lundi 15 mai 2017

Does anybody contribute 15% to 401k AND ALSO max out IRA/Roth IRA?

A thread I created in recent time spoke of my attendance in Financial Peace University, a personal financial management class by Dave Ramsey.

I've made some good progress since then: I've cut my cc debt (which was all in a 0% APR account) by about $1k and if all goes as planned (and as of now it looks like my plan will work out exactly as I designed), this cc debt will be paid off by 6/30.

I have just recently upped my 401k contributions to 13% from 12%. I plan to ease myself into 15% so that I get a "feel" for each reduction in my takehome pay and budget accordingly.

With the elimination of that cc debt, I will now have a chunk of money at the end of each paycheck which I can now use in other ways. And after years of neglect due to lack of funds (which I didn't always manage properly), I will now realistically have enough leftover cash every month to max out my Roth IRA.

Should I do it? Has anybody done this?

Dave Ramsey's definition of 15% savings for retirement is:
1. Contribute an amount to your 401k equal to what your company matches
2. Above the match amount, fund a Roth IRA
3. Complete 15% of contribution by going back to the 401k or another company plan (if available).

That doesn't sound too bad, but what about simply doing both? I would imagine that especially for workers whose salaries are not that high, an aggressive retirement investment effort of 15% in a 401k PLUS maxing out a Roth IRA ($5.5k for those under 50 as of 2017) would be even better.

Thoughts, feedback?

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Does anybody contribute 15% to 401k AND ALSO max out IRA/Roth IRA?

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