401k match question

[RossMAN]

I am 100% vested in my employer's 401k, contributing 10% of my gross monthly income, of which 6% is matched by my employer.

The match is credited to my account at the end of every quarter which will be tomorrow 31 March 2004.

If I change how my 401k is invested (my elections) today to something with a higher yield will it have a noticeable impact on my 3/31 match?

 

[GasX]

It shouldn't have an effect. The match is based solely on the dollar amount put into the plan.

 

[RossMAN]

Hmmn ok I didn't think of that.

 

[kranky]

I know mwilding already answered your question, but I gotta know....

Were you thinking "hot deal" in some form?

 

[RossMAN]

Originally posted by: kranky
I know mwilding already answered your question, but I gotta know....

Were you thinking "hot deal" in some form?

Nope, something worse

Don't kill me.







































Going to take a withdrawal (even worse than a 401k loan) to pay off some cc debt ... the cc debt APR % is higher than the yield on the 401k. There will be a 28% hit for federal and state taxes but you gotta do what you gotta do.

 

[CPA]

Originally posted by: RossMAN

Originally posted by: kranky
I know mwilding already answered your question, but I gotta know....

Were you thinking "hot deal" in some form?

Nope, something worse

Don't kill me.


Going to take a withdrawal (even worse than a 401k loan) to pay off some cc debt ... the cc debt APR % is higher than the yield on the 401k. There will be a 28% hit for federal and state taxes but you gotta do what you gotta do.

Rossman, I've done the same thing. And while conventional wisdom screams "don't take an early withdrawal on your 401K", conventional wisdom is sometimes not right. Just like there are opportune times to take a loan, there are opportune times to bite the bullet and withdraw.

BTW, don't forget the 10% penalty you will have to pay next April 15th.

 

[rahvin]

Originally posted by: CPA

Originally posted by: RossMAN

Originally posted by: kranky
I know mwilding already answered your question, but I gotta know....

Were you thinking "hot deal" in some form?

Nope, something worse

Don't kill me.


Going to take a withdrawal (even worse than a 401k loan) to pay off some cc debt ... the cc debt APR % is higher than the yield on the 401k. There will be a 28% hit for federal and state taxes but you gotta do what you gotta do.

Rossman, I've done the same thing. And while conventional wisdom screams "don't take an early withdrawal on your 401K", conventional wisdom is sometimes not right. Just like there are opportune times to take a loan, there are opportune times to bite the bullet and withdraw.

BTW, don't forget the 10% penalty you will have to pay next April 15th.

I quote to emphasize the 10%, this is automatic on any early withdrawl. So not just 28% fed and state but 10% additional for violating the plan.

 

[GasX]

remember - the interest you pay on your 401k loan is payable to yourself.

 

[RossMAN]

Originally posted by: rahvin

Originally posted by: CPA

Originally posted by: RossMAN

Originally posted by: kranky
I know mwilding already answered your question, but I gotta know....

Were you thinking "hot deal" in some form?

Nope, something worse

Don't kill me.


Going to take a withdrawal (even worse than a 401k loan) to pay off some cc debt ... the cc debt APR % is higher than the yield on the 401k. There will be a 28% hit for federal and state taxes but you gotta do what you gotta do.

Rossman, I've done the same thing. And while conventional wisdom screams "don't take an early withdrawal on your 401K", conventional wisdom is sometimes not right. Just like there are opportune times to take a loan, there are opportune times to bite the bullet and withdraw.

BTW, don't forget the 10% penalty you will have to pay next April 15th.

I quote to emphasize the 10%, this is automatic on any early withdrawl. So not just 28% fed and state but 10% additional for violating the plan.

Thanks for the reminder. As we're all aware I totally suck at saving and would prefer to take the "hit" upfront. So it they deduct the 28% and 10% penalties upfront then there's less of a "surprise" 4/15/05.

Mwilding - Thanks and I am already aware of that. If taking out a loan were an option then I would gladly for that but it isn't. Paying off a credit card and CLOSING the account will be a welcome relief.

 

[CPA]

Your administrator will NOT withhold the 10% penalty. That is up to you to do on your tax filing.

And I'm not here to slap you on the wrist, but a 401k loan or transfer to a lower or 0% card could not fix your problem?

 

[tarheelmm]

I just signed a loan from my bank for 5.34% over five years to pay off my CC debt. Saving me around $18k long term and cutting monthly payments in half.
At the same time I opened a line of credit against my house for emergency use. The thing I didnt know about it is if you dont draw on the credit you dont owe a thing and the bank picked up the closing costs.
Just a thought.

 

[dquan97]

There's no low APR balance transfer oppotunities available?

 

[RossMAN]

Originally posted by: CPA
Your administrator will NOT withhold the 10% penalty. That is up to you to do on your tax filing.

And I'm not here to slap you on the wrist, but a 401k loan or transfer to a lower or 0% card could not fix your problem?

Thank you and I appreciate you not 'slapping my wrist'.

Nope a 0% cc would not fix the problem. Filing banko would probably fix it all, I think I'll do that

 

[kranky]

Not the best option, but as CPA said, sometimes it's what must be done.

Hope this encourages you to be more diligent with saving! (Seriously)

 

[woowoo]

Fake a major illness

 

[RossMAN]

I repeat from my earlier post, a 401k loan is NOT an option.

If it were, I would go that route.

 

[dquan97]

Originally posted by: RossMAN
I repeat from my earlier post, a 401k loan is NOT an option.

If it were, I would go that route.

what about selling a kidney on FS/FT?

 

[rahvin]

Originally posted by: RossMAN
I repeat from my earlier post, a 401k loan is NOT an option.

If it were, I would go that route.

What you really need to do is stop spending money as numerous people around here have already told you to do. I mean what the hell do you need 50 domains for? You should join shopaholics or Shoppers anonymous or even better put yourself on an allowance of spendable money and cut up all your CC's. From all your posts on here you have made it quite clear that you are incapable of managing credit and as a result I would recommend that you avoid credit entirely. But you didn't ask for that advice so I won't charge ya.

 

[SCSIfreek]

Dammit ross, how could you let yourself slip in so deep? I for one was like you until I actually stop myself from looking at Hotdeals. As rahvin mentioned you should put yourself on a allowance program and cut up all your CCs. get a hold of yourself. :[

--Scsi

 

[PricklyPete]

Originally posted by: RossMAN
I am 100% vested in my employer's 401k, contributing 10% of my gross monthly income, of which 6% is matched by my employer.

The match is credited to my account at the end of every quarter which will be tomorrow 31 March 2004.

If I change how my 401k is invested (my elections) today to something with a higher yield will it have a noticeable impact on my 3/31 match?

I would strongly, strongly suggest not contributing more than the 6% that is matched when you have cc debt to pay off. The fact that you are getting matched up to the 6% makes it a no brainer to contribute that amount. Contributing more should only occur in my opinion when you have no debt and no other ways to better invest your money.

401k money that is matched is like getting free money, but past that the benefits of 401k seem to be pretty poor. Your not really doing yourself that much of a favor because the money is not taxed. Remember that when you will probably be paying taxes...there is a good chance that the tax rate will be worse (of course it could be better as well). Unless you have maxed out your contributions to an IRA and fear putting money in some well researched mutual funds...you should not be putting more than 6% in 401k. Especially if you have any kind of debt.

Go ahead and cut up the cc, change your 401k contribution to 6% and the amount you get each month from the 4% after tax should be setup to automatically pay off whatever debt you are currently working on.

 

[RossMAN]

Originally posted by: rahvin

Originally posted by: RossMAN
I repeat from my earlier post, a 401k loan is NOT an option.

If it were, I would go that route.

What you really need to do is stop spending money as numerous people around here have already told you to do. I mean what the hell do you need 50 domains for? You should join shopaholics or Shoppers anonymous or even better put yourself on an allowance of spendable money and cut up all your CC's. From all your posts on here you have made it quite clear that you are incapable of managing credit and as a result I would recommend that you avoid credit entirely. But you didn't ask for that advice so I won't charge ya.

You are absolutely correct, however it's easier said than done

 

[rahvin]

Originally posted by: RossMAN

Originally posted by: rahvin

Originally posted by: RossMAN
I repeat from my earlier post, a 401k loan is NOT an option.

If it were, I would go that route.

What you really need to do is stop spending money as numerous people around here have already told you to do. I mean what the hell do you need 50 domains for? You should join shopaholics or Shoppers anonymous or even better put yourself on an allowance of spendable money and cut up all your CC's. From all your posts on here you have made it quite clear that you are incapable of managing credit and as a result I would recommend that you avoid credit entirely. But you didn't ask for that advice so I won't charge ya.

You are absolutely correct, however it's easier said than done

Excersize is easier said than done. Quitting spending is easy, simply imagine that you have no money and that credit doesn't exist. This should be realatively simple because if you bankruptcy you won't have either. Pay off the cards and close the accounts, if you don't have the money don't what you don't have. I've never understood that people can spend more money than they have. The only thing I have ever bought on credit is my home.

 

[Lvis]

Last year I cashed out a ira mutal fund, at one point it was worth 4k, by last January it was worth less than 2k.

I now have a 401k at work, so I used the money to pay off a credit card.

This year I paid the taxes on it, that sucked.

If I had it to do over, I wouldn't. The tax bill was just too high.

I'd only do it as a last resort.