I dont HAVE to contribute but it is reccommended. How much is sensible?
2007-05-21 01:57:00 · 5 answers · asked by Magik_Angel 2 in Business & Finance ➔ Personal Finance
By the way, I earn £20k per year, am 24 years old, and do have some debts but only £5k.
Does this make a difference to what i should invest in my pension??
2007-05-21 02:08:06 · update #1
If the company matches 6%, you should contribute at least 6%. The 100% return on your money via the match isn't something you should pass up.
You shoul dput in more if you can afford it, I gurantee you won't regret the sacrafice of an extra fancy dinner every month when you are sipping on a drink on a cruise your extra 1% contribution paid for.
2007-05-21 02:14:30 · answer #1 · answered by Blicka 4 · 0⤊ 0⤋
It depends on how much you earn, how much the company matches, how old you are, when you want to retire, and how your investments do over that time. My employer matches up to 5%, and I went at least 10 years without taking advantage of that. It was stupid, and I regret it, because now I have to save much more than that to meet my retirement goals.
If you're young, and in your 20s, put away at least as much as the company matches. Spread it around a bit in a couple different sectors, and promise yourself you'll never touch it. Don't invest more than about 20% of all of it in the company stock, regardless of what they say about being a loyal employee. It'll take awhile, but one day you'll see that you earned more in a year from the stock market than you contributed, including the matching money. Then you'll hit the milestone where you earn more in the market than you did from your employer. It's a very gratifying feeling, I'm told - I haven't hit that 2nd one yet!
2007-05-21 09:04:38 · answer #2 · answered by Ralfcoder 7 · 0⤊ 0⤋
First read The Total Money Makeover by Ramsey- especially if you are carrying around any type of debt.
If you are out of debt you should put 15% into retirement. I suggest you max out a Roth IRA and then the rest into your company retirement. If your company has a match (they match up to 4% then put in at least 4% because you are doubling your contribution).
2007-05-21 09:02:48 · answer #3 · answered by mldjay 5 · 0⤊ 0⤋
Depends on the details. If it is like mine put in 5% for first 10 years, then 10% after that. But that might not work for yours. If you are young it might be a good idea to get a tidy sum in there so that compound interest can build up. As a rule of thumb I sat put in 10% of your salary starting now, I dont see how that could be wrong.
2007-05-21 09:03:50 · answer #4 · answered by pete the pirate 5 · 0⤊ 0⤋
Have to balance what you can afford with as much as you can. Try to contribute at least up until the company match if you can.
2007-05-21 08:59:28 · answer #5 · answered by Anonymous · 0⤊ 0⤋