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  • 401(k), what should I do?

    I wanted your thoughts, Iím 45 with no ďrealĒ retirement and I had stopped the contribution, following Daveís plan, to my retirement. Iím thinking that once CC10 (December) is paid off I should start back, at least contributing 3%. Itís going to take about three years for me to pay off the student loans ($70k). Or should I follow the plan, pay off the student loans and then throw 15-20% to my retirement? I can also max out my HSA that can be a vehicle for retirement as well.




    Whatís your thoughts?

  • #2
    Does the 401k have a company match? If so, you should definitely contribute enough to get the full match. Daveís debt advice is good but his investing advice is not.

    If you donít have a match, a Roth might be a better choice.

    As for the HSA, thatís really down the line after the 401k and Roth are both maxed out. Itís not a first line retirement account in my opinion.
    Steve

    * Despite the high cost of living, it remains very popular.
    * Why should I pay for my daughter's education when she already knows everything?
    * There are no shortcuts to anywhere worth going.

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    • #3
      I'm not too familiar with Ramsey's debt strategy besides the snowball affect, but I'm assuming it's something along the line of pay off all debt first, build EF, and then invest. While it also matters your income, debt, and amount you save, I think the biggest concern is age/time. At your age you may be a little behind for retirement savings, but better late than never.

      I'm with DS on knowing if the 401K matches or not. If so, at the very least you should start with contributing the same amount to that match. Along the lines doing a Roth IRA, if applicable.

      While I personally don't max my 401K, but I do for the HSA (and roth). I may be the minority in this group but I use the HSA as primarily for medical EF, and retirement/investing as secondary. So if you have the option for HSA, I would review any monthly or annual medical expense amounts, if needed. If not, keep banking that amount each year, like I do. I tell my friends the same thing, in one way or another, it's going to be used for medical expenses, just a matter of when.
      "I'd buy that for a dollar!"

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      • #4
        Originally posted by cypher1 View Post
        II may be the minority in this group but I use the HSA as primarily for medical EF, and retirement/investing as secondary.
        I don't think that's unusual. I definitely think the main purpose of the HSA is to pay medical bills. That's how we used ours (I no longer have an HSA plan). I think the retirement piece is secondary.
        Steve

        * Despite the high cost of living, it remains very popular.
        * Why should I pay for my daughter's education when she already knows everything?
        * There are no shortcuts to anywhere worth going.

        Comment


        • #5
          Thanks the company does not match, but Iím definitely going to start contributing the end of the year.

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          • #6
            Originally posted by veronak View Post
            Thanks the company does not match, but Iím definitely going to start contributing the end of the year.
            With no match, I'd go with a Roth IRA. That gives you much more control and better investment options. Plus that way it isn't tied to your job and nothing needs to change if you leave that employer.
            Steve

            * Despite the high cost of living, it remains very popular.
            * Why should I pay for my daughter's education when she already knows everything?
            * There are no shortcuts to anywhere worth going.

            Comment


            • #7
              Originally posted by veronak View Post
              I wanted your thoughts, Iím 45 with no ďrealĒ retirement and I had stopped the contribution, following Daveís plan, to my retirement. Iím thinking that once CC10 (December) is paid off I should start back, at least contributing 3%. Itís going to take about three years for me to pay off the student loans ($70k). Or should I follow the plan, pay off the student loans and then throw 15-20% to my retirement? I can also max out my HSA that can be a vehicle for retirement as well.




              Whatís your thoughts?
              The HSA will prevent you from going into debt for health care expenses, I would prioritize that over the 401k... most companies match on HSA contributions
              I second the advice of getting 401k up to the match

              I restarted all my retirement accounts at age 41 after a divorce, it is possible... just realize you need to think in terms of 20-30% of your income to retirement accounts to make progress and not have to work until you turn 75.
              I would prefer a comprehensive strategy than anything a radio personality advises from selling books . Dave Ramsey is not out to improve your net worth, he is out to improve his net worth.

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