Wat to do --- Wife 401k

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jamesbrown
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Wat to do --- Wife 401k

Postby jamesbrown » Fri Nov 23, 2012 11:52 am

My wife gets a 3% match on her 401k at work and I told her to put in 10% of her check into her 401k. I ask her to put in 10% because I work for the state and I'm required to put in that much. Is it right for her to put in that much? Can she just put into 3%?

Thanks for your advise.

James

Justus
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Re: Wat to do --- Wife 401k

Postby Justus » Fri Nov 23, 2012 1:38 pm

You should get clarification exactly how the match works in order to take full advantage of the match. Some employers will match 100% of your contribution up to a certain percentage of your contribution (e.g. if you put in 3% they'll match 3%). Other employers will match 50% of your contributions up to a certain percentage (e.g. they'll contribute 3% if you contribute 6%).

jamesbrown
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Re: Wat to do --- Wife 401k

Postby jamesbrown » Fri Nov 23, 2012 8:12 pm

My wife company will only match up to 5%. Can she just do the 5% as well?

Thanks

Justus
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Re: Wat to do --- Wife 401k

Postby Justus » Sat Nov 24, 2012 1:31 am

jamesbrown wrote:My wife company will only match up to 5%. Can she just do the 5% as well?

Thanks


If your wife's employer will do a full match up to 5%, your wife can contribute 5% to max out the employer's contributions. If you both can save more money, people often say to then save in a Roth IRA, and then once that is maxed out, to continue to contribute to the 401k up to the legal maximum (17k this year).

peachy
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Re: Wat to do --- Wife 401k

Postby peachy » Sat Nov 24, 2012 7:54 am

She can put in whatever she wants. It would be smart to put in at least 5% if that's what they are matching. Just because you put in 10%, doesn't mean she has to, but if you can both put in 10%, and still meet your financial goals, go for it!

Does your company match your 10%, or do they match more than that?

I saw another post of yours where you mentioned funding a Roth IRA. Are you still doing that? You and your wife can each put $5000 after tax money into a Roth each year, if that's something you are considering as well.

jamesbrown
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Re: Wat to do --- Wife 401k

Postby jamesbrown » Sat Nov 24, 2012 9:57 am

My employer pays in 14% bi weekly. We haven't opened a Roth IRA account but we are hoping to start in january. My wife is okay putting in 10% but I just thought maybe it too much or she can just open a roth ira.

Thanks

DoingHomework
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Re: Wat to do --- Wife 401k

Postby DoingHomework » Sat Nov 24, 2012 1:32 pm

This entire question is very confusing.

First off, why would you TELL her to do anything? Is there some reason she can't think on her own and do what she thinks is appropriate?

And, what is the situation with you? You work for a state government and are required to put in 10%. Do they put in 14% on top of that for a total contribution of 24% of your income? Is it a 403(b), 401(k), 401(a) or some other type of plan? Do those contributions go to a separate account or is it a defined benefit plan? Is this the Ohio plan? If so, are you in the traditional plan or the alternative plan?

These things make a difference because your wife may be entitled to a benefit under your plan and that would impact the amount she actually needs to supplement for retirement.

Basically, the two of you should be making this decision based on your current and future needs considering what she already is entitled to. Once she determine's her needs then you (together) should look at the various alternatives (her 401(k), Roths, etc. to determine which is best.)

GoldbergFinancial
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Re: Wat to do --- Wife 401k

Postby GoldbergFinancial » Mon Nov 26, 2012 11:28 am

Agree with doinghomework. As an advisor and financial planner I see all the time if a husband and wife don't work together it doesn't work.

I also provide 401k advising and management services, general rule is this, put in just enough to get the FULL MATCH from your employer then open up an IRA. Investment options and fees are much lower in an IRA.

Jim Cramer and Suze Orman agree, both cited this in their books.

Follow my blog: http://financeinlife.blogspot.com/2012/ ... -time.html

stannius
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Re: Wat to do --- Wife 401k

Postby stannius » Wed Nov 28, 2012 3:51 pm

They are trying to work together and y'all are jumping all over him.

I too "tell my wife" how much to contribute. But it's not in the sense of ordering her around. Rather, it's in the sense of "I have run calculations based on what we have talked about in previous conversations, and to meet our goals, you should change your allocation to X%." Not that I use that many words. It doesn't mean she can't "think for herself" any more than her giving me a to-do list for my day off means I can't think for myself.


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