March 11, 2010
How do I figure out what to take out for 401(k) to keep within budget for expected net salary?
Will-O asked:
I budget based on net income (twice a month or semi-monthly paycheck) and I want to calculate how much to take out for 401(k), so that I can use the tax advantages of a 401(k) retirement plan. I want to balance it in such a way that I come as near as possible to what I already get - net. Any tools out there I can use or a method to calculate what I want? Thank you.
Bree
I budget based on net income (twice a month or semi-monthly paycheck) and I want to calculate how much to take out for 401(k), so that I can use the tax advantages of a 401(k) retirement plan. I want to balance it in such a way that I come as near as possible to what I already get - net. Any tools out there I can use or a method to calculate what I want? Thank you.
Bree
Comments on How do I figure out what to take out for 401(k) to keep within budget for expected net salary?
Jose
I understand your question, but there is not enough info in your explanation. Whatever you take out for 401k is going to reduce your net pay directly. But whatever your tax bracket is, is how much tax it will save you per dollar. Are you expecting a raise or starting a new job? I always calculate my estimated net by multiplying my salary by 75% to give me an expected take home pay, but this could vary depending on your tax bracket and # of exemptions.
Ezekiel
Fidelity have a 401(k) contribution calculator that will help you do just that:
If you are under 40, though, you should contribute twice what you think you can afford, and figure out a way to manage. Do this for two or three years, and those contributions (which will have the longest to ‘compound’) will end up forming the bulk of your retirement. You won’t be sorry you did it when you get there!
Jada
Check out Paycheck City… The website provides free calculators for paycheck information, bonuses, gross pay, W-4 forms, 401(K) plans, stock options, and more. The website is listed below…
Brennan
If your employer offers a match on your contribution, the minimum you put into your 401k should be whatever their maximum match will be. Otherwise, you’re leaving “free” money on the table.
After that, adjust your budget accordingly.