How much do you put in your 401K and other questions

HM2VikingRN, RN · Jun 14, 2008

10% is sort of the standard recommendation. I just accepted a job at the VA. My match will be 50% of contributions of up to 10% of pay. (IOW if I contribute 10% they will match it 50 cents on the dollar.)

Generally 401ks allow you to pick from a variety of funds NOT individual stocks.

There are tons of portfolio allocations but generally in your 20's it would be 75% equities/25% fixed income as an allocation.

What you want is funds with extremely low administrative fees because those fees can eat up 30 percent of your gains over time.

Don't even think about trying to time the market.

Read:

Very good information and he is a very accessible writer.

THE MOST IMPORTANT THING IS TO START CONTRIBUTING. That was my mistake. I am lucky because I have a pension plan through my current employer but I really wish I had started deferred comp on day 1. You never miss money that you don't see.

rph3664 · Jun 14, 2008

I don't go around asking my co-workers if they have a 401(k), but the tiny number who do horrifies me.

I contribute 15% because I can afford it, being single and childless, and it gives me a HUGE tax break. My employer only matches 4% at 25%, but that 1% is a free half-hour of pay every week. So many people don't seem to realize that, and trust me, it's adding up!

My brother and SIL both used to work for a mutual funds company, and have given me terrific advice on how to invest. I'm quite diversified, and still do a certain percentage of high-risk investments because I have 15 years and 3 months to go before I can access that money.

Unless you're in a situation where this would mean your kids would go without necessities (I have wondered more than once if my parents did this :down: ), you SHOULD at least contribute something.

If nothing else, that money is there in case something really catastrophic would happen to me.

I also have some CDs and savings bonds as an investment that would be easier to liquidate should that rainy day arrive.

p.s. The hospital where I work has a pension plan as well - 5% of one's income in a plan that can be accessed at age 65.

lifesabeach08 · Jun 14, 2008

I'm also new to this and this is my first time putting money away as well.

1. I contribute 10% although he told me that this was a large amount compared to how much others contribute (but he said since I'm young I should be a very happy lady by retirement...)

2. My employer contributes .30 cents for every dollar after I have worked there 1,000 hours

3. As of right now, this 401k is my only source of investment, but I may invest in something else later.

4. I was able to pick the stocks I invested in, however, trying to learn about stocks makes my head hurt so he helped me out alot.

5. My ideal age of retirement would be at about 60.

Hope this helps.

SharonH, RN · Jun 15, 2008

Hey everyone,
I'm at the beginning of my RN career and this will be the first time I'll be putting any money away for retirement.
I want to know what everyone does with their 401K. Here are my questions:
1. What percentage of your pay do you contribute?
2. How much does your employer contribute?
3. Is your 401K your only source for retirement, or are you doing something else?
4. Can you pick which stocks you invest in?
5. When would be your ideal age for retirement (assuming you are healthy enough to work and could quit at any time)?
I plan on contributing 6% of my pay and the hospital will match it 25 cents for each dollar (so if I put in $100 they will put in $25). Is that the norm? I thought it sounded kind of low because I thought a lot of businesses would match you dollar for dollar.
I'm just worried about having enough money for when I'm old and can't/don't want to work. I watched a program on PBS recently that talked about families not having any savings and how hard it is for them being older and having no security. It scared the crap out of me and I'm only 25! lol
Thanks to anyone who answers my little survey!

1. I contribute 15% which is the max allowed. I put in so much because I wasn't as smart as you when I was younger so now I am playing catch up. That is a very bad position to be in.

2. My company matches with 3% and then they give me 6% of my pay whether or not I contribute anything.

3. I also have a ROTH IRA as well as my emergency savings, and individual stocks.

4. Yes. You will receive prospectus which shows what risk tier the individual funds are in as well as the rates of return. At your age, you can afford to be less conservative.

5. I think I would like to retire at 50 but I know I would be bored at such a young age so it would probably be closer to 60. I would like the OPTION to retire at 50.

Contributing 10% is a pretty good number although if you want to set aside 15% or even more for retirement(not necessarily in your 401K) then you should be a wealthy woman by the time you are ready to retire.

mshultz · Jun 15, 2008

Hey everyone,
I'm at the beginning of my RN career and this will be the first time I'll be putting any money away for retirement.
I want to know what everyone does with their 401K. Here are my questions:
1. What percentage of your pay do you contribute?
2. How much does your employer contribute?
3. Is your 401K your only source for retirement, or are you doing something else?
4. Can you pick which stocks you invest in?
5. When would be your ideal age for retirement (assuming you are healthy enough to work and could quit at any time)?
I plan on contributing 6% of my pay and the hospital will match it 25 cents for each dollar (so if I put in $100 they will put in $25). Is that the norm? I thought it sounded kind of low because I thought a lot of businesses would match you dollar for dollar.
I'm just worried about having enough money for when I'm old and can't/don't want to work. I watched a program on PBS recently that talked about families not having any savings and how hard it is for them being older and having no security. It scared the crap out of me and I'm only 25! lol
Thanks to anyone who answers my little survey!

I see that you are also from Ohio. If you can get a job in Ohio with a state, county, or local government, you will be covered by OPERS. Under OPERS, your retirement will be 2.2% per year for the first 30 years, and then 2.5% for each year after 30. This is based upon the average of your highest 3 years. So, if you retire at 30 years, you would get 66%. Retire at 40 years and you would get 91%. It's almost impossible to beat this pension. OPERS is a substitute for Social Security. We do not pay into Social Security, and are not eligible for it (Unless you have SS credits from other employment).

But wait, there's more! You can contribute up to $15,500 ($20,500 if you are 50 or older) into deferred compensation. The taxes on this are deferred, so that you are earning interest on the government's money. You simply can not beat deferred compensation.

I paid off my mortgage by the time I was 40, and soon thereafter maximized my deferred compensation. I am putting $15,600 into my deferred comp, and $4,900 into my Roth IRA ($20,500 total). I have a choice of investment options for both accounts.

The local hospital is one of the few local government hospitals left in Ohio, and their nurse vacancy rate is under 1%. I am not a healthcare worker, but have to assume that these Ohio government healthcare positions are quite competitive.

mshultz · Jun 15, 2008

10% is sort of the standard recommendation. I just accepted a job at the VA. My match will be 50% of contributions of up to 10% of pay. (IOW if I contribute 10% they will match it 50 cents on the dollar.)
Generally 401ks allow you to pick from a variety of funds NOT individual stocks.
There are tons of portfolio allocations but generally in your 20's it would be 75% equities/25% fixed income as an allocation.
What you want is funds with extremely low administrative fees because those fees can eat up 30 percent of your gains over time.
Don't even think about trying to time the market.
Read:
Very good information and he is a very accessible writer.
THE MOST IMPORTANT THING IS TO START CONTRIBUTING. That was my mistake. I am lucky because I have a pension plan through my current employer but I really wish I had started deferred comp on day 1. You never miss money that you don't see.

Although we do not agree on politics, we certainly agree on financial advice. I probably have a dozen books on finances, and Andrew Tobias is the best in every respect. Not only should you buy this book, but every time he comes out with a newer edition, buy that, too (I think I am on my third update now).

Sarah Bellum · Jun 15, 2008

1. What percentage of your pay do you contribute? 15%

2. How much does your employer contribute? zip, zero, zilch :down:

3. Is your 401K your only source for retirement, or are you doing something else? I maxed out my Roth IRAs for this year and I have a couple small IRAs from previous employers.

4. Can you pick which stocks you invest in? Ya know, I didn't look too closely at the specifics. I picked a particular mix based on risk, there were several to choose from.

5. When would be your ideal age for retirement (assuming you are healthy enough to work and could quit at any time)? Hmmm, maybe around 70-75?

Like someone else said the big thing is to just contribute starting young. Compound interest is a powerful thing!

SharonH, RN · Jun 15, 2008

Funny thing, after posting to this thread last night I was watching Suze Orman last night and a nurse called into the show

in tears.

She and her husband, a physician, have over $70,000 in credit card debt.

He has over $200K in student loan debt.

They have a mortgage of $650,000 with and additional $118,000 home equity loan, and she feels the house is worth significantly less than they owe(~$400K). Savings and retirement are nonexistent.

He makes over $200K per year plus bonuses. She only works one day a week because the nearest job for her is 45mins-1 hour per day which is exactly the length of my daily commute but hey, different strokes.....

She specifically stated that they were trying "to keep up appearances" and now she can't sleep due to the fear. That's a terrible way to live, isn't it?

That just goes to show that high income does not equal financial security. It's now what you make, but what you do with it. Keep up the good work. As others have said, the important thing is to save.

rph3664 · Jun 15, 2008

Funny thing, after posting to this thread last night I was watching Suze Orman last night and a nurse called into the show
in tears.
She and her husband, a physician, have over $70,000 in credit card debt.
He has over $200K in student loan debt.
They have a mortgage of $650,000 with and additional $118,000 home equity loan, and she feels the house is worth significantly less than they owe(~$400K). Savings and retirement are nonexistent.
He makes over $200K per year plus bonuses. She only works one day a week because the nearest job for her is 45mins-1 hour per day which is exactly the length of my daily commute but hey, different strokes.....
She specifically stated that they were trying "to keep up appearances" and now she can't sleep due to the fear. That's a terrible way to live, isn't it?
That just goes to show that high income does not equal financial security. It's now what you make, but what you do with it. Keep up the good work. As others have said, the important thing is to save.

People who live beyond their means in order to keep up appearances do not fool anybody, or impress anybody either.

I also know far too many people who spend their money on fun things first and pay their bills with whatever's left over. These are the people who are constantly whining about how they don't have any money.

:vlin:

rph3664 · Jun 15, 2008

People who live beyond their means in order to keep up appearances do not fool anybody, or impress anybody either.
I also know far too many people who spend their money on fun things first and pay their bills with whatever's left over. These are the people who are constantly whining about how they don't have any money.
:vlin:

One other thing. People who have fallen on hard times because of things out of their control like downsizing or huge medical bills don't complain, at least not like those who did it to themselves.

When my sister was in college, she got herself into trouble with her credit cards and it was NOT because she was using them to purchase necessities! She was buying things like restaurant meals and designer-label clothing, and the minimum payments eventually got to a point where she couldn't make them. She approached our parents to bail her out, and they refused to do so. In order for her to stay in school, she decided to participate in some studies, and donate blood components, and this money was used for that purpose and she learned a valuable lesson.

BlueRidgeHomeRN · Jun 16, 2008

i'm putting in 10%, employer matches the first 3%, but i am almost 50 and playing serious "catch-up". luckily, my dh is a teacher, so he has a small, traditional pension.

not complaining, though..we were blessed with a refi last month that leaves us 20% equity and cleared all our debt except one low-rate card, which will be done, lord willing, in 13 months. we are empty nesters and had a lot of debt and minimal savings from our sons' college years. our cars are 10 years old or more, the equity in the house is mostly sweat-equity, but we feel blessed.

the op is a very smart cookie for thinking about this now. compounding interest can be your best friend--or worst nightmare! :clown:

MiaKeaRN · Jun 16, 2008

This is a great thread! I don't have much to contribute here, but I am learning so much from the detailed explanations. :flowersfo