If you can afford it then yeah, 6% is the minimum you should budget because you’re getting free money. You should try to max it (22k) pre tax for the year, u will thank urself at 55

I’d advise only putting in what your employer matches and maybe 2% more, for a total of 8%. 401k easily slip into the red / negative for growth and you don’t want too much of your own money subject to this. Diversify your investments, try to stay around 5-8% exposure in any account / stock. Have had a 401k for 6 years and it’s in the negative by thousands of dollars, most of which is offset by my employer’s contribution. Tax benefit is great but don’t put all your eggs in one basket; check out a Roth IRA. Just my two cents.

how’d it get to negatives

Market has been rough for a few years for 401k. Pandemic and ESG initiatives, to name a couple suspicious factors. Mine is managed by Fidelity. It isn’t always supposed to be like this but since Biden has been in office, mine has been negative. I recall in 2008, a few coworkers nearing retirement had to keep working because of the housing/market crash; they invested heavily into 401k. Made me skeptical of doing more than what employer matches. If the majority of your retirement is in your 401k and the market tanks, can be very problematic.

ahhhh good to know. shit like this makes me not want to max it out every year.

Ignore that post completely

You’re a doctor you will have cash to do whatever you want with. 22k pre tax is nothing. U should max it

When you retire you will be diversified enough to ride the waves

In your 401k you can choose where the money gets invested into, even with a company match. Just takes a phone call to fidelity. If you’re in default company plan you are probably paying 1% + managing fee as well

With that said there is no way your retirement account should be negative if you have been contributing for the last 6 years. S&P currently over 4000 and 6 years ago it was knocking at the 3000 door.

Something is very wrong with how yours is setup

Roth IRA is just another investment vehicle with tax benefits like 401k, the specific investments can be the exact same even if the name of the account is different

Yeah, if you're a high earner, you're not going to be in any situation where suddenly retirement is upon you and you have no choice but to draw down at a poor time. Nor is it likely you will ever be in a situation where you have to draw down on your 401K early in life.

Its primary value aside from employers matching is that you're getting a tax deferral, tax advantaged accounts are pretty rare with minimal contribution room, take as much advantage as you can in life.

Our RRSP equivalent is up to 31K per year now maximum as long as you earn 171K or more (18% of previous years income). Our Government is a joke when it comes to tax advantaged accounts, it has not at all been increased at the rate of CPI / Inflation our contribution room should be significantly higher, but if were being honest that's only going to help people who are already well off since the vast majority of Canadians have not used all their open contribution room nor their TFSA room (Roth IRA equivalent here in Canada).

This post was edited by SBD on Oct 31 2023 08:03am

annual 4% after 18 months of employment confirmed

To your bank account or to your 401k?