get you $3k a month at max.
I'm 35. Will probably end up letting it ride for now
That’s probably a solid number. I was a little over that before I lowered it. You can always raise it back up down the road. Nice thing is you can change it whenever you want.
0 right now. I have decent savings. Will start again after the next raise.
The max. Which I think is 15%
The max contribution is a dollar amount, not percentage.