I'm thinking of maxing out my new 401K (company is matching at 25%) but my spouse (who has a 401k from previous employment but does not put anymore money in it) thinks that it is not a good idea to put any money in my 401K, and would prefer that I save this money for a down payment (1st time buyers). I am 30 yrs old and I don't have any money saved for retirement yet. Any advice?
2007-02-23 16:48:35 · 6 answers · asked by Agnes b. 1 in Business & Finance ➔ Investing
Already some really good information, than you all! Additionally, how do I contribute enough to get the full company match if the company matches 25% of my contribution up to the IRS maximum (which is $15,500 in 2007)?
2007-02-24 10:33:54 · update #1
Rather than maxing out your 401(k), just contribute enough to maximize the match. You take advantage of the free money, and still have some money to save.
2007-02-23 17:42:31 · answer #1 · answered by Rob D 5 · 0⤊ 1⤋
Saving for retirement would be better. Make sure you contribute enough to get the full company match. There are many programs where you can by a house with a small down payment. You can finance a house, but you can not finance your retirement. You need to start saving right away so you can take advantage of compound interest and dividends. The longer you wait the less money you will have at retirement.
2007-02-23 16:59:34 · answer #2 · answered by anonymous 1 · 1⤊ 0⤋
put money into your retirement and look to get a loan with minimal down payment. The less you put in yourself the more leveraged you become. But that just means the profits on the home are all using borrowed money.
The interest rate on a home loan is suffeciently low enough that your money is far better served earning the market rate rather than lowering the interest you pay. And, you'll likely not be in that home for more than 7 years anyway. So by saving for a home instead of your retirment you're sacrificing long term compounding of interest for short term gain. Not good financial plannign in my opinion. Especially since you can get into a home with zero down in most parts of the country.
2007-02-25 06:46:51 · answer #3 · answered by digdowndeepnseattle 6 · 0⤊ 0⤋
I believe she is right. If you dont have anything saved for your retirement, then save your 401k for retirement and set up an additional account that you can have a certain amount of money come out of every pay and use that as a down payment or talk to your bank and see how much it would cost for a cd. they roll over every 6 months or whatever the bank goes by for the policy and also that would give you enough time to search for the perfect home, perfect mortgage, have enough money to put down that you wouldnt get turned down and also more time on the job, makes mortgage companies jump for lower rates for you.
2007-02-23 17:00:18 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Split the difference and do both. I am a firm believer in saving for your retirement after seeing what my parents have been through with very little saved up for their retirement. I also like the idea of being a home owner.
It is a good idea for both spouses to prepare for their financial future. With the divorce rate being what it is, it is not a bad idea for each of you to have something in your own name.
That being said, I wish you a long and happy marriage.
2007-02-23 17:05:40 · answer #5 · answered by BD in NM 6 · 0⤊ 0⤋
Match what they will match up to and hope for the best
2007-03-03 16:42:33 · answer #6 · answered by triple6thugn187 1 · 0⤊ 0⤋