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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?

Share your tips in comments, then submit your own career or finance question for me to answer while giving other readers the opportunity to weigh in. Ask away by posting your questions in the Ask Savvy group.

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socalbeachgal socalbeachgal 7 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 7 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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