Maximizing my 401K

It has been a lot of work and a long time coming but at my companies open election period every 6 months I have been increasing the amount deducted from my paycheck for my 401k. I am now 28 years old and have been contributing to my 401k since I was 21 and I regret not doing this when I first was able to contribute to my retirement account.

Although back then maximizing would have made it impossible to live, however, had I put at least the full amount my employer matched it would have been better than the measly 2% I started out with.

On July 1, 2010 I will make the final step from my current 10% to the maximum allowed which is 15%. This is a large jump and will reduce my take home pay by quite a bit, however, I have spent the past 12 months reducing my frivolous spending, adhering to a simple budget, and learning to live on less.

Looking back last year was the first year I began maximizing my Roth IRA, but if I could do it all over again beginning say at 25, when I started to make enough money to live on and contribute to retirement, I would have maximized my 401k first because of the huge tax advantages of reducing my adjusted gross income with pretax withdrawals as well as my companies matching. Although I regret not doing this earlier, live and learn and pass it on, I feel it is better late than never. I know lots of people who have 10 years on me who haven't yet maximized their retirement savings. My recommendation for everyone working is to take care of yourself first by paying yourself first. It can automatically happen with a 401k provided from your employer so why not invest the most towards a happy and perhaps wealthy retirement.

I have mentioned this tool before in previous posts however I will recommend it again as it is quite accurate as predicting payroll adjustments and how they affect take home pay.

How Will Payroll Adjustments Affect my Take Home Pay

Betting on the Bad Guys

Here is an article I read that was posted earlier this month I figure I would share. To me it makes a good bit of sense and provides a bit of humor as you read. It is really nothing more than food for thought, but it makes a great point of considering the companies you hate the most as good investments.

Always Bet on the Bad Guys.

The creator of Dilbert easily has me convinced and checking on how much I could have made had I invested in a few of the companies I hate back when I began to hate them. The hatred doesn't have to be blind hate, it could be jealousy of the addiction to their products or success with limited ethics or morals. Either way investing in companies you like is apparently riskier statistically according to this article than investing in companies you have no strong emotional tie. Think about it.

Increasing my Financial Knowledge with Personal Fincance Books

Here is a simple list of books I have read in order to guide my thought process on investing, retirement, and personal finances:

Grow Your Money!: 101 Easy Tips to Plan, Save, and Invest

The Ultimate Dividend Playbook: Income, Insight and Independence for Today's Investor

Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money--That the Poor and the Middle Class Do Not!

The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich

The Bogleheads' Guide to Investing

The Five Rules for Successful Stock Investing: Morningstar's Guide to Building Wealth and Winning in the Market

The Complete Personal Finance Handbook: A Step-by-Step Instructions to Take Control of Your Financial Future

Your Money Ratios: 8 Simple Tools for Financial Security


The list will continue to grow as I seek personal education and knowledge to help me take charge of my financial future.