[Marc]

Hi guys,

I just started contributing to my 401k, I only contribute 3% which is what my company matches 100% … i think they also match 50% of the next 2 or 3%

based on some reading i have done that seems to be extremely low! I do have a family and we try to live comfortably but really have no saving activity going on! “sole breadwinner” making around 60k.

I was wondering how everyone else plans for retirement.

Passed And got my license too ..

[Anonymous]

If they match even 50% up to 6%, you want to put in nothing less than 6%. That's “free” money you're giving up otherwise.

[hunter32]

I'm 25 and I contribute 10%

BEC - 80 (Becker)
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FAR - 87 (Becker+NINJA MCQ)
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[jbarwick]

We contribute 20% gross for retirement split between 401k, 403b, and Roth IRAs. We are both 29 with no kids and when we have kids we do not expect to change our savings rate. Kids just mean less shoes and clothes and maybe an adjustment to the wine budget.

Journey Started - January 2015
FAR - 4/2015 - Passed
AUD - 7/2015 - Passed
BEC - 8/2015 - Passed
REG - 11/12/2015 - Passed

[Lari Sa]

Almost every financial site out there recommends 15%, so if your employer is contributing 3% so you should be contributing 12% for a total of 15. However, it is totally understandable if you are a “sole breadwinner”, it might be tougher to carve out 12% of your paycheck for retirement.

Do keep in mind that 10 dollars put away in your 20's is worth more at retirement than 10 dollars put away in your 30's.

AUD 85 (11.10 - expired), 0 (2.13), 82* (5.13)
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FAR 67 (5.12), 73 (12.12), 78* (2.13)

[Marc]

Thanks guys, I really appreciate your input and advice. yes.. I think I should take it more seriously!

Passed And got my license too ..

[y_u_no_pass]

It is good that you are contributing. I agree that you should try to go to at least the percentage your employer matches 50% as that is free money you are leaving on the table. From what I have read the easiest time to up your contributions is when you get a raise. That way you won't notice the effect. Maybe up your contributions at your next raise? I hope to do the same, but it is tough. I am currently the only one working also and it is very tough.

Florida CPA!
Took final exam 2/25/15.
Sent in Application 3/12/15.
Issued License 3/20/15.
Used CPA Excel solely for all exams.

[ScarletKnightCPA]

Honestly 3% + 3% employer match should leave you with enough to retire on. I just ran the numbers assuming 8% growth and no salary growth you should have about $1 million by 65.

Can you contribute more? Sure.

I am under 30. I've been putting away 30% for past couple years. Employer match just began 4% since i moved jobs. I currently have $100K in my retirement accounts. I do have student debt at around $50K and growing due to grad school however.

Far: 76 (Wiley Test Bank)
Aud: 77 (Wiley Test Bank)
Reg: 61, 76 (Wiley book, Wiley Test Bank)
Bec: 86 (Wiley Test Bank)

MBA in progress

[Lari Sa]

I've also seen this chart a few times:

balance age

1xsalary 30

2xsalary 35

4xsalary 40

6xsalary 50

7-8xsalary 55-60

Just to make sure you're on track, your 401k balance should be 1 times your salary by age 30, 2 times your salary by age 35 and so forth. This of course reflects contributions + growth.

AUD 85 (11.10 - expired), 0 (2.13), 82* (5.13)
BEC 49 (5.09), 38 (5.11), 75* (10.11)
REG 65 (2.11), 74 (11.11), 0 (2.12), 81* (4.12)
FAR 67 (5.12), 73 (12.12), 78* (2.13)

[Last Chance CPA]

Anyone heard of this whole “highly compensated” restriction? Apparently, it is an IRS imposed restriction ($3,000 cap) on 401K for those that make over $120,000 (2015)? This never ever came up during REG!

FAR - 76
AUD - 75
BEC - 75
REG - 76

Now I need some experience!!! And some networking...

[ScarletKnightCPA]

@ Last Chance CPA

I don't think you have the Highly Compensated restriction rule right.

Far: 76 (Wiley Test Bank)
Aud: 77 (Wiley Test Bank)
Reg: 61, 76 (Wiley book, Wiley Test Bank)
Bec: 86 (Wiley Test Bank)

MBA in progress

[State Aggie]

@ Lari Going from 2x-4x from 35-40 (5 years) and then from 4x-6x fom 40-50 (10 years) makes me dismiss that chart. It is much easier to go from 4x to 6x then form 2x-4x. An IRR calculator shows me from 35-40 would require a greater than 9% return and 15% contributions with no increase in x.

To the OP. If you can afford it put away at least 15%… I started in 2002 and 13 years later, I know the personal finance course I took as an undergrad had the most impact on my life.

BEC - 87
AUD - 74, 92
REG - 82
FAR - 65, 85

[shankysays]

I'm 26 and I contribute 9%, and my employer matches 3%, for a total of 12%. Definitely contribute up to the maximum employer contribution you can get, otherwise it's like turning down a raise.

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Licensed CPA 5/2015

[jeff]

I am a firm believer in Dave Ramsey's baby steps, so it's a question of whether or not you're ready for it.

https://www.daveramsey.com/mobile/baby-steps/

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[Last Chance CPA]

@ScarletKnightCPA – I do actually, because I am in that category. I am just in a completely different industry right now (IT consulting), which is quite lucrative, but I am getting sick of it…

FAR - 76
AUD - 75
BEC - 75
REG - 76

Now I need some experience!!! And some networking...

[Anonymous]

My husband and I each contribute 15% and then I do 3% in my ESPP and he does 5%. I only get matching on the traditional 401k, so I max that out and then do the rest in a roth.

[Author]

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