401K question

If you were in your early 30's what is a good amount to have in your 401k if you make 60-80K a year?
My BFF has saved about 10K and keeps telling me she is still young and has time. I feel that by now she should save more. But I am curious if I am over paranoid or if her thinking is in line with other early 30 year olds?

Re: 401K question

I think you are going to get a mixed bag of answers. I am in my early 30's and have never really worked anywhere that had 401Ks until recently. I deposit 10% of my weekly salary in there and then also save agressively in our money market account as well whatever is left over after bills and such are paid.

Re: 401K question

Message edited 10/2/2009 10:45:37 AM.

Re: 401K question

It also really depends on the state of the market, how long she's been contributing at that salary and how much her employer matches her contributions.

I think people should think of it is % rather than total dollar amounts. In my view, people should try to contribute up to the max (15%) if they can. If not, then they should contribute at least 10% of their salary, each year.

If she's been contributing for more than a year or so at her salary, then, no, I don't think she's contributing enough.

Re: 401K question

Message edited 10/2/2009 10:46:56 AM.

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I am only able right now to contribute 3% to my 401k, but my job also contributes 15% into a pension plan for me annually so I have a good bit in those accounts

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Without mentioning numbers I feel that she should be putting away more if possible. The cost of waiting is huge.

I wish I had the oppy to put away the money earlier in my life. I started the 401(k) when I was around 31 and have always contributed 15%. I'm 42 now so 11 years of contributing but it could have been another 8 years if I worked for a place that gave me the opportunity. The tax benefits alone are worth it.

You don't want to have to work when you are 70 and if you are counting on SS then you are fooling yourself.

It sounds like she has never sat down with someone to make her retirement goals. That is when your eyes open up and you say holy crap! You realize that no matter how much you put away, it won't be enough. Some people panic when they are 50 and realize they have next to nothing for retirement.

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Honestly I wouldnt get involved with how much your friend is saving for her retirement. She is a big girl, let her worry about it.

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i started my 401K at my first job out of college..i was allowed to start it after the first year of working there. i started with 3 % b/c i was only 23 i think when i started contributing. I worked there for 3 years by the time i left and i rolled over probably almost $4k to my new job.

at my current job, we get matched up to 6% $1for$1, and after that i think its .50 to the dollar. I contribute 5% of my salary right now.

Im 30 and there's about $25,000 in there. i lost a ton when the economy tanked last year and its just now getting better. JP morgan also manages it for me so i dont have to think about where to invest it. I know nothing about that stuff.

It really depends on when they started investing, how they're investing, and how much $$ they contribute. However, his salary is more than mine so he may want to consider contributing more $$ per paycheck and take advantage of whatever matching system his company may be offering.

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Thanks so much for the constructive information. Its interesting to see the differences and similarities.

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Message edited 10/2/2009 3:30:02 PM.

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We're not overally agressive - since I get a pension, have a nice stock portfolio and some large real estate investments.

so you don't have to have a big 401k, but you should have something.

I read that you should have 4x your salary by the time you are 35. I think it was 15x by retirement.

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They say the more you put in the better. But what is best is to put in whatever match your company offers. If they match up to 6%, you should put in 6%. There are a lot of arguements for and against 401k. The very least you should do is do as much as your company match.

Re: 401K question

Posted by Mikismom

Posted by annoyedTTCer

Posted by Mikismom

I am only able right now to contribute 3% to my 401k, but my job also contributes 15% into a pension plan for me annually so I have a good bit in those accounts

Nice, a 401k and pension plan is rare.

We have a pension plan here but you aren't eligible till you've been here 5 years.

I know, I am lucky

and the pension is 100% employer funded which is awesome

I am fully vested after 3 years of employment, I just became vested in July

Re: 401K question

There are some good resources online you could direct your friend to -
Fidelity.com and Suze Orman have a lot of good advice.

It does seem low based on her age but a lot of things factor in to how much you need once you retire.

I try to put away $ in 401k and a Roth IRA so i will have a mix of taxed and non-taxed $ to draw from when I retire.

I also have a pension at my job but not sure if I will end up staying there long enough for it to make a difference, if i left right now I would get $56 per month! wohoo, can't live on that :)