This is a question I have been asked by a lot of friends my age. Should I be investing in my 401K? How much should I be investing? Here is the 401k explained. I am not going to give you a dollar amount as to what you should be investing because it is different for every single person. If you are under 50 your maximum annual contribution to your 401k is $18,000. This money is tax free and does not count as taxable income. If you contribute $18,000 to a 401k, your year-end tax statement will reflect $18,000 less in earned taxable income. This is a way to avoid paying more state or federal income tax. When you are over 50 you can contribute up to $24,000 annually to a 401k. Now for most, these are out of reach. $18,000 is about a third of your paycheck if you are lucky. If your company offers a company match in a 401k, contribute the maximum that they will match otherwise you are throwing away free money. 33% of people do not maximize company 401k match programs. They are throwing away free money. You are also allowed to contribute to a Roth IRA. With a 401k you pay taxes when withdrawing and with a Roth IRA you pay taxes going in. You need to be 59 ½ to draw from either one without penalty. Your total contribution between a Roth IRA and a 401k is $23,500 or $28,500 if you are over 50. The 75/20/5 rule is spend 75% of your money, save 20% and give 5% away. The 50/50 rule is save 50% and spend 50%. The most important thing when it comes to a 401k is you should not be contributing money that you will need in the future. If you draw early you pay taxes and hefty penalties. A 401k will significantly grow overtime with compounding interest. That is why it is important to start early. You want to have a 6 month nest egg before you consider investing money in a 401k or other investment vehicle. I hope this video on the 401k explained helps you better plan for retirement! I will be doing other videos on the 401k explained in the future, so watch out for those! 401K Explained | What is a 401K https://www.youtube.com/watch?v=TV_30ttpIsw Website http://www.ryanoscribner.com Follow me on Twitter! https://twitter.com/RyanOScribner Personal Fitness Coaching http://www.ryanoscribner.com/shop If this video brought value to you, please leave a like! If you are looking to find out more about anything I discussed, drop me a comment or contact me on Twitter. Subscribe to be updated on my journey through life! About Me: My name is Ryan Scribner. I am a nutrition and fitness crusader and I consider myself to be a life student of personal development. I am also an investor. I went from being an overweight college student to living at 8% body fat. About two years ago when I started weight lifting, I was completely clueless. I never played sports in high school and I had no base level of fitness established. I made many mistakes, but over time I developed an understanding. I want to help others develop the body, spirit and mind they deserve. In making mistakes along the way and learning from scratch, I have a lot of value to bring to the table. I recommend my content to those interested in the accumulation of wealth, fitness and nutrition as well as personal growth and development. Recently, I made my own happiness a priority after living with depression for over a year. I want to share with you exactly what I did to get to a state of perpetual lasting happiness. I have also spent a great deal of time learning about investment and wealth accumulation. While money alone doesn't bring happiness, it allows you to experience many things which do bring happiness. Start the journey. Involve the right mentors and coaches. Learn.
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I'm on pace for retirement at 45 (and that's projecting the Mrs to make less than she probably will a year). A lot of other people who are into early retirement actually save enough money so that they get to the point where they don't have to work (technically retiring but most go part time, do multiple projects they really enjoy instead or just straight up retire.)
I've only seen a few of your videos so if you've addressed this already don't worry about it, but it seems like something you might be interested in eventually.