What percentage of your salary to put in a 401K???

ablaye · Joined: 16 Aug 2007 Posts: 14

I was just wondering what is a good percentage of your salary to put in a 401K.
Currently, I am putting 5% of my salary in a 401K.
Do you guys think that this is too low???
How much money do you put in your 401K???
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Tag · Joined: 23 Sep 2007 Posts: 24

what is a 401K exactly
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MikeH · Joined: 17 Feb 2005 Posts: 112 Location: UK

found this-

A 401(k) can be one of your best tools for creating a secure retirement. It provides you with two important advantages. First, all contributions and earnings to your 401(k) are tax deferred. You only pay taxes on contributions and earnings when the money is withdrawn. Second, many employers provide matching contributions to your 401(k) account which can range from 0% to 100% of your contributions. The combined result is a retirement savings plan you can not afford to pass up.

Essentially it is a pension. How long is a piece of string. If you are 40 and you have just started a pension then i doubt that 5% will provide you with a great fund. However it all depends on growth rates and i am no investment advisor.

Mike
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Tag · Joined: 23 Sep 2007 Posts: 24

ah yes I was thinking about getting a pension, you think I should?
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Stroh · Joined: 21 Oct 2007 Posts: 11

5% isn't a whole lot to put in, I'd suggest maybe 8-10% though I am not really a financial advisor.

capebretoner · Joined: 02 Aug 2006 Posts: 82

Well we don't have a 401k in Canada, but I do contribute about 3% for my pension fund, and another 10% goes in RRSP. ON top of all of that I have another 2.5% that I put into a "fun" investment fund that I am using to both save up for a house and learn the investment game
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ablaye · Joined: 16 Aug 2007 Posts: 14

A 401K is a retirement account where you can put money in before taxes are applied to your earnings.
This is a US thing, so if you don't live in the US, you would not know about it.
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