Since you already are putting funds towards retirement (401k), I would recommend you focus on building an emergency fund next. You have a tight budget and you mentioned you have no savings.
An emergency fund can be as low as 1k but in a perfect world should cover 3-6 months of expenses. It gives you the peace of mind, in case something unexpected happens, you have some funds to cover any expenses.
Put 200$ - 250$ (or as much / little you can afford) into a separate savings account/ high-yield savings account every month to build up some cash reserve first, before you add more money towards retirement.
@1prettyorchid wrote:38 y/o single woman. I make 44k year and I've been at my job for 5 years now. Employer matches 6% for 401k and pension after 5 years invested.
After my deductions, I net around $2300 (401k, taxes, ins, daycare, 401k loan, etc)
After my bills are paid (rent, utilities, cell phone, car pmt, TV subscriptions, and internet) i have about $720 left over. This is not including gas or food. I currently work from home and my son (15) stays with dad a majority of the time and daughter (2) with me. So these expenses vary.
I would like to contribute $250/ month to a roth ira. Is this wise or do I need to wait until I'm in a better position? I currently have no savings. 10k in my 401k (loan 5k). And would like to use this as a savings acct for retirement and/or a new home in the future.
IMHO the answer is no. Your 401k and pension provide good enough coverage on retirement, and you would be better off putting the money in a savings account that you can access if you need it. The penalty for IRA withdrawals is severe.
OP,
If I woke up in your shoes tomorrow, I would concentrate on building an emergency fund and paying off the 401k loan. The gains lost (due to the loan) would bother me enough to try and get rid of it quick.
