I am 43 how much money should I be putting in my 401k plan on a weekly basis?

Question

I would like to retire in about ten years and I presently have approximately $40,000.00 in my 401k plan

Answer 1

If you wish to retire in 10 years and you currently have $40,000 in your 401k, then there is only one acceptable answer. You have to put the maximum into your 401k that is allowed. Unless you are in bad health, which I am guessing you are not, your retirement nest egg will likely have to provide you a living for over 30 years, according to mortality tables.

Therefore, If you have: a paid-up mortgage, no consumer debt, a good long-term care insurance policy to protect your retirement assets in case of a long term care incident (useable by 44% of males and 72% of females over the age of 65), at a retirement income of over $4,000 monthly measured in TODAY'S dollars, (which won't buy as much in ten years, so you will need to adjust for inflation to approximately $5,400 in 10 years and increase 3-4% annually after that), you are going to need over $1.2 million.

If you wait untill 59 and a half to retire, you can come closer to reaching that amount AND not have to pay a penalty for any withdrawals from your 401k (or IRA if you roll it over when you leave your job).

good luck and hope this helps. Email me if you need more exact hypotheticals that include your particular financial info.

Answer 2

I believe as it is now most employers will let you put up to 50% of your paycheck into your 401(k) though they only match very little (most match only the first 5% and match that with a percentage so you might get between 1% and 5% from them). You'd have to put in the maximum to retire in 10 years (well actually that depends on how much you make per year also and how much you'll need to live on). Remeber however if you're thinking of using the 401(k) money for retirement you will have to wait until your 59.5 years old before starting to take out anything or you'll be hit by a penalty (you should check with your 401(k) rep on that being that you will retire at 53, though I think I'm right when I say you have to wait). You might consider holding of on retirement unless you're wealthy (remember you won't get social security for 10 years and won't have an income other than your investments)

Answer 3

This is such a no-brainer question, I can't believe these answers! Of course pay off the credit cards, especially the high interest ones! If you put money into the 401k, you are making an immediate 10% plus future interest......but that 30% credit card is killing you! My suggestion is to put everything you can into paying it off. Once paid, put everything you can into the 401k. Keep the 6% card for future use, that is a very decent rate. One more note...look carefully at what the 401k is investing in..if it's not diversified and hasn't been making a decent return I would look somewhere else for investing. A 10% match isn't worth getting crazy over.

Answer 4

Honestly, I think you need a reality check unless you are planning to move somewhere that I don't know about where you can live on a dollar a day.

Even if you own your home clear and outright, you are still going to pay property taxes, health insurance, and the rising cost of living i.e. consumer goods.

Even if you put 40k a year into your current investment it would still be questionable as to whether or not you could retire in 10 years (with 440k)

I do not believe you have estimated the cost of retiring until you die. I recommend you download the free MS Excel calculator at the URL below. Enter your age, current investment level, annual additions, ROI, and an inflation rate and it estimates your future spending power based on your input.
http://www.moneyandfreedom.org/resources-worksheetsanddownloads.html

Good luck,

Answer 5

Invest twice what you think you can afford. Remember to invest OUTSIDE your 401k as well. If you are thinking about retiring early now, you will yearn for it more as you get closer. You'll need after tax funds to bridge the years between retirement day and age 59.5. Remember especially to have fun with your money in the next 10 years.

Not advised, but some people retire on investment in the other economies... divorce & other legal settlements, inheritance, public assistance, crime...

Answer 6

In my ING Bright Spots newsletter, they showed a rule of thumb regarding how much you should have saved for retirement by certain ages (and it assumed retirement at 65, not 53 as you're planning). By age 45, you should have 4.1 times your income already saved for retirement. So if you make $100,000 per year, you should have $410,000 in retirement savings (and as I said, this assumes you'll work until age 65). According to the same chart, you should have 15 times your annual salary saved at 65.

Given these guidelines, I don't think it would be advisable for you to retire in only 10 years.

Answer 7

You won't be able to retire in ten years if that's the total savings for retirement that you have. Put as much as you can in, at least 10% but try for 20%. At your age (and I'm not picking on you, I'm almost exactly in the same situation, just slightly more money) you are "behind the power curve" for retirement.

Answer 8

I've got almost 10 times that in my retirement accounts, and I don't think I'll be able to retire in 10 years (I'm 41).

You need more than $1 million in your retirement accounts to retire comfortably.

Answer 9

If you assume that you could get 5% on a safe account after you retire, and you need $50000 a year to live on then you need $1,000,000. In 10 years you would have to save about $96000 per year--this would be very difficult for most people.

Answer 10

You are not going to retire in ten years.