This should sum it up, all @ 51 CPM with .14 being per diem.

Ignore everyone that tells you to put in 15 percent or more into a 401k.

Just put in from 4 to 6 percent and plan to never ever withdraw the money, it's for your retirement.
Plus your employer may match what you put in so there's a little free money.
And you interest or earnings won't get taxed until you're real old and start withdrawing the money,

 

401k RULE #1: If you're company has a 401k, ask how much the match is. Put in as much as the match or more if you can. The match is free money, and basically you're earning 100% interest on your contribution.

RULE #2: 401k ROTH or Standard 401k?

The concept of a standard 401k contribution is that your contribution is tax free now but you pay taxes on the withdrawals. There is also a ROTH option where you pay taxes on the contribution now but future withdrawals are tax free.

The question anyone needs to ask is "is my income tax rate lower now or will it be lower when I'm retired"

If you are going to have a lower tax rate NOW, then contribute to your 401k as a ROTH contribution, so you'll pay taxes NOW, and it will be tax free later, when you're rate is lower.

If you are going to have a lower tax rate when you retire, then contribute to your 401k pre-tax, so you'll pay taxes later when you retire, and it will be tax free later.

Those two rules are it, don't let any financial adviser over-complicate it.

Someone didn't believe me when I told them about rule #2, they said but wait it will grow tax free, yadda yadda yadda. I asked if 5 x 2 x 3 is the same as 3 x 2 x 5? Well yes it is. Same thing. Tax rate x interest is the same as interest x tax rate.... only variable is your tax rate.....

 

Disclaimer: This is just *personal* philosophy and by no means am I saying this is what everyone should do.

That said, I generally subscribe to not paying Uncle Sam one cent until I have to. Thus, I generally do things pre tax. My thinking is I’ll have a lessor tax burden when I’m old and infirmed. Lol

But again, that’s just me. The important concept here is that you take advantage of free money. If a company is willing to match, you should take advantage of it.

 

The ROTH option is available on many company offered plans

Can add up to $18,000 a year ....

Taxed now before it goes in ... not Taxed later ..... with the right investments and economic conditions one could retire very well and tax free

 

How can you possibly know that having worked there approximately a month?

What is your home time?

Are you on a dedicated account?

13k miles since solo tells working way to hard.

 

401k at 24 is good. A Roth IRA would be better. The older you get, the better a 401k looks because the initial company matching is powerful. But 401k savings are taxed on withdrawal, which creates an enormous tax burden on your retirement if you have been saving for 40 years or more.

Roth IRA are NOT taxed on withdrawal, so if you save for 40 years or more on a Roth, ALL that money is yours.

 

i am nearing retirement and i am very glad i have been putting the amount of the company match forever
i wish i put in more
that money will be locked up until you are 70 unless you declare you are unable to work any more
there is like 50 % percent charge in taxes and penalties for early withdrawel
when your only income is social security your tax rate on the 401k withdrawals will be low
i have a vanguard roth ira and a small vanguard traditional ira
you can with draw your contribution from the roth ira with no penalty but not the gains
if you change jobs you can roll the 401k into a traditional ira

 

Can withdraw at 59 1/2 if certain conditions are met

 

Yeah, sure he is. Ha ha.

 

hard to keep track without revisiting all of it
when you start the ira or 401k you have a large menu of stocks and bonds where you select where your investments will go
most people use the shot gun approach and spread it all over
i told a friend you are just starting the account
you have no balance to lose
just put it in the high risk investments
when your balance goes up you can move small amounts to bonds or large cap stocks which are safer every month
several months later he thanked me for earning him 11000$