401(k) Contributions – How much should I contribute?

Updated : Oct 24, 2019 in Articles

401(k) Contributions – How much should I contribute?


Hi, today we’re going to talk about 401k
contributions; specifically how much you should contribute. Like a lot of issues
there’s no one correct answer for this as retirement contributions will
depend on your individual circumstances and your retirement goals. If you have
high student loan payments struggle to meet monthly bills or have looming credit
card debt the 401k contributions might be small to non-existent at first.
However it’s important to start contributing something as soon as you
can as these contributions really do add up over time. Now if your employer offers
a part of a company match to your 401k contributions
you should start contributing as soon as you can to meet those matches otherwise
you’re leaving money on the table. Your individual contributions will be guided
by your retirement goals. Ask yourself when would you like to retire? How soon
would you like to start withdrawing from Social Security? and what would you like
your retirement life to look like? Most experts recommend contributing 10 to 15
percent of your paycheck towards your retirement. For example if you contribute
$5,000 a year over a 40-year career assuming national average rates of
return they’ll have around a million dollars set aside for retirement. That’s
why it’s important to start putting away at five to ten percent minimum to meet
your employer’s match it really pays to do so.

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