My company only matches 4% for 401k. I have not always put money into a 401k so I feel "behind" even though I'm not even thirty yet. I put 8% in my 401k and 2% in my Roth 401k. My husband told me not to put more than my company match but I feel like we'll just use that money otherwise and not save it.
We are financially ok with the way my matches currently are.
We don't invest any money because we don't feel we have a well enough understanding of it.
Should I be doing something different?
401k matching, less or more?
byu/Ok_Commercial3599 inpersonalfinance
Posted by Ok_Commercial3599
4 Comments
Sounds like you are asking about a framework for what to do with money.
Start with reviewing the Prime Directive in the PF Wiki. It will answer your question and many other questions you didn’t realize you should be asking.
* https://www.reddit.com//r/personalfinance/wiki/commontopics
Not a lot of other detail here about your finances, but a typical rule of thumb is that you want to be saving around 15% of your income for retirement (that includes the employer match). So if you are 8% + 4% match + 2% Roth you are doing OK. A little higher would be ideal especially if you are behind on retirement but you are in the right ballpark.
Money for long-term savings goals like retirement should almost certainly be invested in something, otherwise you are losing money to inflation. Most 401ks offer a one-stop investment option called a “target date” fund where you pick the date closets to your retirement age and they will make all the decisions for you. If you post the fund options (including fees), people on here can weigh in.
You should target 15% of your income for retirement savings if you want to retire in your mid 60’s. 20% if earlier so just putting enough on to get the match will not be enough.
Also, depending on your tax bracket; I would be using more of the Roth
The guidance isn’t “don’t contribute more to retirement than your match” the idea is that you contribute up to your employer match and then X% up to at least 15% of your income to a retirement destination of your choice