Comments on: How To: Plan My 401(k) Contributions http://www.bargaineering.com/articles/how-to-plan-my-401k-contributions.html personal finance blog with anecdotes, advice and commentary. Sun, 22 Nov 2009 06:04:27 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: jim http://www.bargaineering.com/articles/how-to-plan-my-401k-contributions.html/comment-page-1#comment-226276 jim Wed, 02 Apr 2008 12:52:51 +0000 http://www.bargaineering.com/articles/how-to-plan-my-401k-contributions.html#comment-226276 2million: Not sure where you got college but I never earned six figures from my job. 2million: Not sure where you got college but I never earned six figures from my job.

]]> By: 2million http://www.bargaineering.com/articles/how-to-plan-my-401k-contributions.html/comment-page-1#comment-226247 2million Wed, 02 Apr 2008 04:41:45 +0000 http://www.bargaineering.com/articles/how-to-plan-my-401k-contributions.html#comment-226247 Jim, Am I reading this wrong or are you saying you have a low six figure income in college? Jim, Am I reading this wrong or are you saying you have a low six figure income in college?

]]> By: Anonymous http://www.bargaineering.com/articles/how-to-plan-my-401k-contributions.html/comment-page-1#comment-226124 Anonymous Mon, 31 Mar 2008 21:55:25 +0000 http://www.bargaineering.com/articles/how-to-plan-my-401k-contributions.html#comment-226124 Frugal Dad: You do not lose any compounded interest benefit by spreading monies across accounts. Don't worry about that. The risk is all in the return. Frugal Dad: You do not lose any compounded interest benefit by spreading monies across accounts. Don’t worry about that. The risk is all in the return.

]]> By: GBlogger http://www.bargaineering.com/articles/how-to-plan-my-401k-contributions.html/comment-page-1#comment-226107 GBlogger Mon, 31 Mar 2008 17:50:45 +0000 http://www.bargaineering.com/articles/how-to-plan-my-401k-contributions.html#comment-226107 Neither my wife nor I get any matching on our retirement contributions, but we both have the Roth option on our 401ks. I also have another plan available to me through my company that is separate from 401k but can only be pre-tax. In total, our contributions are currently around 60% in pre-tax and 40% in Roth. I really like the part of this post on "Changing Your Contributions." It's important to push to save for retirement, including through your main vehicles like 401k, but I agree with the idea that you should accommodate the rest of your circumstances as well (and that those will change). Neither my wife nor I get any matching on our retirement contributions, but we both have the Roth option on our 401ks. I also have another plan available to me through my company that is separate from 401k but can only be pre-tax. In total, our contributions are currently around 60% in pre-tax and 40% in Roth.

I really like the part of this post on “Changing Your Contributions.” It’s important to push to save for retirement, including through your main vehicles like 401k, but I agree with the idea that you should accommodate the rest of your circumstances as well (and that those will change).

]]> By: jim http://www.bargaineering.com/articles/how-to-plan-my-401k-contributions.html/comment-page-1#comment-226103 jim Mon, 31 Mar 2008 17:18:03 +0000 http://www.bargaineering.com/articles/how-to-plan-my-401k-contributions.html#comment-226103 Grace: I think the 25% loss shouldn't play a role in your decision making because that 25% loss was like the tide, everything went down. As long as you aren't trying to time the market by sitting on the sideline, as you may be tempted to with a taxable brokerage account, I think the other factors are more important. You may find the fee savings are significant, plus the headache of managing (or ignoring) so many accounts. Grace: I think the 25% loss shouldn’t play a role in your decision making because that 25% loss was like the tide, everything went down. As long as you aren’t trying to time the market by sitting on the sideline, as you may be tempted to with a taxable brokerage account, I think the other factors are more important. You may find the fee savings are significant, plus the headache of managing (or ignoring) so many accounts.

]]> By: Grace http://www.bargaineering.com/articles/how-to-plan-my-401k-contributions.html/comment-page-1#comment-226101 Grace Mon, 31 Mar 2008 16:57:01 +0000 http://www.bargaineering.com/articles/how-to-plan-my-401k-contributions.html#comment-226101 A slight off shoot to the 401(k) topic, here's my question and would love to have your feedback: I have 3 401(k)s from previous employers that I have been too lazy to rollover. My current employer's 401(k) fund choices are really good, so it's in my interest to roll them over. Unfortunately, due to current market conditions, my 401(k) balances have gotten a 25% haircut. Do I roll the plans from previous employers over to my current employer now or hold off until things improve? I know, who's to say if and when things will improve, but if my current employer's fund choices are good, wouldn't it be wise to get in now as the mutual fund shares are cheaper? Please advise, thank you! A slight off shoot to the 401(k) topic, here’s my question and would love to have your feedback:

I have 3 401(k)s from previous employers that I have been too lazy to rollover. My current employer’s 401(k) fund choices are really good, so it’s in my interest to roll them over. Unfortunately, due to current market conditions, my 401(k) balances have gotten a 25% haircut. Do I roll the plans from previous employers over to my current employer now or hold off until things improve? I know, who’s to say if and when things will improve, but if my current employer’s fund choices are good, wouldn’t it be wise to get in now as the mutual fund shares are cheaper? Please advise, thank you!

]]> By: Adfecto http://www.bargaineering.com/articles/how-to-plan-my-401k-contributions.html/comment-page-1#comment-226100 Adfecto Mon, 31 Mar 2008 16:55:04 +0000 http://www.bargaineering.com/articles/how-to-plan-my-401k-contributions.html#comment-226100 I started contributing enough to get the full 401(k) match, next I opened a Roth IRA and set up regular automatic contributions. Then with each raise I allocate half of the take home to increasing my savings. I never miss the money. As it stands now I put 8% into my 401(k) and $100 per pay period into my Roth. This Summer I will (very likely) get about a 4% raise which will be just about enough after taxes to finish maxing my Roth IRA. January '09 I will, again with a little luck, get a cost of living adjustment of about 4% so I will increase my 401(k) to ~10%. This approach can work for anyone and you will never even miss the money. Even back when I made about half of my current salary it worked just fine. By using a percentage based system it lets your savings grow as your income grows. When you do start pulling down six figures one day, you won't even miss the $15,000+ you are saving each year. I started contributing enough to get the full 401(k) match, next I opened a Roth IRA and set up regular automatic contributions. Then with each raise I allocate half of the take home to increasing my savings. I never miss the money.

As it stands now I put 8% into my 401(k) and $100 per pay period into my Roth. This Summer I will (very likely) get about a 4% raise which will be just about enough after taxes to finish maxing my Roth IRA. January ‘09 I will, again with a little luck, get a cost of living adjustment of about 4% so I will increase my 401(k) to ~10%.

This approach can work for anyone and you will never even miss the money. Even back when I made about half of my current salary it worked just fine. By using a percentage based system it lets your savings grow as your income grows. When you do start pulling down six figures one day, you won’t even miss the $15,000+ you are saving each year.

]]> By: paidtwice http://www.bargaineering.com/articles/how-to-plan-my-401k-contributions.html/comment-page-1#comment-226084 paidtwice Mon, 31 Mar 2008 13:44:33 +0000 http://www.bargaineering.com/articles/how-to-plan-my-401k-contributions.html#comment-226084 Thanks for including my story :) Do you have a Roth 401K at work? We don't so we don't have to worry about that yet :) Thanks for including my story :)

Do you have a Roth 401K at work? We don’t so we don’t have to worry about that yet :)

]]> By: jim http://www.bargaineering.com/articles/how-to-plan-my-401k-contributions.html/comment-page-1#comment-226083 jim Mon, 31 Mar 2008 13:41:13 +0000 http://www.bargaineering.com/articles/how-to-plan-my-401k-contributions.html#comment-226083 I think you need to diversify your tax profile, so my strategy was always to put the minimum amount to get the maximum match, then fill up the Roth, than go back to the 401k. Each person has their own "best" method but that was mine... then they threw in the Roth 401(k)! I think you need to diversify your tax profile, so my strategy was always to put the minimum amount to get the maximum match, then fill up the Roth, than go back to the 401k. Each person has their own “best” method but that was mine… then they threw in the Roth 401(k)!

]]> By: Frugal Dad http://www.bargaineering.com/articles/how-to-plan-my-401k-contributions.html/comment-page-1#comment-226075 Frugal Dad Mon, 31 Mar 2008 13:20:29 +0000 http://www.bargaineering.com/articles/how-to-plan-my-401k-contributions.html#comment-226075 What do you say to those who recommend only investing through a company match in 401k's and plowing the rest into a Roth IRA? Seems like a good way to hedge the post-retirement tax hit, but I'm wondering about reducing the compounding effect by having your funds spread across multiple accounts. Great post, by the way! What do you say to those who recommend only investing through a company match in 401k’s and plowing the rest into a Roth IRA? Seems like a good way to hedge the post-retirement tax hit, but I’m wondering about reducing the compounding effect by having your funds spread across multiple accounts. Great post, by the way!

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