Just accepted a new job with a $23k pay increase from my current job, with a $10k bonus potential. Base salary is $150k – in HCOL.
Insurance coverage etc is through my husband’s job. My new company does not offer a 401k match (current company is 6% match).
I also am not eligible to contribute for the first 90 days. Should we just have my husband put more of his salary into his company’s 401k and not opt in to mine?
We’re playing catch-up on savings and I would instead take what I would be putting into my 401k and moving into a HYSA to build up our emergency fund, and he would just contribute more to his 401k
Is this stupid? A better way to do this?
New job doesn’t have 401k match
byu/blahblah789123 inpersonalfinance
Posted by blahblah789123
5 Comments
You should absolutely build your emergency fund first, before retirement accounts… at least 6 months expenses. So use the 90 days to start that.
For 401ks, yes, YES, you should always still invest, regardless of matching or not. Matching is a bonus, not the core benefit. Its still a tax deduction, and still tax deferred growth.
Fill your emergency fund, then add to 401k up to his matching. Then you should both have Roth IRAs (you’ll probably have to do a backdoor Roth). Max those.
Then continue in the 401ks and max if you can.
Start here: https://www.reddit.com/r/personalfinance/wiki/commontopics.
Need numbers to be sure, but max IRAs for him and you. Make sure he’s putting in at least enough to max the match. Above that get your emergency fund funded, then additional to retirement would be to which ever plan has better investment options.
> My new company does not offer a 401k match (current company is 6% match).
That just means the first step of the financial order of operations is 0. The order goes
1. Contribute to your company retirement plan up to the match
2. Max out your HSA if available
3. Max out your IRA
4. Max out your company retirement plan
5. Contribute to a taxable brokerage account
> I also am not eligible to contribute for the first 90 days. Should we just have my husband put more of his salary into his company’s 401k and not opt in to mine?
Follow the order above, so yes if you’re maxing both your IRAs.
> We’re playing catch-up on savings and I would instead take what I would be putting into my 401k and moving into a HYSA to build up our emergency fund, and he would just contribute more to his 401k
It depends. How many months of expenses do you have saved currently? The goal is 3-9 months expenses (depending on how long it would take you to replace income and if you have kids or other non negotiable expenses). If you’re closer to 0 months then yes, prioritize your emergency fund. If you have 12 months, prioritize your retirement.
Assuming your husband gets a match, he should contribute enough to get the full match for sure. If he is already getting his full match, you should fund your 401-k, even with no match.
If your emergency fund is lean, it would be a great idea to build it up during the 90 days you cannot contribute to your 401-k.
If you can fully fund your emergency fund before the end of your 90 days, then boost your husband’s contribution until you can start funding your own.