Comments on: Maxing out our 401k and IRA next year

By: Having a baby changes everything | Sense to Save

Having a baby changes everything | Sense to Save — Tue, 13 May 2008 18:28:56 +0000

[...] might recall that I recently shared a goal of maxing out our retirement accounts in 2009. Um. Well…we’ll just have to see how that goes. I’m hoping that we can still do [...]

By: Saving for retirement if your company doesn’t offer a 401k | Sense to Save

Wed, 07 May 2008 19:16:47 +0000

[...] if your company doesn’t offer a 401k May 7th, 2008 at 3:16 pm All this talk about maxing out 401k’s brings me to an important point: Not all employers offer 401k retirement plans. That’s what my [...]

By: The logistics of fully funding the 401k | Sense to Save

The logistics of fully funding the 401k | Sense to Save — Tue, 06 May 2008 15:30:31 +0000

[...] Comments Marcy on Maxing out our 401k and IRA next yearLisa on Maxing out our 401k and IRA next yearjessica @pianomomsicle on Maxing out our 401k and IRA [...]

By: Marcy

Marcy — Tue, 06 May 2008 02:54:19 +0000

Thanks for being so honest and sharing this info…it is inspiring to see what you guys are able to do at such a young age…I wish I had half of your money smarts when I was your age! Keep up the great work! :)

Marcy’s last blog post..A Few Meijer Deals to Note

By: Lisa

Lisa — Mon, 05 May 2008 21:42:53 +0000

Kacie,

I applaud your efforts! You guys will be ready for retirement when it comes! I appreciate your diligence in planning for the future!

Lisa’s last blog post..Savings At Walgreens!

By: jessica @pianomomsicle

jessica @pianomomsicle — Mon, 05 May 2008 20:44:22 +0000

Good for you! You guys are so good at preparing yourself in advance for anything that comes your way: you’re a great team:)

jessica @pianomomsicle’s last blog post..Try them out Thursday! 5.1.08

By: Tee

Tee — Mon, 05 May 2008 17:43:17 +0000

I applaud you for making this goal and publicly announcing it so you HAVE to stick to it!!

One thing I will caution you on is expecting 10-12% consistently in the future. Most economists/high-end investors (Buffett, Bogle, etc.) seem to think that stocks will keep growing, but not at the same rate we’ve seen in the past century. Personally, I’m planning on 7-8%, and if I get more than that, I’d be thrilled.

You are already doing the best thing possible for your retirement, which is to start saving early. The next thing that will help you most is asset allocation - you can afford to be aggressive since you are so young, but make sure you mix large/small/value/growth in both US and Int’l stocks, and have some bonds for a safety net as well. Other than that, just be very mindful of “load funds” and expenses - remember that expenses eat away your returns every year.

Lump sum vs dollar cost averaging could go either way in any given year, so I wouldn’t fret that too much.

To the first commenter: I believe they are talking about a Roth 401k, not a standard 401k, so it would be post-tax money.

Hope I helped, and again, great job!!!

Tee’s last blog post..Food Safety Tips You Need to Know

By: AnnMarie

AnnMarie — Mon, 05 May 2008 16:59:09 +0000

Sure, you can change your 401K amount at any time–you just have to make sure you make it in the right time frame. For instance, at my place, you have do it more than 30 days in advance for it to come out of the monthly paycheck. (I usually forget and think it’s less than 30 days. Then, I have to make a phone call instead of doing it online and they always are able to do it. But it’s a hassle.)

There IS a problem with doing it in large chunks however: You lose out on dollar cost averaging. What if the market goes up during the year? Then, you put your entire $20,000 in at a high point. If you do it throughout the year, you might fluctuate prices–some high, some low, some in between.

You probably cannot do it with money in your checking account as another commenter implies. You usually can only contribute to the company-sponsored plan through paychecks. So you also have to be sure that you have enough in each paycheck to cover your amount. You can’t do it all in one or two months. You can, however, wait on the Roth IRAs, instead, and just do them lumpsum at the end of the year. You still lose out on dollar-cost averaging, but it gives you some flexibility.

Remember, if you start out at the high amount you really hope for, you can always change your mind and change the 401K withholdings to a lower amount.

By: castocreations

castocreations — Mon, 05 May 2008 16:58:11 +0000

That is wonderful!!! A very valid goal for sure. Compound interest is super important. We need to contribute more to our 401s, but we’re working to pay off our credit cards and car payments. And saving to buy some land.

castocreations’s last blog post..Manic Monday - Fresh

By: S.B.

S.B. — Mon, 05 May 2008 16:44:36 +0000

You can do it! I think that would be awesome and it will pay off long term! Keep us posted on how it shapes up in 2009.

S.B.’s last blog post..ACME Markets!!