
Ask HN: Help with 401k & Savings - bherms
My girlfriend is asking me some questions about setting up her 401k and saving money for retirement... Unfortunately, my last job didn't offer it and my new one doesn't qualify until Oct, so I'm an amateur when it comes to retirement saving.<p>She's an RN and makes around $50k/yr right now at 26y/o.  Her work matches up to 6% of what she makes and she currently puts away 6% of each paycheck, but is considering changing it because she's not sure if she's saving too little or too much.  She's considering an IRA or something else as well.<p>She pays around $500/mo for student loans and doesn't have too many expenses outside of that (just phone, rent, etc).<p>My life is actually very similar and I'll soon have the ability to start investing in a 401k, so I figured I might as well learn about it now.  What would your advice be on how much to put away (and where) for someone at this stage of their life?
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zoomzoom
Contribute the max that work will match, and put it in the safest vehicle that
you are given an option to invest in, preferable T-Bills.

The money will add up over time, and it is like getting a 6% raise!

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btmorex
If you're 26 years old, investing in t-bills is a horrible idea. Show me a 40
year period where t-bills have outperformed the stock market.

OP, she definitely put in as much as money as her employer will match. If
there's more leftover, put in another 5k into an IRA (at her salary and
considering she's already investing in a 401k, probably a roth ira is a better
idea).

Put it almost all in a low cost index fund (either one that tracks the S&p 500
or something like vanguard's total stock market fund). If you want you can
stick a little in bonds or international stocks although neither are
necessary.

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brudgers
Employer contributions should be discounted based on the vesting schedule.
Because many employer matches vest over five to seven years, your access to
that money is questionable, particularly in a high turnover industry. Only if
the contributions vest when they are made is employer matching a straight up
winning proposition - otherwise your investment return is more closely tied to
the market.

I believe this article gives a good picture of long term investing [previously
posted on HN]
[http://www.nytimes.com/interactive/2011/01/02/business/20110...](http://www.nytimes.com/interactive/2011/01/02/business/20110102-metrics-
graphic.html?ref=business)

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olegious
I agree, contribute to the max that the work will match, but I would put it
into an age-adjusted fund that is aggressive while you're young but gets more
conservative as you get older. No sense in losing 10-20 years of aggressive
growth return rates...

Also, don't forget to have a liquid cash cushion on hand for unexpected
expenses or things like job loss. Personally I put 10% of each pay check into
savings (until I build up at least 6 months worth of expenses- after that I'll
probably just use it for vacations and the like) and 5% into a retirement fund
(I use a Roth IRA for now).

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bobf
Contribute to your 401k through your employer up to the match level, and open
a Roth 401k to contribute an additional $5k/year there. Build up 6-12 months
of emergency fund savings. Max your traditional 401k to $16,500 per year.
Invest in "target year" low cost/fee mutual funds to get started.

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mfrye
Here's 3 simple goals:

401k @ 6%

Max Roth IRA until $5k

Max 401k until $16500. (Employee contributions don't count against the max)

