I know a common theme on this subreddit is to max a 401k every year after things like emergency fund/high interest debt are taken care of; however, I was running some numbers and wanted some feedback.
I'm 22, and starting at my first job making $63,500 in August. They do an employer match of 100% up to 4.5% of my salary. So, to max the 401k I would need to contribute about 28% of my salary (only 23.5% out of my check due to the match). I used a 401k calculator to see what would happen if I went the rest of my life without raises contributing that amount, and the end result was being able to withdraw what equates to $84,000 accounting for inflation.
If I go down to contribute 13.5% of my check (for a total of 18% contribution), then I still end up being able to withdraw $54,000 annually, which is almost my salary now and I would not have a mortgage to contend with at that point in my life.
Given this, and the fact that over time I will probably be getting more than 3% raises (this is being conservative. In computer science with a degree from Georgia Tech), is it wise to not max my 401k from the start? I can financially handle that much money being taken out of my paycheck each month; however, I can get my student loans paid off faster and more aggressively save for a down payment on a house.
Thanks for any help!
Submitted March 17, 2017 at 08:41AM by finncethrowawayy99 http://ift.tt/2nMNyE5
