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How much should I contribute to my 401K?

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I am 26. I work full time and I m a student. I am single. I claim only 1. My salary is 40,000 and I need guidance on how much I should contribute to my 401k each pay check. Right now $100 is being contributed each pay and I have $100 going into my savings each pay. I pay my bills on time as well. But any advice regarding 401k? Thanks.
Update: My employer puts in 12.50%

How much do I contribute if so? Can u tell me the dollar amount.
Update 2: And yes it is a Roth account

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asked Jul 30, 2017 in Business and Finance by Egs

3 Answers

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If that 12.5% from the company is a match, then I would do everything I could to contribute 12.5%. Where else can you instantly double your money with no risk?

If the 12.5% is unconditional, then my guideline is to contribute at least 10% of my gross to long-term savings. At your present salary, that would be about $340 a month, or $85 a week. It could be much more, if you are able. For my first year of working, due to low living expenses, I was saving 50%.
answered Jul 30, 2017 by roderick
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If you're already meeting your expenses (rent, food, loans, car, etc.) you should pretty much be putting as much as you legally can into your 401k. Remember, this is money that's going to be left alone and accumulating interest for the next 35-40 years. The more you can put in earlier, the larger your nest egg will be when you reach retirement.
answered Jul 30, 2017 by PoohBearPenguin
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In general, your goal should be to put as much into your 401K as is legally allowed. Knowing that can be hard when you are starting out, you should at least put in enough to get any matching funds your employer provides.
answered Jul 30, 2017 by DON W

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