Asked by ErnestoT on March 19, 2008
Hey guys,
As the title suggests I’ll be enrolling in my companies 403b plan. I’d like to ask you guys some general questions and hopefully get everybody’s opinions on things. Below is my companies policies for our 403b plan. Just some basic information for you guys. I’ll be making another post regarding the funds.
Company Vesting by year:
Less than 3 - 0%
4 years - 20%
5 years - 40%
6 years - 60%
7 years - 100%
Company Contributions:
1-5 years - 3%
6-10 years - 4%
10 or more - 5%
Currently I am 24 years old. I have zero debt (I’ve paid off all my credit cards, etc..) and my bills right now consist of cell phone, car insurance, Internet, and groceries. The rest of my money is being contributed to my GMAC MMA account. Right now I live at home so I’m not paying rent although that might be changing in the next couple of months. So some of my general questions are:
1. What percentage/amount of my paycheck do you guys think I should contribute to my 403b with my current situation?
2. Is there a way to calculate exactly what my paycheck would come to after my 403b contribution is deducted?
3. Do you guys know of any calculators online which would be useful in a situation like this. Where it could help suggest how much I should be contributing by taking into consideration my salary/expenses.
4. How many funds should I be spreading my contributions out between? Is there an ideal number for someone my age or does it depend more on how many worthwhile funds there are to choose from?
These are my basic questions. I would love to here what you guys are currently doing when it comes to contributing to your 401k. I’ll also be making a post with an outline of the fund selection that I have. I decided to leave that to a whole new topic with the suggestion from Paul to really get the discussion going. It will be fun and veerry helpful getting everyones opinions on the funds and which ones I should be picking.
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Categories: Mutual Funds, Retirement