Dave Says

380news - February 17, 2018 - Home & Garden - Leave a comment



Dear Dave,
I’ve been following your plan, and I’m ready to start investing. Do employer contributions count toward the 15 percent you recommend putting into retirement?
Brenda

Dear Brenda,
Investing 15 percent of your income in retirement accounts is Baby Step 4 of my plan. That means you’ve already paid off all your debt, except for your home, and you’ve increased your $1,000 beginner’s emergency fund to a fully-funded emergency fund of three to six months of expenses. Way to go!
I want you to control your destiny, so employer contributions do not count toward the 15 percent I recommend setting aside for retirement. The first thing you should put money into is a matching retirement account. If you’ve got access to a 401(k) — and your employer offers a match — you should do that up to the match before anything else.

It’s nice if your company will match up to a certain point, but chances are that will still mean you’ve got some work to do. To make up the remainder, you could look at a Roth IRA. Then if the Roth, plus what you invested previously to get the match doesn’t equal 15 percent, you could see about a 403(b) or go back to your 401(k) to complete the 15 percent.

You’re doing great, Brenda. Keep up the good work!
—Dave



Advertisement

Comments

You must be to post a comment.

Site Login

Lost your password?

   Need to SignUp?

(close)

By logging in, you agree to our Terms of Service and Privacy Policy.

Site Registration

Username must be between 4 - 40 characters, letters and numbers only.

We'll send your registration email to this address. (Double-check your email address before continuing.)

(close)