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How Much Should I Put in My 401K?

This question was shared by member elisabeth in our Ask Savvvy? group.

I know you should try to max out your 401K each year, but I don't make enough to put in the max. I have been out of a college for a few years and feel like I should start contributing as I have a good job and have been able to save quite a bit of money as my rainy day cushion. But I want to retire in 30-40 years — hopefully! It seems so far away, but I know the sooner you start the better. What is a good percentage to put away and how much does the average recent college graduate contribute?

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socalbeachgal socalbeachgal 6 years
Start small (2-3% at first) and since the 401k contribution is pre-tax you probably won't even notice much difference in your net pay. If you employer matches, try to max the match. Good luck,
Ileane Ileane 6 years
The first thing you should consider is - how much does your employer match your contribution? It would be nice if they match your contributions by at least $.50 - $1.00. If you look at it this way it's like getting a bonus from your employer. Since you're in college you should put at least 2 -3% in for now if you can afford it. You build on that over time by raising your contribution each time your employer raises your salary. So if you get a 3% raise next year, put another 1% or 2% in your 401k until you max out. The good thing is that you have plenty of time to max out. I hope this helps.
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