This is a common question new graduates ask. Although I graduated two years ago, I didn’t really run the numbers until recently… and boy am I disappointed in past-Cody for not doing this sooner.
The spreadsheet I used to answer this question for myself is below (but with fake numbers :-). Punch in your own numbers to see how much money you can save by increasing your 401(k) contributions. Now that I know better, I’m saving an extra $3,000 each year by maxing out my 401(k). How much can you save?
Note this spreadsheet makes some tax assumptions, such as taking a standard deduction instead of itemizing, no mortgage interest or property tax deductions, etc. Feel free make a copy of the spreadsheet and tweak for your own situation.
Feel free to share back any improved versions of the spreadsheet in the comments!
How much are you going to save?