Monday, December 17, 2012

How much should I be putting in my 401K? ? Roth IRA News

I?m 26 years old and work a pretty low-paying job. I put 6% of my salary in my 401K to take advantage of the 50% match up to 6%. But in terms of real money, this amounts to a contribution of about $65 every two weeks, plus a $32ish match by my employer. I don?t know much about money and investing, and don?t know if I?m doing the right thing. My family is fairly wealthy, and I recently received a $5000 gift, which I have barely touched. My question is, should I try to increase my 401K contribution now that I can afford to? Or should I try to maintain the $5000 in my bank account as an emergency fund (I have no credit card debt). Should I leave my 6% contribution as is? Also, I?m hoping to buy my first house fairly soon (maybe within the next year). Would it even make sense for me to putting money away for when I turn 60, if I may need the money now? I watch a little of Suze Orman, and she recommends Roth IRAs over the 401K. Again, I?m no expert, and have very little advise to go on. I?m just wondering what I should be putting away? My current 401K balance is around $2300, so I obviously have ways to go.
Why is a Roth preferable to a 401K? (I?ve heard that before, but I don?t understand why.)
likepeps, I don?t think I?ll stop saving for retirement if I buy a house. My best friend is a realtor, and he?s been assuring me that he?ll be able to find me one where I won?t pay much more than I already pay in rent. Plus, again, I?m from a fairly well-off family, so the money I make from work isn?t my only income, anyway.
I am in a low tax bracket now, but when I retire, why would I be in a higher tax bracket? My income will (likely) be nothing by then, other than the money I withdrawl. So I would think I?d be in a lower or the same tax bracket. (Of course, tax laws could obviously change ? I get that.)

Source: http://rothira.solve-up.com/roth-ira/how-much-should-i-be-putting-in-my-401k/

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