Tag Archives: Ashley Rosser
People always ask me “How Much Should I Contribute to My 401K?”, but many Americans are still not contributing anything to their company’s 401k plan. Of the employees who actually have access to a company sponsored retirement plan (only about 55% currently contribute) about 35% of these are still not contributing anything at all to their retirement. The grim reality is that for most, the only savings they will have at retirement will come from a company sponsored retirement plan. Those who do contribute are probably significantly underfunded. Many Americans have no idea how to even begin to project what current deferral rates they should be targeting.
So How Much Should I Contribute to My 401K?
A good rule of thumb for anyone to use is saving 10% of salary for 30 years. However, most employees are still living paycheck to paycheck, making 10% off the table, at least to get started. What should you do? I recommend to my clients to start off with ANY AMOUNT POSSIBLE to at least get themselves into the plan. Most people say if they never see it, they do not even miss it out of their check. If you are contributing to a tax deferred account (like a 401k, SIMPLE IRA or SEP) remember that your check is taxed AFTER your deferral so you will be missing less than the amount you are saving.
If your employer offers a match and you are not maximizing that, you are literally leaving money on the table that your employer is trying to give you for retirement. Once you start saving for retirement, the next goal is to defer just 1% more than the year before until you hit the 10% goal (or possibly more depending how close you are to retirement and how underfunded you are). 1% more each year can have a significant impact on your retirement balance at retirement.
An employee who earns $15 per hour during a 40 hour work week could save an additional $30,714 over 30 years by just increasing their deferral rate by 1% more each year. It is noteworthy that this 1% would amount to about $9.60 per bi-weekly pay going into their retirement account. That is just a few coffees or a pack of cigarettes!
Saving for retirement does not have to mean a huge change in habits, just a commitment to making small but powerful changes over time. We can offer you a complimentary full scope review to determine if you are currently underfunded for retirement. We will help you develop a plan to get back on track by using our retirement readiness program.
– Ashley Rosser AIF
Victory Fiduciary Consulting is proud to announce our President Ashley Rosser graduated from the Goldman Sachs 10,000 Small Business Program in April 2018. Designed to create jobs and grow the economy by bringing education, capital and support services to business owners throughout the United States, the Program is funded by a $500M grant from the Goldman Sachs Foundation. It was an honor for Ashley to be invited in the program, joining 21 other business owners from various backgrounds and industries. It is guided by an advisory council including Babson University, Goldman Sachs CEO Lloyd Blankfein, Bloomberg founder, CEO, and former New York City mayor Michael Bloomberg, and Berkshire Hathaway chairman and CEO Warren Buffett. The curriculum has been developed by Babson University and administered by the Community College of Philadelphia. Ashley has been working hard to implement the knowledge and experiences she gained during her time as a student. Stay tuned for exciting updates this coming year.