AUradar

I think the maxium you can contribute is $15K a year. Is that for each account? In other words, can I put in 15K to mine and my wife put 15K in hers? Not that we are going to do that.

Second question, how much of your salary have ya'll found to be a good amount to put up. A good general rule of thumb. I know thats a loaded question, but have ya'll (the finicial guros here) found a general point? The first answer is contribute to your 401K to take full advantage of your employer's matching. But they just changed and will now match up to the $15K (your max contributuion). I can't quite go that much right now, but how much should I be putting up?

I've heard 10%, but then I've also heard 6%.

Chasin' Tales

Put as much into it as you can possibly afford. Go 15% if you can. Especially if your employer matches.

mudskipper

$15k max per person.........forget the 6%, 10% or 15% crap............you need to put in as much as you can comfortably add.........sit down with your spouse and write out a budget........YOU WILL INSTANTLY MAKE 50% ON EVERY DOLLAR YOU CONTRIBUTE UP TO 15K!!!!!!!.........you need to add as much as you can, only you know this answer

bamasam

First rule of thumb is invest the amount that you are comfortable with, by that I mean what you can afford to put up without putting you in a bind on your finances. When you put the money in it forget the money, DO NOT borrow or take money out of the 401k plan!!

First thing is to put aside an amount to cover your bills for at least 3 months for emergency back up if anything were to happen to either of you, ie .. sickness, injury, layoff.

Second is make sure that you have a widely diversified plan based on how soon you would be looking at retireing. Some plans even have set groups of diversity based on what year you would like to set for retirement..ie. 2015, 2025. Like you have allready stated make the most of your employers match and forget the money for a long time :banghead

jim t

It's $15,500 in 2007 and 2008. That's in EACH account. If your 50 years old or olderyou can add an additional $5000 into the the 50 year old's account.

Do you and your wife work for the same company? IfNOT and you cannot afford to max out both, contribute as much $$ into each account as you can afford per month. Oncethe plan with the lower match has maxed out the company match, put all further contributions into the other account.

You really, really need to try to take advantage of the company matching funds!!! It's a PAY RAISE!!!

Do you use Quicken? If not, get a copy and spend some time inputing your last couple months bank statements...(some banks allow you to download a statement to Quicken). Then closely monitor where EVERY dollar goes.

It's any easy way to track that old "budget" your grandmother used to talk about You'll be able to tell in a couple months what you can truly afford to save... and where you can cut corners to save a little more.

Jim

__________________
GO GATORS!!!

AUradar

my wife is a school teacher, they put 9% of her salary up with no matching. You get it regardless of whether or not you contribute. So for her, there's no incentive to put her money up in that account. Therefore, we need to max out my account because I get the matching.

I agree with putting up till it hurts and budgeting and everything. But at the same time, I've trying to find out a minium amount you need to put up. I guess its just not that simple.

Right now my theory is put any long term savings up in my 401k before putting up elsewhere. College funds for example. If I'm not taking advantage of my employees matching, I figured its better to put money in the 401K and take a penatly down the road for college then it would be to limit 401K and start a 529 plan.

jim t

Here's a pretty good website that you can play with to see what your future MIGHT hold...

http://dinkytown.com/java/Retire401k.html

In your case, I wouldn't put ANY money in your wife's 401k until you've maxed your's out.

And if you start early college costs can be covered at about $3.00 per day.

http://www.florida529plans.com/

And an EXCELLENT read on budgeting and saving... like your grandma did.

http://books.google.com/books?id=5O7SAgAACAAJ&dq=inauthorave+inautho r:Ramsey

He can be a bit preachy at times, but it's not "scriptural" as Yahoo describes,and it's simple advice and it'll work.

Good luck,

Jim

__________________
GO GATORS!!!

Telum Pisces

Dang,

Your employer matches 100% up to that $15.5K? That's pretty good. I only get matched 100% up to 3% and 50% on the next 2%. After that 5% they don't match anything.

AUradar

no, they match 50% up to $15K. It's no longer matched based on how much of your salary you put up, they match up to the limit. Pretty good. It used to be 100% upto 6%, they then changed to 50% up to 15%. You could then get more but it cost you more as well. Now its just 50% upto maxium allowed contribution.

jim t

That change is pretty significant... in the "old" 100% match up to 6% it cost the company $6000 for the $6000 you contributed. NOW you'll only get $3000 in matching funds for that same $6000 that you contributed.

Now, it'll take $12000 of YOUR money to get $6000 of THEIR money!

That's the break even point when you compare the old and new plans.

IF you can afford the full $15,500 you'll get more ($7750).

The company pulled a fast one on most of it's employees... BUT it IS better IF you can contribute more than $12000! Until then you lose company contributions with the new plan.

Sneaky huh? Unless you do the math, the NEW plan sounds better... for A LOT of employees who cannot afford to contribute more, the company makes HUGE gains.

Jim

__________________
GO GATORS!!!