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? About % Of Income To Contribute

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Hi. I'm new to the board. I have had a 403b through my school district for a few years. I just turned 30 years old and am investing very little right now (only $100/month). i want to increase it but I'm not sure what % of my salary is typical. Other things to factor in...I'm getting married in August and will be pruchasing a home within the next year or two, so I want to make it adequate but not so much to put me in the poorhouse with all of these expensive events coming up. Any advice would be great! Thanks!

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Hi,

Welcome to 403bwise. I don't think anyone can give you a definte %. That should be up to you and your mate to decide. One thing, you can start off high, and then change if you find it is not working for you. I have move up and down the amount I contribute several times over the years. Of course, it would have been better for me if I would have never lowered the amount, but stuff happens.

 

One of the best features of the 403b is that the money is taken out before you get your paycheck. What you don't see, you don't spend. One thing I would suggest is that when you get a raise, but an extra amount into your 403b. That way, your 403b gets a raise, and you get a raise. Every extra dollar you can get in your 403b will not be regreted when you retire. Best Wishes.

 

Joe

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I would also suggest that you be very careful about the company you invest with. Beware of front end loads, back end loads, 12b-1 fees, and high expense ratios. If you do not know what these terms mean, find out! Many on this board regret their first experiences with investing. If you educate yourself properly, you can avoid the mistakes that we made.

 

As an example of a typical mistake, consider the boneheaded move I made when I invested in my first "TSA." It was a fixed income investment that has an annuity value and a surrender value. I can NEVER shift this money elsewhere without paying a huge "surrender fee" (which is over 10K at this point). It was an extremely inappropriate investment for me, so I paid the price.

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Guest Sierra

apt: If you feel it was inappropriate for you why not make a formal complaint to the State Dept. of Insurance. You just might be made whole.

 

Peace and hope,

Joel L. Frank

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apt: If you feel it was inappropriate for you why not make a formal complaint to the State Dept. of Insurance. You just might be made whole.

 

Peace and hope,

Joel L. Frank

 

Joel,

 

I have mixed feelings about doing this. On the one hand, I think that the agent did a very poor job of "advising" me. For instance, he provided no information at all about basic things such as risk, diversification, and performance of various asset classes over time. Nor did he ever explain how he was compensated. I can't tell you how angry I get when I think about this.

 

On the other hand, I do feel responsible for making that investment decision. Nobody put a gun to my head. I was simply ignorant, and I have no one to blame for that but myself.

 

But thank you for that suggestion. I will mull it over.

 

 

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Early investing charts always blow away any waiting ideas I ever had about investing..So here is my brief history on how much to invest...Having a long history of church exposure I came to 10% as an amount to tithe to the God in Me. But that was too much because of the cost of debauchery in the early 70s, so I had to go to 5%..as a minimum in my mind, and until I entered a relationship. Two savers can plan for property purchases, college, retirement, et al, as long as we agree on reasonable spending, and don't get too manic about saving or money..it needs to be regular and a joint effort..with respect and money for vacations/some toys, etc.

 

It seemed to take forever for my savings to grow, until they reached about $30,00 and then somehow, asymtotically (?) the pot just grew on it's own, too...So it was helping me too, in some nice way...The point is to get started and between income tax refunds, bonuses, raises..if half goes to long term and the other half to "now", that seems fair enough...Have fun, Dan, and don't be afraid to "max" once in a while...

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