Question

Janessa is 29 years old and she is about to start her first full-time job. She...

Janessa is 29 years old and she is about to start her first full-time job. She is currently single and she is willing to take the appropriate risk she needs to prepare for retirement. Her starting annual salary is $63,000 and she has no retirement savings yet. Her employer will match 100% of her contributions up to the first 4% of her salary to the company's 401 (K) account.

Question:

1. What amount should Janessa should be saving each year?

2.How much of the total annual savings should she be saving in her 401 (K), a Traditional IRA, and a ROTH IRA?

3.Why did you pick each amount?

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Answer #1

1) Each year she shall be saving = 63,000*0.04=$2,520

This shall be done as to get the highest same amount from employer.

2) The total savings she shall be saving in 401(K) shall be $2,520 as this shall be matched by employer. Whatever she saves would just double uptil this amount. If she wants to save more then only shall se mover to IRAs. Until then IRAs shall have zero amount

3) $2,520 she saves shall be matched by employer. Whatever she saves would just double uptil this amount. If she wants to save more then only shall se mover to IRAs

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