Saturday, June 27, 2009

401K Contributions, 1997-2008

So this week I did not make too much progress on possible portfolio consolidation or asset allocation. However, I feel much better about the fact that my portfolio isn't exactly where I want it to be. One of my favorite PF bloggers, Get Rich Slowly, sounds like he is at the exact same stage that I am! It's a good reminder that personal finance is a process, and there's also something else to learn and do. There's never going to be a moment where I am "done."

Anyway, the other big factor that affects long-term performance besides asset allocation (in addition to time) is savings. I recently took a hard look at exactly how much I have been saving in my 401K over time. I've made a handy chart so I can share what I discovered:

I was a bit shocked that in the middle years the % gross salary contributed was not higher, as I even have a withholding for I filled out requested that 10% of my salary be withheld. The decline that begins around 2003 was due to my idea to buy an apartment; I thought I'd need the money for a downpayment (didn't happen). In 2007 I was in grad school and did not work much, so I didn't make any contributions. However, I did open a SEP-IRA for tax purposes and put in about $1,200.

Well, what's done is done. And, at least I did start contributing to my 401K almost as soon as I began working (only a one year delay). I'm planning to max out my contribution for this year, and I made good progress last year as well.

Onward and (hopefully) upward, both in terms of contributions and returns!

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