Wednesday, September 10, 2008

On Starting My Nest Egg

As of today, I am eligible to take part in my company's Profit Sharing and 401(k) plans. At 22, I was certainly the youngest person the the small new-hire retirement meeting this afternoon, however I am very excited to start (slowly) contributing to my future! In the personal finance world, it is never too early to start young.

Profit Sharing Plan: 15% of gross income automatically invested per year

401(k): Traditional/Roth options, maximum company match of 3% if you invest 6%, all company-managed funds with average annual returns from 10-15% (though we all know that past performance is not indicative of future results) and no fees/expenses

Starting with my first paycheck in October, I will be contributing 6% of my income to the Roth 401(k) in order to receive the full match. I look forward to investing at a very low-point in the markets when everything is very cheap/"at the bottom", and seeing where it takes me over the next 1, 3, 5, 10 years. My portfolio will begin in 100% equities, though I have not yet figured out my allocation of that between the fund options.

I am young, healthy, debt-free and saving for retirement!

*Note that both plans have vesting periods of 6 years, however I hope/plan to stay with this company until at least then.


SavingDiva September 11, 2008 at 9:25 AM  

Congratulations! I wish that I would have started saving for retirement when I was your age!

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