Finances & Money Investing

Just doubled my 401(k) contributions

As a quick note, I realized that I’ve only been contributing 5% of my income to my 401(k). That’s the minimum I need to get a full company match, but I can still legally contribute much more.

While I’m hesitant to max out my 401k when we still have so much debt, I decided to bump up contributions to 10% of my income. Most financial advisors say to automatically save 10% and invest 10% each month. While we’re not saving, at least I’m not investing 10%.

Now I just need to make the change with Stacie’s contributions…

And if you’re wondering, I’m bumping up contributions because it’s a buyer’s market in stocks right now. Sure, I thought the bottom was 1,500 points ago, but looking at the big picture, we’re almost 5,000 points off the market’s high of just a year ago. We could continue to slide, slide, slide, but I have 30-35 more years to recoup those losses.

But if you’re in your 50s or 60s, I don’t advise contributing more to your investments, but that’s all I’ll say. Talk to a certified financial planner (not me) to find out what you should do. Who knows, your holdings might not be too risky (i.e. you might already be strong in bonds, etc. and weren’t hit hard). Your investment strategy really depends on your age, portfolio/holdings, and risk profile. You need a one-on-one with a knowledgeable person to analyze all those and decide the next steps.

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Clever Dude


  • Good for you! I just increased my percentage as well. I went from 6% (the company match) to 10%, hoping to take advantage of the low prices. You’re right, in 30 years when this money is needed, the price is going to be the same regardless, so I figure I might as well take advantage of the lower prices.

  • About time i read about people taking advantage of the market! GOOD F’ing work my friend 😉 10% is a perfect number, esp. considering you get a nice match of 5%.

    I hope everyone else reading this pumps ups there’s as well!

  • YOu may want to make sure most of your contributions are going to a fixed type account. My advice is to use an investment company where you can research and pick your own funds. I think you’ll be just as successful as these supposed advisors.

  • I’ve always been maxing out my accounts, but because I am older (49) I keep over 40% in secure investments. Now it’s likely no longer 40% but more like 50%. At the moment I am afraid to look at my 401K, but I am thinking of moving a bit more from stable income into stocks just to buy more of them cheap. Will see.

    One thing that worries me is that new investors may be scared for a while.

  • I always heard it was foolish to contribute more than your company would match to a 401k. Wouldn’t you be better off contributing the extra 5% to an IRA where you might get a better rate of return and could access your monies without the tax debt at some point, perhaps before you retire?

  • @klein335, I don’t think anyone would guarantee my own picks in an IRA are any better (or worse) than those of a 401k manager. Plus, my 401k contributions are still pretax, thus saving me tax money this year.

  • CleverDude,

    I don’t think that klein334 is implying that your picks would be better than a 401K manager, what he is saying is to use the recommended strategy of first invest up to your 401K match, then work on maxing out your Roth IRA, and after you have done that increase your 401K up to the IRS maximum, and any additional savings beyond those you could put into a regular taxable account.

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