Quote:
Originally Posted by adaway
Sweeps, jimOhio...yes I will make changes to max out 401k contributions (change from 3 to 8%.) I have to wait a few months before I am permitted to make the change but it takes first priority on my list of changes to make.
After I make that change should I at some point look into an IRA to contribute an additional 2% of salary? That would total up to 10% salary going towards retirement...I thought I read that this is the recommended percent that one should contribute. I am in my mid-30's and I had a late start to retirement contributions. Current total in 401k is only ~6k.
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If I understand things correctly, that's great that you are increasing your contribution to 8%, only put up to their match though, if there is an 8% match, your lucky!
Then, yes, increase your witholding to at least 1, no reason to give the government a loan! Here is good calculator on the IRS website to figure out how many allowances you should take.
IRS Withholding Calculator
What is your interest rate on your student loan? It does sound like a large loan (in the $100k range?). Depending on your age, I would probably pay this down a bit before you save up 6 months worth of an emergency fund (unless that would only take you a month or two. Also, I would hold off on the Roth IRA until you get you student loan down a bit. If you pay extra money on your school loan do they put it towards principal or interest payments? Finally, have you consolidated your loans already?
As for your emergency fund, why not put $1 in one of the higher interest online banks (I highly prefer EmigrantDirect over all of the others), once you feel comfortable with them and your $1 has been transfered, you could put more money in there. Don't lose out on the interest! Here is a calculator that let's you compare how much more interest you will earn with changing banks.
The Ultimate Interest Rate Chaser Calculator » My Money Blog
Some of what you said about taking out $10,000 from your Roth for a first time home buyer is true. However, this is not advised at all. Keep your retirement money for your retirement.
Roth IRA - Wikipedia, the free encyclopedia
Once you have your 6 month emergency fund, and get your student loan in order, start saving for a down payment for a house. You can easily set up subaccounts in any of the online banks (labeling one as "Emergency fund" and one as "Down payment" can help with your organization of your money).
How much extra money do you have after each month of bills?
I'll look forward to hearing about your decisions that you make.