How much does everyone here put into their 401 per paycheck. I put 10% with my company matching 6%. I also have the option of 401K or Roth 401K. I've read up on it but not sure if switching to the Roth 401K makes sense. 
Recommendations on 401K
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I max mine out. If your company matches 6% give as much as you can imo.
I prefer Roth accounts personally. Tax free growth to me is a no brainer. If you go pretax you're getting your tax breaks now but you'll pay taxes when you withdraw later, vs with Roth you're funding it with after-tax dollars but the growth is tax free. I will always lean toward Roth personally but the most important thing is to keep contributing period. Some do a mix of both which is ok too.
Just FYI when doing the Roth option your company match will 99% be pretax contributions.
I prefer Roth accounts personally. Tax free growth to me is a no brainer. If you go pretax you're getting your tax breaks now but you'll pay taxes when you withdraw later, vs with Roth you're funding it with after-tax dollars but the growth is tax free. I will always lean toward Roth personally but the most important thing is to keep contributing period. Some do a mix of both which is ok too.
Just FYI when doing the Roth option your company match will 99% be pretax contributions.
MillionMills
Superstar
Roth is after tax dollars so when you withdrawal you pay no tax. Much better IMO
Damn 6% match is nice. I have a 4% match rate and I put 11% of my own money. You are well ahead of the curve in terms of saving for the future.How much does everyone here put into their 401 per paycheck. I put 10% with my company matching 6%. I also have the option of 401K or Roth 401K. I've read up on it but not sure if switching to the Roth 401K makes sense.
I have a Roth IRA in addition to my 401K as well. Basically it works like this for me:
- Leftover money in my savings accounts gets automatically rerouted to my a regular investment account with Vanguard on a monthly basis
- At the start of the new year, I take the max allowed for a Roth IRA ($5,500) from my Vanguard account and put it into my Roth IRA account.
For me, the Roth IRA is like a longer term emergency fund... It takes a couple days longer than a savings account if I needed to get the money, but taxation happens up front for the Roth IRA so it has a lot more potential than a regular investment account thanks to compound interest.
One thing I want to point out though is that, I am not close to maxing out my 401K, and so the excess money that I save but do not invest in my Roth IRA is not being optimally invested as a result. They actually created a flow chart of your financial goals when it comes to investment (probably worth it's own thread tbh):
If you are a junkie about this stuff, check out www.Reddit.com/r/personalfinance in general for some easy to understand advice and theories.
Silkk
Can't Change My Damn Avi :beli:
Whats a "regular investment account"? on vanguard?Damn 6% match is nice. I have a 4% match rate and I put 11% of my own money. You are well ahead of the curve in terms of saving for the future.
I have a Roth IRA in addition to my 401K as well. Basically it works like this for me:
- Leftover money in my savings accounts gets automatically rerouted to my a regular investment account with Vanguard on a monthly basis
- At the start of the new year, I take the max allowed for a Roth IRA ($5,500) from my Vanguard account and put it into my Roth IRA account.
For me, the Roth IRA is like a longer term emergency fund... It takes a couple days longer than a savings account if I needed to get the money, but taxation happens up front for the Roth IRA so it has a lot more potential than a regular investment account thanks to compound interest.
One thing I want to point out though is that, I am not close to maxing out my 401K, and so the excess money that I save but do not invest in my Roth IRA is not being optimally invested as a result. They actually created a flow chart of your financial goals when it comes to investment (probably worth it's own thread tbh):
If you are a junkie about this stuff, check out www.Reddit.com/r/personalfinance in general for some easy to understand advice and theories.
A regular account is an investment account that doesn't have a specific purpose that is co-signed by the IRS. Whatever money you make is taxed annually. On the other hand, there are accounts like Retirement accounts like 401Ks that are only taxed once you attempt to withdraw money.
Vanguard is an investment firm that offers mutual funds that have been very popular for everyday people who invest their own money. In the chart above it will fall under the Savings/Investment option. One of the main reasons they have become popular is because on average they have low expense ratios (the amount of money that is taken from you for investing in a mutual fund) and they tend to be more interested in their customers making money than their stockholders making money.
Silkk
Can't Change My Damn Avi :beli:
So you're referreing to IRAs?
606onit
Superstar
I just logged into my Wells Fargo account from an old job. It looks like I've got $38K in retirement savings now cuz I would take advantage of company match. Can someone tell me what I should and can do with it? It just looks like money to me, but I know better than to use it on some nicca shyt. I just want the money to start working for me.
Also, should this thread be stickied?
Also, should this thread be stickied?
You typically hit heavy penalties if you touch the money prior to age 55-60. When I needed money my company has allowed to me to 'borrow' money from it with funds being taken from each paycheck until you pay it back. That might be an option to look into.
IRA is an Individual Retirement Account. A regular account would be an account that isn't specifically classified for retirement/college savings/etc.
10 with a 50% match from the company.
Do a little research. Sounds like it's in a 401k from your previous job. Compare the funds and performance from that vs. where you are now, honestly if it's performing well/better than what you have now, you could leave it there. If you don't want to do that, you can do a rollover. Make sure when/if you do that they do not send you the check, or else you'll get hit with taxes. Have them transfer it directly to your new current account.
FYI part of researching is also looking at what's called the expense ratio. It's basically the fee/cost of the fund. Look for low expense ratios, so that more of your money goes to you vs the company.
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Vanguard is a really good overall company imo. They offer lots of options while having some of the lowest fees in the industry.
My job matches me dollar for dollar on up to 4%. They used to match up to 3 to 1. I put in 5% to have some extra in there. I also put in $75 every other month to a roth ira. That's my investment money.