April 01, 2008
Posted by xray997223
what percent of my salary should I put into my 401k? I am interested in joining in a 401k with my company but I am confused. Can anyone help?
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April 01, 2008
Posted by TonyLiu
( 1 rating )
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April 02, 2008
Posted by inthemoney
( 1 rating )
If your tax bracket is higher when it's time to withdraw your 401k it will take a huge tax hit. If you think your tax bracket will be lower, then it's a great investment.
I would look to put in as much as the company would match. There are other ways to invest to reduce some of your risks such as taxes, inflation, interests, market and horizon risk - the risk of outliving your money. The best way is to contact a good financial advisor to work with your situation.
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- bahellman: I'll second that the company match is a fantastic investment opportunity. However, only if you plan to stay at the company for several years. Many companies have matching vesting schedules. Meaning if you leave the company in under a year they get the matched money back. You need to weigh in this factor when deciding how to invest for retirement.
- inthemoney: Great point. It's something that most people overlook.
- Moneyvelocity: I also agree. And if you do decide to withdraw, there will be large penalties in a lot of cases. We would recommend doing a bit more research into what your company offers, what the fund manager offers, and compare the returns with other funds or investments.
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