I am a 31 year old living in a Florida with no spouse or dependents. I work for a healthcare company in a corporate office. I graduated in 2012 with about $100k in student loans with no knowledge of personal finance beyond “Don’t be in debt” and “Live below your means”. For the first 2.5 years after graduation, I worked for employers that did not provide such benefits.
I was hired by my current employer on October 1st, 2014. Per my company rules, I had to wait 3 months before I could participate in the 401(k). Therefore, I began participating in a 401(k) on January 1st, 2015. I figured this would be a good time to time a retrospective look with the financial markets being closed through New Year’s. Below is a table of the running total in my 401(k) by quarter.
| Date | Contributions | Company Match | Net Change | Total |
|---|---|---|---|---|
| 03/31/15 | $4,047.36 | $0.00 | $17.54 | $4,064.90 |
| 06/30/15 | $9,061.68 | $0.00 | -$60.84 | $9,000.84 |
| 09/30/15 | $13,043.76 | $0.00 | -$835.77 | $12,207.99 |
| 12/31/15 | $18,000.00 | $0.00 | -$557.76 | $17,442.24 |
| 03/31/16 | $22,722.82 | $1,076.52 | -$66.98 | $23,732.36 |
| 06/30/16 | $27,834.57 | $1,076.52 | $399.34 | $29,310.43 |
| 09/30/16 | $32,165.11 | $1,076.52 | $1,806.57 | $35,048.20 |
| 12/31/16 | $36,000.00 | $1,076.52 | $1,751.85 | $38,828.37 |
| 03/31/17 | $40,589.68 | $5,685.36 | $4,431.82 | $50,706.86 |
| 06/30/17 | $45,466.46 | $5,685.36 | $6,935.52 | $58,087.34 |
| 09/30/17 | $49,574.72 | $5,715.97 | $9,886.44 | $65,177.13 |
| 12/31/17 | $54,000.00 | $5,715.97 | $12,612.58 | $72,328.55 |
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Read the 401(k) Enrollment Guide: This may also be called a “Summary Plan Description” and it describes the key features of your 401(k). Important information contained inside may include information about plan eligibility, how much and when your employer makes their matching contributions, the vesting schedule, and procedures and rules for making withdrawals. You don’t have to read it cover-to-cover but there may be many things in there that are relevant to you.
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Learn and ask questions: There is a vast swath of literature in personal finance and there are plenty of people who can give you answers to your questions.
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How you invest is important too: Asset allocation is unique to every individual with you balancing risk, goals and investment timeframe. I maximized my 401(k) in 2015 but I didn’t know about asset allocation and haphazardly chose funds. According to Vanguard, 88% the volatility you encounter and the returns you earn can be traced back to your asset allocation.
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Not all 401(k) are created equal: Some companies may limited asset classes, high expense ratios, lack any sort of employer-contribution or have poor vesting schedules. I am fortunate to work for a company that has wonderful selections including the magical option on the PF flowchart of a “mega backdoor Roth IRA”. If you have good opportunities with your 401(k), try your best to use them to your advantage.
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It’s been a good run, but it’s a marathon: An overwhelming majority of the gains in my 401(k) have occurred in 2017. However, the path to retirement is a marathon and that means building a financial plan that can weather the highs and lows.
Submitted December 30, 2017 at 10:54PM by theredditingronin http://ift.tt/2CsL5ao
