I wouldn’t change your contribution under the condition thatHow much is too much for a 401k?
With company match, right now I am putting $2,000 a month into my 401k. I mean this is great, but should I back this down to say $1500 (my match wouldn't change, I'm way over the minimum amount needed) and put $500 a month into say a Roth or somewhere else?
Right now the 401k is my only retirement account aside from a pension that is capped out at a current value of ~$45k and nothing being added to it ever again.
Just curious if I have the right approach here or not. I'm really a "set and forget" type of person but also wondering if I need to have someone managing my finances at this point.
A. You have a rainy day/emergency fund set up. The general rule is that the rainy day fund should be very liquid (i.e. a savings or money market account) and be 6 months of expenses. I generally keep 6 months of paycheck in my rainy day fund, just to be conservative.
B. You don’t have any high interest debt floating around out there
If you put $2K/month in your retirement at a 6% returns (which is conservative), you’ll have about $1.7 million in your retirement account after about 30 years. That is a lot of money, but you can certainly spend that much in retirement. Reducing that to $1500/month drops it to $1.34 million. Still not chump change, either, but not as much as $1.7MM.