EDIT: Title should read 401k match. I was confused on terminology!
Relevant Information:
24 years old. $31,200 a year income. ~$13,000 in student debt. My necessary expenses are roughly $1000 a month (including the loan payments), so I'm very comfortable with the actual dollar amount I intend to invest in my 401k at this time. Currently, I'm planning to put 15% of pre-tax income ($180 every 2 weeks) into a 401k. The company plan starts July 1st.
Based on what I've been reading on this subreddit, typical matching seems to be around 50% company contribution for your 6% (so, an extra 3%). The maximum matching I'll receive is 1.5% total for my 6%, half of a typical match. That, and the amount is vested. I'm planning to seek new employment within the next year or two, so presuming I leave the company after 2 years of service (I started working for them this past August) I'll only have 20% of their match anyways.
Given the low amounts here, I'm not sure if I should put 6% of my income into American Funds through my employer to get the match, and look into putting the remaining 9% of my income into a separate account (Vanguard or USAA); OR put the whole 15% into American Funds and roll it over to another account when I move on from this company.
This also begs the question of what sort of 401k I want to pursue. Here are the main options I'm considering (through American Funds):
- Target Date Allocation - 2060 fund - 0.76% annual net expense ratio
- Target Risk Allocation - American Balance Fund Class A - 0.59% annual net expense ratio
- Equity - Investment Company of America - 0.59% annual net expense ratio
Should I proceed on getting an IRA through my employer, I'm currently leaning towards the American Balanced Fund. I have not yet looked into comparable options from Vanguard (I see this company mentioned often on this subreddit) or USAA (I have banking and insurance through them already).
I've gone through the sidebar for budgeting purposes and so on and that has been immense help, but I'm having trouble wrapping my head around retirement options. I'd greatly appreciate feedback into my current options and what direction I should take my future.
Please let me know if there's any further information I could or should provide here.
Submitted June 11, 2017 at 02:59PM by GoneWithLaw http://ift.tt/2rPBS8j
