- Invest 15% of income before taxes (see table below)
- Don't count any company match as part of that 15%
- 15% is a recommendation. You can go up or down a few percentage points as desired.
- This is a long term investment
- Invest in mutual funds with good track records over the past 5 - 10 years.
- Allocate 25% of investment into Growth and Income Mutual Fund
- Allocate 25% of investment into Growth Fund
- Allocate 25% of investment into an International Fund
- Allocate 25% of investment into Aggressive Growth Mutual Fund
What we are currently doing is investing 5% of my salary into company 401(k) plan. My company matches the first 3% 1:1 and the next 2% .5:1 for a total company match of 4%. Prior to starting Dave's baby steps I was investing more than 5% into the 401(k) but we felt we could slow up on the 401(k) for a little while and concentrate on getting out of debt and fully funding our emergency fund. I have been fortunate enough in the past to be able to max out my 401(k) so we have a nice little nest egg built up. When we reach this step I will either split money between two Roth IRAs or take advantage of a company offered Roth 401(k) for me and a Roth IRA for Donna. We'll see what's available when we reach this step which we currently project to be January 2014.
| Gross Income | 15% Investment | Per Month | Per Pay Period assuming 2x periods per month |
|---|---|---|---|
| $10,000.00 | $1,500.00 | $125.00 | $62.50 |
| $15,000.00 | $2,250.00 | $187.50 | $93.75 |
| $20,000.00 | $3,000.00 | $250.00 | $125.00 |
| $25,000.00 | $3,750.00 | $312.50 | $156.25 |
| $30,000.00 | $4,500.00 | $375.00 | $187.50 |
| $35,000.00 | $5,250.00 | $437.50 | $218.75 |
| $40,000.00 | $6,000.00 | $500.00 | $250.00 |
| $45,000.00 | $6,750.00 | $562.50 | $281.25 |
| $50,000.00 | $7,500.00 | $625.00 | $312.50 |
| $55,000.00 | $8,250.00 | $687.50 | $343.75 |
| $60,000.00 | $9,000.00 | $750.00 | $375.00 |
| $65,000.00 | $9,750.00 | $812.50 | $406.25 |
| $70,000.00 | $10,500.00 | $875.00 | $437.50 |
| $75,000.00 | $11,250.00 | $937.50 | $468.75 |
| $80,000.00 | $12,000.00 | $1,000.00 | $500.00 |
| $85,000.00 | $12,750.00 | $1,062.50 | $531.25 |
| $90,000.00 | $13,500.00 | $1,125.00 | $562.50 |
| $95,000.00 | $14,250.00 | $1,187.50 | $593.75 |
| $100,000.00 | $15,000.00 | $1,250.00 | $625.00 |
So how about you? Do you currently invest for your own retirement? If so how much and do you use a 401(k) or Roth IRAs or a mixture of both?
right now i only put 3% of my salary into 401K and company contributes 3%, for a total of 6%. we opened roths but only contributed the first month. i hope to start contributing again! i also have a pension though and if my husband ever gets hired as a firefighter (he will!) he will have a pension too
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