Hi , I just started a new job and its my first time enrolling for a 401k plan(since i just started my career in the US after graduating as an international student) . So my company offers 401k via fidelity . It has an option for enrolling for 4/6/10% . What would you all recommend. I am confused on this. Thanks TC:120k #personalfinance #investments
just maxi it out
Ideally 21% to reach the legal maximum of $23K for people under 50. For an indefinitely long retirement, you need thirty times what you want to withdraw annually. At historic S&P 500 real returns with dividends reinvested $1 today is the same as $2 in 10 years, $4 in 20 years, $8 in 30 years, or $16 in 40 years. Early contributions go much farther.
For someone who is just starting and id recommend max it out.
oh i see , thanks. What’s better HSA or FSA?
HSA and FSA are separate and are for healthcare expenses. HSA is far better but not everyone is eligible to contribute (you must be in a high deductible plan). FSA’s are okay but it is a use it or lose it ever year plan, so only contribute as much as you can realistically project spending in a year, then be sure to spend it.
Try to max out the 401k limit for the year. Take the 23k limit, divide it by the number of paystubs for the year and pay that amount every paycheck
How much does the company match?
“100% company match on the first 4%” this is what its written. what does this mean?
For every deposit you make, up to 4% of your salary ($4800), they’ll match it. It’s basically the only way to get a guaranteed 100% return on investment and you should absolutely contribute at least that much (but probably more).