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UPS Retirement Topics
401k for dummies?
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<blockquote data-quote="PiedmontSteward" data-source="post: 2196373" data-attributes="member: 42270"><p>The general rule of thumb that I've followed/will follow with <strong>extra</strong> cash (assuming all regular bills are paid/current) is the following in this order:</p><p></p><p>Have a 1 month emergency fund</p><p>Contribute to 401k up to matched contributions (doesn't apply to us at UPS as non-management)</p><p>Pay off all high interest debt (primarily credit cards, anything over 7.0% APR applies)</p><p>Contribute a certain percentage to your 401k (this varies for me, but I've been using mine as a "tax shelter" the last few years to reduce my tax burden when I work side jobs as a 1099 contractor -- typically I contribute up to 13-14% when I have a side job and it drops down to 7.0% when I'm between gigs)</p><p><strong>Have a 3 month emergency fund </strong>(this is where I'm at right now)</p><p><strong>With loans that allow you to "pay ahead", get 3 months ahead if possible </strong>(I do this with my student loans in case I get canned so I don't have to worry about getting nailed with late fees/garnishment in a worst case scenario)</p><p>Have a 6 month emergency fund</p><p>Pay off low-interest loans (this would apply to my car loan, which is under 2.5% and my home loan which is under 3.0% -- probably not going to be at this point for a few more years)</p><p></p><p>Might as well build your 401k now while you're young so it can be established by the time you're a regular FT driver but otherwise it sounds like you're the man with the plan.</p></blockquote><p></p>
[QUOTE="PiedmontSteward, post: 2196373, member: 42270"] The general rule of thumb that I've followed/will follow with [B]extra[/B] cash (assuming all regular bills are paid/current) is the following in this order: Have a 1 month emergency fund Contribute to 401k up to matched contributions (doesn't apply to us at UPS as non-management) Pay off all high interest debt (primarily credit cards, anything over 7.0% APR applies) Contribute a certain percentage to your 401k (this varies for me, but I've been using mine as a "tax shelter" the last few years to reduce my tax burden when I work side jobs as a 1099 contractor -- typically I contribute up to 13-14% when I have a side job and it drops down to 7.0% when I'm between gigs) [B]Have a 3 month emergency fund [/B](this is where I'm at right now) [B]With loans that allow you to "pay ahead", get 3 months ahead if possible [/B](I do this with my student loans in case I get canned so I don't have to worry about getting nailed with late fees/garnishment in a worst case scenario) Have a 6 month emergency fund Pay off low-interest loans (this would apply to my car loan, which is under 2.5% and my home loan which is under 3.0% -- probably not going to be at this point for a few more years) Might as well build your 401k now while you're young so it can be established by the time you're a regular FT driver but otherwise it sounds like you're the man with the plan. [/QUOTE]
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