

Ask HN: How much do you put in your 401k? - gt565k

I&#x27;m 25 yo with a CS degree from a top school in the US. I have plenty of experience and I don&#x27;t think I&#x27;ll ever be out of a job or not want to code for a living.<p>A lot of people my age, in a similar situation, tend to not put any money into retirement savings.<p>I think part of that stems from the skepticism we millennials have about the uncertainty that the future holds, stock value, etc...<p>i.e. &quot;Why should I put in 6-10% of my salary when I don&#x27;t know what 25 years from now look like?&quot;<p>Personally I&#x27;m putting in 6%, but I can probably do 12%.<p>I&#x27;d like to know what other people&#x27;s stance on this is.<p>Are there better ways than a 401k to invest 6-12% of my salary?
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WorldMaker
The most important bottom line is: Maximize your employer's match. Whatever
the maximum match you can get from your employer is, go for it. That is money
that is a part of your salary plan that you don't get at all if you don't
contribute your share of.

Beyond that, a good 401k Provider is going to give you the option of HOW you
invest that money you are "forced" to save. It's a stock account that you
ultimately own and control. The only difference between that and say a
Scottrade account you set up on your own without your Employer's involvement
is the way taxes on your 401k work: Money that goes into the 401k is BEFORE
your income taxes are calculated and if you manage to wait to your retirement
age to withdraw from that account you NEVER pay income taxes on it. (This is
why there are people that try to minimize their income taxes by maximizing
their 401k contributions as much as they can afford...)

That said, you can withdraw from your 401k at any time if an emergency were to
happen and you need access to those funds. It's your money. You just have to
be sure to set some aside for Uncle Sam and the IRS when you do. (A good 401k
Provider will even help you with that.)

I am not a Accountant, and you may want to ask one for specific advice for
your lifestyle, but I had the same question when I was trying to figure this
stuff out at 25. Hopefully this helps.

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dudul
"Why should I put in 6-10% of my salary when I don't know what 25 years from
now look like?"

To me that's even more of a reason to put money aside. in 25 years social
security may be bankrupt.

I personally put 10% aside in addition to the employer's match (so in effect
13%) and I'm 28. Note that there is a yearly limit (somewhere around $15,000 I
think, not really sure).

