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401k questions...

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What is the name of your state? Michigan

I have been working for a company for four months now. When I first started, I was not interested in the 401k.

I think the reason that I was not interested in it - was because I knew nothing about it! Now I am considering signing up for my 401k.

My question is, what percentage should I be putting into my 401k?

Right now, I am 22 years old. I don't want to say that I'm "struggling" - but I have bills, and cannot afford to put a large percentage into it.

Any suggestions are appreciated!
Thanks so much!

- Kari :)
 


pattytx

Senior Member
We can't advise you to the letter.

However, the generic answer would be, if you can afford it, at least the percentage required to maximize the employer's contribution (assuming there is one). Don't forget in calculating what you can "afford", that 401K contributions are tax-deferred for Federal and Michigan State Income Tax.

There's a website called www.paycheckcity.com where you can try different combinations of gross pay, tax status, and 401K percentages to see what your net pay would approximately be.
 

Beth3

Senior Member
Kari, nobody here can tell you how much you should be contributing to your employer's 401(k) retirement plan. For one thing, we don't know what your current financial situation is and how much you can afford to defer.

All we can tell you is that the earlier you start contributing and the larger the amount you defer, the more you will have at retirement time. Even if you only put in 1, 2, or 3% right now, it will pay big dividends for you down the road as that money will have decades of compounded growth by retirement time.
 
Thanks for the reply's. It is VERY much appreciated!

I will check out paycheckcity.com and see what their website says.

thanks again!
- Kari :)
 

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