When should you set up your 401K?

[Shep92]

I have been in the company for almost 1 year now. I'm 22 and I really don't see myself going anywhere else in my life if I can have a secure financial career at UPS. My question is when should I start my 401K along with healthcare and pension? I have tried to read the contract several times but it is just too confusing for me. I hope to get some good advice. Thanks!

 

[UpstateNYUPSer(Ret)]

Now.


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[Shep92]

How do I go about setting it up and choosing the best option for me?

 

[IVE GOTTA PACKAGE 4U]

How do I go about setting it up and choosing the best option for me?/quote]
Go online and educate yourself. In the meantime start off with a target date fund,until you learn how you want to invest. Save as much as you can afford!....Goodluck!

 

[UpstateNYUPSer(Ret)]

How do I go about setting it up and choosing the best option for me?

Go to www.retirement.prudential.com and set up your account. I suggest that you choose the Roth 401k and the Bright Horizon Fund closest to your retirement year and start with a fairly low contribution percentage (up to 5%). When you get a pay raise increase your % by the amount of the raise. You will be amazed at how quickly your balance will increase.

 

[Shep92]

What about pension and healthcare?

 

[satellitedriver]

What about pension and healthcare?

You get both for free, just by being employed.
First open a Roth IRA and max it out, then contribute to your 401k.
At your young age, my advice would be to invest in a Vanguard total market index fund in your Roth IRA, then invest in the S&P fund in the 401k.
Time is your best friend.
Dollar cost averaging into the market will make you a wealthy person, over time.

Best of Luck,
Steve

 

[HEFFERNAN]

One thing that doesn't get brought up often enough is live below your means and stay out of debt.

I like Upstate's advice in using your raises as checkpoints in raising your contributions by 1% at a time and also Satellite's advice in starting with the Roth account ( no tax advantage now but your money grows tax-free) which at your age could make you a millionaire if you start now.

Being that you are 22 and thinking of this right now makes you a very smart guy already.

 

[Jones]

You get both for free, just by being employed.
First open a Roth IRA and max it out, then contribute to your 401k.
At your young age, my advice would be to invest in a Vanguard total market index fund in your Roth IRA, then invest in the S&P fund in the 401k.
Time is your best friend.
Dollar cost averaging into the market will make you a wealthy person, over time.

Best of Luck,
Steve

Only thing I would do different is max the 401k Roth before opening the IRA, reason being that fees in the 401k are lower than what you'll be able to get on a Roth IRA. Investment choices are spot on.

 

[UpstateNYUPSer(Ret)]

I agree w/Heff that I am very impressed that a 22 year old is thinking about his future .


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[IVE GOTTA PACKAGE 4U]

Only thing I would do different is max the 401k Roth before opening the IRA, reason being that fees in the 401k are lower than what you'll be able to get on a Roth IRA. Investment choices are spot on.

You can also put alot more money In a roth 401k $17,500. Roth IRA $5500 limit unless, you are over age 50

 

[purplesky]

I have been in the company for almost 1 year now. I'm 22 and I really don't see myself going anywhere else in my life if I can have a secure financial career at UPS. My question is when should I start my 401K along with healthcare and pension? I have tried to read the contract several times but it is just too confusing for me. I hope to get some good advice. Thanks!

Do the 401k Roth asap and contribute as much as you can afford. Split contribution allocations 3 ways with the sp500,sp400,russel 2000. All INDEX FUNDS. Thats large cap and mid cap and small cap.

Another great option and really better is opening a Roth IRA with Fidelity. You can save 5,500 a year into a Roth.

You have total freedom with a Fidelity Roth to buy stocks or ETFS or whatever inside a Fidelity Roth.
Once you have a $2500 balance you can buy and sell Fidelity ETFs and ishares ETFs for free.

You can also easily transfer funds from your bank to Fidelity to make Roth contributions.

Check it out. Its easy!

 

[UpstateNYUPSer(Ret)]

I believe Prudential also offers a Roth IRA through our 401k.


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[Shep92]

Times change very quick. That's something I learned after high school. Living below my means is a standard I want to live by in my future. Never use your finances on something you can't afford or can live without. Right now I see UPS as a good career option because of benefits and more job opportunities as I gain seniority. There are some things that scare me about this decision (such as contract negociations/ the economy, etc.), but there are people who have made a career with the company and still are. Right now I just want a stable financial future for myself and whenever I decide to have a family.

 

[Brownslave688]

Do the 401k Roth asap and contribute as much as you can afford. Split contribution allocations 3 ways with the sp500,sp400,russel 2000. All INDEX FUNDS. Thats large cap and mid cap and small cap.

Another great option and really better is opening a Roth IRA with Fidelity. You can save 5,500 a year into a Roth.

You have total freedom with a Fidelity Roth to buy stocks or ETFS or whatever inside a Fidelity Roth.
Once you have a $2500 balance you can buy and sell Fidelity ETFs and ishares ETFs for free.

You can also easily transfer funds from your bank to Fidelity to make Roth contributions.

Check it out. Its easy!

Love my fidelity Roth IRA. Unfourunatly this year was the last year we will be eligible for contributions to it.

Oh well it's kind of like my play money account. I buy and sell a lot inside of it. 100% in FB right now.

 

[upschuck]

Love my fidelity Roth IRA. Unfourunatly this year was the last year we will be eligible for contributions to it.

New law or personal choice?

 

[Jackburton]

New law or personal choice?

Might be over the Roth income cap with married filing jointly. Nice thing about the ROTH 401k, there is no such thing.

 

[UpstateNYUPSer(Ret)]

New law or personal choice?

Might be over the Roth income cap with married filing jointly. Nice thing about the ROTH 401k, there is no such thing.

His wife will be starting a new job which will put them way over the upper income limit.

 

[IVE GOTTA PACKAGE 4U]

If a married couples is over 191k,then you can not contribute to a Roth Ira.

 

[Brownslave688]

His wife will be starting a new job which will put them way over the upper income limit.

Yeah we call these first world problems. It's our way if putting things in perspective. Everyone thinks their problems are terrible but most are minor compared to others.

On a side note if I end up quitting I guess we could contribute for a few more years.