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by Anonymous on March 25th, 2007

Anonymous

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How much money should i invest into my 401k plan?

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Answers. 4 helpful answers below.

  • by davidwinner on November 23rd, 2009

    davidwinner

    you can start with 10K usd with myfxfunds in stead of 401k which generate low profits

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  • by Borderlinux on February 9th, 2009

    Borderlinux

    Whatever will max you out for the tax year.

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  • by audiogal on March 25th, 2007

    audiogal

    You should invest up to the maximum your plan allows, especially if your company has matching donations.

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  • by aristotle.allen on January 26th, 2011

    aristotle.allen

    The truth is this is a very personal choice. You should save as much as you are able.

    If you make 30k a year, maxing out your contribution (which is believe is $16500 a year this year) would be near impossible, unless you are living in your mom's basement.

    You should try to put in as much as you can, a little sacrifice to save more is good, but that number will be different for each individual and their goals. For example an additional $50 a week might mean you don't go out to dinner as much.. but that $50 a week, or even just $50 a month will really add up over the years.

    One good target is to take full advantage of your employers match if they provide one. If they match 50% with no limit... put away as much as you can.

    If they match 50% of x% up to 5k, a year, or 6k a year... make sure you put away enough to get it all, it's free money... like giving yourself a raise.

    Also keep in mind that your 401k contributions are pre-tax... so if you put away $100, and you are in a 21% tax bracket, you would have only received $79 in your paycheck for that $100. You will pay taxes... but they are deferred, so you also benefit from the compounding of that additional $$. Tack on you employers 50% match and you could be getting 71% more in your 401k, than what came out of your paycheck.

    If maxing it out starts cutting in to staples or other necessities, than it is simply too much. Put away what you can now, and later as your career moves on, you can always contribute more.

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