My 401K and Retirement Planning/Savings

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Topic Author
happydaze412
Posts: 26
Joined: Thu Aug 27, 2020 3:37 pm

My 401K and Retirement Planning/Savings

Post by happydaze412 »

So I have my annual 401k update meeting later on this month and I am currently putting in 3%. My goal is to increase that to 5%.

Income: 30k

My retirement planning for my 401k: (Next 41 years)
Nominal returns: (3.5-4) after fees
Inflation: (3-4%)
Real returns: (0-.5%)

My company matches 3%

So currently total % saving will increase from 6% to 8%.

I also save about 2 oz of silver a month give or take.

Then I’m saving between $250 a month for a future down payment for a house. Once I save 15% down I will feel ready to enter real estate.



Are my real returns for a balanced 401k portfolio over the next 40 years reasonable projection?

Anything I can do with that $250 a month without increased risk of capital loss as it will build toward a home one day? Probably will need it in about 10 years or so.
manatee2005
Posts: 1080
Joined: Wed Dec 18, 2019 9:17 pm

Re: My 401K and Retirement Planning/Savings

Post by manatee2005 »

I don't have an advice on the 401k, but what job are you doing where you have a 401k and make 30k?
terran
Posts: 1728
Joined: Sat Jan 10, 2015 10:50 pm

Re: My 401K and Retirement Planning/Savings

Post by terran »

Great job saving on that income! As long as social security sticks around you should be in great shape. Try to keep increasing the percentage as you get raises. I have a few thoughts, some of which you didn't ask for, so I hope you won't mind me sharing them.

If you expect your income to go higher in the future you might consider investing in Roth instead of traditional 401(k) (if available) or Roth IRA. Consider the effect this would have on your Saver's Tax Credit though.

Depending on the investment option available in your 401(k) you might consider an IRA instead for anything you plan to invest beyond the match.

If you're invested in stocks (as you should be) then your nominal return expectation is low and your inflation expectation is high, so your real return expectation is low. Better to underestimate than overestimate though.

I wouldn't be "investing" in silver. It's a nonproductive asset (doesn't create income like stocks, bonds, or real estate), so it's only value is speculative: whether someone in the future will be willing to pay more for it than you do today. I'd redirect that money to your 401(k), an IRA, or your downpayment fund.
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ruralavalon
Posts: 19726
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: My 401K and Retirement Planning/Savings

Post by ruralavalon »

You are doing a great job at saving. Keep increasing your saving rate as your income grows.

What funds are you using in your 401k account? What funds are offered in your employer's 401k plan? Please give fund names, tickers and expense ratios.

Consider opening an IRA at a low cost provider like Vanguard, Fidelity or Schwab. Especially if poor or high cost funds are offered in your employer's 401k plan.

What is your age? Are you married, do you have dependents? What savings vehicle are you now using for that $250 per month extra savings for the down payment?
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Topic Author
happydaze412
Posts: 26
Joined: Thu Aug 27, 2020 3:37 pm

Re: My 401K and Retirement Planning/Savings

Post by happydaze412 »

That extra $250 a month is only in cash right now.
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