Just Started? ———
Just Started? ———
You might be presented with a lot of new options regarding credit cards, auto loans, and a mortgage. Are you equipped with the right information to make the smart choices? And then there’s saving for retirement. With everything going on, is that something you should even consider right now?
Every employer’s match is different. Talk with your plan administrator (usually someone in Human Resources or the business manager). They will explain the specifics of the match. In general, an employer match is a contribution to your 401(k) account up to a certain percentage of your salary or your contribution. Regardless of the amount, it is free money to you, and you should take advantage of it if you can.
The short answer is as much as you possibly can! For example, saving $2,000 a year at a 6% annual return could mean as much as $350,000 by age 65. If you wait until age 30, that same investment may only be $250,000. Try to grow your savings as your paycheck grows until you are saving 10–15% of your salary. A good rule is to take half of your next salary increase and save it, then reward yourself with the other half!
Everyone has different needs and expectations. You may want to travel or you may want time for your hobbies. You should plan to have savings to provide at least 80% of your pre-retirement income.
Asset Allocation is the process to balance your risk and reward. It is based on your risk tolerance, investing time horizon, age, and expectations. Everyone is different and we recommend having a conversation with your financial advisor to determine the asset allocation that you’ll be comfortable with.
The maximum contribution can increase each year. In 2022 for participants under 50, the amount is $20,500. If you are 50 or older, you can contribute an additional $6,500. We encourage you to save as much into the plan as you are able.
Debt is expensive and it’s important to understand exactly how much it costs. Paying off your most expensive debt first is important, like credit cards, boat or ATV loans, and student loans.
Investment decisions are based on your asset allocation and your investing time horizon. There are many options and it is important to talk with your advisor about the choices in your employer’s retirement plan.