Any advice for 401k?

[Stopsign32v]

I'll be honest, I've never been much in place of saving in my life before. This hobby was a huge reason for it in the past to be honest. Anyways I'm now I guess planted in my career and plan on staying at my company for a good while. With that being said my company pretax takes out 4% and also matches the 4%. That comes out to about $400 a month going into my 401k. Problem is I do not know anything about 401k or what to invest in. I've talked to a couple of very successful managers here and they all told me the same thing, since I'm in my 30's I should be aggressive. Below is the investments I can choose from within my company and we use Vanguard. One of the CEO's told me to focus on technology and petrols.

What advice do you guys have for me? I'm starting from scratch here in both knowledge and money.

 

[Stateguy]

I’m in my early 30’s and put 12% in 401k with a 4% match. I also contribute 8% to a Roth. Being 30 years away from retirement I chose a blended fund with my target retirement year.

I’m also interested in advice seeing as I’ve just been on autopilot for the past 4 years.


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[PaxtonShelby]

Vanguard should be able to suggest funds that are available through your company’s 401k that will meet your goals and keep you diversified. Also...crank up the % you are contributing as much as you can.

 

[Gr8fulmtnbiker]

Retirement plans where participants direct the investments in their accounts generally have financial advisors attached to them- someone who is responsible for educating plan participants on the investments. You should be reaching out to that individual for guidance.

 

[VegasMichael]

The Vanguard 500 index is what I would go with.

 

[MG0h3]

I’d have to research those funds to see what they track. My options are simple with only 5 funds and then 5 “target date” funds that blend the other ones.

I have a ways to go so I invest in the funds that mirror the DOW and S&p

Works good for me since I can easily watch those daily and catch trends and move my money to the more stable funds if I see a tank coming.

The “target date” funds with the latest retirement date (like 2050) are going to be more aggressive.


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[KEVINS]

After many years of contributing to my 401k through the company it took me 5yrs of reflecting on what it has earned me and my conclusion is the job they did SUCKED!

Last year I chose to find someone else to invest my $$ and they made me more money in 10months than I made in 5 yrs. Now I only put in the bare minimum (4%) into the company 401k just to get their matched $$ but I put the remaining 16% into the other. MUCH HAPPIER and richer so far.

ks

 

[2000GTSTANG]

You need to up your contribution! 4% + their match is fine if your in your early-mid 20s. You should be putting closer to 10-12% in. Unless your contributing to a Roth IRA, then contribute your 4% and stuff as much as you can into the Roth. Roths are post-tax dollars, so they'd come out of your paycheck, but you can withdraw (your contirubtions), at any time, if you need to the money.

 

[Stopsign32v]

You need to up your contribution! 4% + their match is fine if your in your early-mid 20s. You should be putting closer to 10-12% in. Unless your contributing to a Roth IRA, then contribute your 4% and stuff as much as you can into the Roth. Roths are post-tax dollars, so they'd come out of your paycheck, but you can withdraw (your contirubtions), at any time, if you need to the money.

So again, I'm new to this so keep that in mind. Would 4% plus the company's 4% in a Vanguard 500 Index be the best idea THEN put anything else I have in a Roth IRA?

 

[Gr8fulmtnbiker]

You need to up your contribution! 4% + their match is fine if your in your early-mid 20s. You should be putting closer to 10-12% in. Unless your contributing to a Roth IRA, then contribute your 4% and stuff as much as you can into the Roth. Roths are post-tax dollars, so they'd come out of your paycheck, but you can withdraw (your contirubtions), at any time, if you need to the money.

agreed you should up your payroll contributions- don't just do the bare minimums to get the match...do as much as you COMFORTABLY can.

if you think Roth is a good idea for you, check to see if your 401k plan allows for Roth deferrals and then you can contribute those to the plan as well. among other IRA limitations, i believe IRA's are dependent on income levels and you can only contribute a limited amount when compared to inside a 401k plan? (for example, in a 401k if you are under age 50 the limit for 2018 is $18,500 that can be deferred from payroll either pre-tax or Roth or some combination of the 2, but not in excess of the limit...if you are 50 or older then you can contribute an additional $6K catch up). and you maybe cannot withdraw Roth monies at any time- they are subject to the plan's withdrawal rules so check those in case you ever need to take money out.

 

[SVT-BansheeMan]

We talked to a financial adviser. Worked out very well so far.

 

[nxhappy]

mid cap and small cap, and throw in a conservative bond

 

[2000GTSTANG]

So again, I'm new to this so keep that in mind. Would 4% plus the company's 4% in a Vanguard 500 Index be the best idea THEN put anything else I have in a Roth IRA?

Thats just one way of doing it. If you think youll be in a higher tax bracket when you retire, contributing more to your IRA is a wise idea. That way your dollars are taxed less.

Im 28 and contribute 11% to my 401k, my employer matches 4% of that. I also contribute about 10% to my IRA every paycheck. Im thinking of scaling back my 401k contribution, but I need to see if that will make me go to a higher tax bracket or not. I was only doing the 4% + 4% thing for a while, until I started to learn more about personal finance.

Reddit has a great subreddit on this subject; r/personalfinance. Lots of knowledgeable people over there that can help you out too.

 

[IronSnake]

I was pleasantly surprised to find out I earned a Discretionary 401k bonus this year. You have to be around for a certain period of time. Got a huge chunk of change stuck in my 401k and drove home a very happy man that day. Talk about compounding.

 

[verbal]

I have my entire 401k in a Vanguard Target Date fund. It is made up of a series of Vanguard index funds to match my age based risk tolerance. It has performed well for me and the fees they charge my company’s plan seem pretty low.

If I were you and was struggling to pick funds I would just go with the Target Date funds.

 

[ON D BIT]

I like mutual funds with great long term track records.
10 or more years ave 10% or more yearly.

 

[Twisted2v]

A trad. ira and a roth ira are the same thing essentially. Contributions that go toward your pool of retirement money.

Main question is when do I want my money taxed?

You can include your contributions on your tax return this year. You pay tax on it now. When you retire, none of that money will be included as taxable on your tax return. You'll pay no income tax on that money. That's a Roth in a nutshell.

Choosing traditional or Roth is balancing strategy/rules/preferences.

 

[snakecharmer]

You need to up your contribution! 4% + their match is fine if your in your early-mid 20s. You should be putting closer to 10-12% in. Unless your contributing to a Roth IRA, then contribute your 4% and stuff as much as you can into the Roth. Roths are post-tax dollars, so they'd come out of your paycheck, but you can withdraw (your contirubtions), at any time, if you need to the money.

This. And ideally try to hit the max allowed by the IRS every year. $18,500 currently for those under 50.

 

[Stanger00]

This. And ideally try to hit the max allowed by the IRS every year. $18,500 currently for those under 50.

Yup go poor today to be rich 25-35 years from now


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[ford fanatic]

We printed out our options and took it to our financial adviser, my advice to you is you don't have one, find one.