To keep things somewhat simple, I've been hired to a new job that offers a 401(k) plan with contribution matching up to 5% (100% of the first 3% and 50% of the following 2%). I was initially going to contribute 12% but is it even worth it? Should I be contributing more than 5%?

More details;- I'm 21- I have two jobs. This is offered by my second job. I can get by on J1 perfectly fine. Income from J2 is intended for savings/investments.- I have a Roth IRA that I am working towards maxing this year- I'll be eligible for J1 401(k) in July

I feel like the answer is match 5% and then how ever much more money I'm comfortable with not expending, put into Roth/Investments/Savings. But I'm not sure. Any input/advice to me is greatly appreciated. I want to expand my knowledge on money as much as possible. If you need anymore details feel free to ask. Thanks :)

edit: I haven't read the prime directive yet. Still just getting into using reddit so apologies for the negligence lol. Going to read it now. But still, any and all feedback/advice is appreciated. Thanks to everyone for pointing me the way

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AutoModerator t1_j6llbfr wrote on January 31, 2023 at 4:37 AM

#1,645,408

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Werewolfdad t1_j6llgyw wrote on January 31, 2023 at 4:38 AM

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Start here: https://www.reddit.com/r/personalfinance/wiki/commontopics

nkyguy1988 t1_j6lli0c wrote on January 31, 2023 at 4:39 AM

#1,645,481

You should start with the prime directive in the wiki or auto linked below.

AutoModerator t1_j6lli1b wrote on January 31, 2023 at 4:39 AM

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Replying to nkyguy1988 (#1,645,481)

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millerlit t1_j6llmvu wrote on January 31, 2023 at 4:40 AM

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Invest up to match in 401k first. Free money from the match. Then max out IRA. IRA will have more things you can invest in and probably lower fees.

yhauls OP t1_j6llrbm wrote on January 31, 2023 at 4:41 AM

#1,645,566

Replying to Werewolfdad (#1,645,469)

Ah thank you!

YouFknDummy t1_j6lm63y wrote on January 31, 2023 at 4:45 AM

#1,645,690

Max out. Invest. Market could possibly be low right now and you'll be buying shares at good prices, giving you huge upside in the future.

...or the market could continue an overall downward trend for decades like Japan. No one knows

I'd still take my chances with maxing out and investing.

yhauls OP t1_j6lmc1e wrote on January 31, 2023 at 4:46 AM

#1,645,742

Replying to millerlit (#1,645,532)

Yeah I figured this was the way. Appreciate it!

[deleted] t1_j6luzds wrote on January 31, 2023 at 6:15 AM

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[deleted] t1_j6lweg1 wrote on January 31, 2023 at 6:32 AM

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madskilzz3 t1_j6m15ay wrote on January 31, 2023 at 7:31 AM

#1,650,094

401k- contribute up to match
Max out Roth IRA
Max out HSA (if you have a HDHP)
Up the % of your 401k contribution