Great! Bump your contribution every year. If you run the numbers, you will see that the driver for retirement savings bottom line is the money you save before you are 40. Due to the magic of compounding, it is near impossible to catchup after 40.
I'm in the same boat. I'm 23. I contribute 10% to my 401K. Company matches $.50 on the dollar up to 6%. This talk of Roth IRAs is making me curious, however, I wouldn't know where to start. Thoughts? Thanks guys!
My employee savings plan has the following options: Employee Pre-Tax Employee ROTH Employee After-Tax Currently I'm only contributing to the employee pre-tax, which I guess is just your standard 401K. Is there any reason I should be mixing it up and contributing to one of the others as well? My company also offers a stock deal, where I can decide on a percentage to place into a pool of money, and then at the end of the quarter it purchases stock for me at a 10% discount off of market price. Right now I'm contributing just 2% to that.
Do they match contributions for any/all of those? Max out whatever they will match first. All things equal I think it is best to invest mostly in pre-tax because that brings down your taxable income, then ROTH after that.
Looks like they match .50 on the dollar on the first 6%, for a maximum match of 3%. That applies to both pre-tax and ROTH, so I think the match is the same whether I do 3% in each, or just contribute 6% to my 401K. Currently that's what I'm doing, is putting 6% in the pre-tax 401K and nothing in the ROTH.
That right there can be easy money if you flip the stock as soon as it is purchased. If you put in 10k throughout the year into that, your return would at a minimum be $1000.
He's a vet, so he has help just sitting there, waiting for him to use it if he wants to. The guy certainly earned it. And I disagree with you about the value of a degree, any degree. Of course, a degree should be in something you are interested in, something you want, but simply having a degree, no matter what it is in, will have a major impact on what you earn, and what jobs you qualify for. Not whether you can do the job, but whether they will hire you and give you a chance. It's a hell of a lot harder to go to college when you're older, and possibly have a family, a mortgage, and other obligations. Do it when your young, and then move forward. In my opinion. I know middle aged cats without a degree, and it is hell getting hired without one, and hell going back to school at that age.
I really think it depends on the field, because I somewhat agree with the OP. A degree doesn't deliver nearly the security that it once did. In a lot of industries now experience means way more than a degree. When I got a new job last year at a huge company, the fact that I did or didn't have a degree (I don't) didn't come up once.
I'm glad that it didn't impact you, and agree that college grads have it far tougher now than they used to, although that's more about the economy, than anything else, IMO. The OP, however, is young, and he has government assistance that he earned and is available to him. I won't say he's crazy not to use it and go to school. Heck, he probably just wants to chill for a while after being in the military, and he's getting a good salary for someone his age, especially someone without a degree. And he has his experience in the military behind him, a big plus. So I understand him not being interested in going to college now. What I'll also say, though, is that he'll eventually regret not having done it. IMO, he'll reach a ceiling someday at his company for employees that aren't degreed. A good friend of mine, a guy who's middle aged, has grown kids, and vast experience as a computer engineer, moved to Austin a few years back with his wife, a school teacher. He thought it would be easy to get a good job here, what with the industries in Austin that use his skills. To his surprise, he couldn't get a job. His age was a factor, I'm sure (and it shouldn't be), but what he heard time and again was, "Sorry sir, but we require a college degree." It didn't matter what that degree was in, either. Sure, it would be better to have it related to the field he is in, but that wasn't the main requirement. Well over a year later, and surviving on his wife's salary and savings to stay in their new home by the lake, he finally got a position with Apple. In their call center. Making a fraction of what he made in Houston, where he was established with a large company. Sound familiar?
I would leave it as is but definitely start a Roth if you can, whether it's through them or elsewhere. I don't know if there would be any direct advantages of doing it through them though. I'm guessing that he can't flip the stock immediately since it can only be bought quarterly.
Right, but when the stock is purchased every quarter, it will be purchased at the 10% discount. You can then sell it as soon as it is bought for a quick 10% profit.
there has to be some sort of stipulation(s). otherwise, why would anyone bother with any other retirement vehicle.
I don't think this benefit falls under a retirement one, rather just something the company offers. They usually limit this to 5-10% of your paycheck.
