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UPS Retirement Topics
Just started my 401k, thoughts?
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<blockquote data-quote="brett636" data-source="post: 1218676" data-attributes="member: 249"><p>Congratulations on starting your 401k. Unlike your pension this is an asset that can be passed onto your heirs, and is something you control versus relying on a retirement controlled by a committee that may or may not have your best interests at heart. A Couple of things though, your investments are certainly aggressive and should be given your age. Don't let big market swings get to you causing you to move money out of one investment in order to place it in a "safer" investment. When a downturn occurs, and you lose some value moving that money only locks in that loss, and keeping it in place means you stand to regain the lost value and then some. Just keep in mind this isn't money you will need for a very longtime, so losses that occur aren't the end of the world. In fact these funds are divided up among hundreds, if not thousands of companies so its not like if one company goes bankrupt you lose your retirement nest egg. If it drops in value its a systemic issue that needs to work itself out rather than a single company or industry issue. The 3% contribution sounds like a safe bet allowing you to adjust to a smaller paycheck while giving you something to look forward too come retirement, but I would suggest you increase that by atleast 1% at every raise interval. This will allow you increase your contributions without seriously impacting your take home pay. Also may I suggest you look into the Roth 401k rather than the pre-tax. You and I are on the same boat as we are nearly the same age, and chances are when we retire income tax rates will be significantly higher than they are today. You may be paying taxes on that money going into your 401k, but it grows tax free and is withdrawn tax free which can mean a bigger return later on versus waiting to pay the tax later on both the contributions and the growth. </p><p></p><p>Again, congratulations on taking control of your own retirement and remember that atleast half of your teamster brothers and sisters are not making the most of their generous income today to save for tomorrow putting you well ahead of them. Encourage them to do the same, and don't stop contributing to that 401k until that last day you walk out of your building a retiree!</p></blockquote><p></p>
[QUOTE="brett636, post: 1218676, member: 249"] Congratulations on starting your 401k. Unlike your pension this is an asset that can be passed onto your heirs, and is something you control versus relying on a retirement controlled by a committee that may or may not have your best interests at heart. A Couple of things though, your investments are certainly aggressive and should be given your age. Don't let big market swings get to you causing you to move money out of one investment in order to place it in a "safer" investment. When a downturn occurs, and you lose some value moving that money only locks in that loss, and keeping it in place means you stand to regain the lost value and then some. Just keep in mind this isn't money you will need for a very longtime, so losses that occur aren't the end of the world. In fact these funds are divided up among hundreds, if not thousands of companies so its not like if one company goes bankrupt you lose your retirement nest egg. If it drops in value its a systemic issue that needs to work itself out rather than a single company or industry issue. The 3% contribution sounds like a safe bet allowing you to adjust to a smaller paycheck while giving you something to look forward too come retirement, but I would suggest you increase that by atleast 1% at every raise interval. This will allow you increase your contributions without seriously impacting your take home pay. Also may I suggest you look into the Roth 401k rather than the pre-tax. You and I are on the same boat as we are nearly the same age, and chances are when we retire income tax rates will be significantly higher than they are today. You may be paying taxes on that money going into your 401k, but it grows tax free and is withdrawn tax free which can mean a bigger return later on versus waiting to pay the tax later on both the contributions and the growth. Again, congratulations on taking control of your own retirement and remember that atleast half of your teamster brothers and sisters are not making the most of their generous income today to save for tomorrow putting you well ahead of them. Encourage them to do the same, and don't stop contributing to that 401k until that last day you walk out of your building a retiree! [/QUOTE]
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Just started my 401k, thoughts?
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