Is a 401K worth having?

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Fritzo

Fritzo

Lifer
Jan 3, 2001
41,885
2,125
126
Um....yeah? It's pretty much the best way to safely make 10+% on your money, and it has enough safeguards so you don't blow it early on a sports car in your 40's.
 
Atomic Playboy

Atomic Playboy

Lifer
Feb 6, 2007
16,432
1
81
What a ridiculous question. Obviously no, since you're not going to see that money until you retire, and there's hookers and blow available for purchase right now.
 
D

DaveSimmons

Elite Member
Aug 12, 2001
40,730
670
126
Yes.

10-32% in instant tax savings. Up to 100% matching money depending on your employer. Your investment grows tax-free until you withdraw it at retirement.
 
Ns1

Ns1

No Lifer
Jun 17, 2001
55,413
1,570
126
hell yes. 120% company match + the ability to borrow from it
 
K

Ksyder

Golden Member
Feb 14, 2006
1,829
1
81
ok next question... I just enrolled in my 401k program at work... there are tons of investment options available, like about 60 or so different funds- bonds and so forth. Looking at all of the available options, some are performing better than others but the fees seems to be similar on each fund.

How much diversification do you really need for this? At my age Under 35 I feel I should be aggressive but I have no idea what people do in this (ie how many different funds is their money split into)
 
C

Corporate Thug

Lifer
Apr 17, 2003
37,622
0
76
Ksyder said:
ok next question... I just enrolled in my 401k program at work... there are tons of investment options available, like about 60 or so different funds- bonds and so forth. Looking at all of the available options, some are performing better than others but the fees seems to be similar on each fund.

How much diversification do you really need for this? At my age Under 35 I feel I should be aggressive but I have no idea what people do in this (ie how many different funds is their money split into)
Click to expand...

most investment companies offer "life style" funds where you can put in your risk tolerance, age, required retirement income, etc. and they will match a fund w/ your preferences/goals.
 
Jeff7

Jeff7

Lifer
Jan 4, 2001
41,599
19
81
Yes, but mainly because the company matches 50% on up to 4% of salary.

The fund options there are too costly.
The rest of my investment money is going into index funds at Vanguard.
 
Last edited:
Fritzo

Fritzo

Lifer
Jan 3, 2001
41,885
2,125
126
Ksyder said:
ok next question... I just enrolled in my 401k program at work... there are tons of investment options available, like about 60 or so different funds- bonds and so forth. Looking at all of the available options, some are performing better than others but the fees seems to be similar on each fund.

How much diversification do you really need for this? At my age Under 35 I feel I should be aggressive but I have no idea what people do in this (ie how many different funds is their money split into)
Click to expand...

There should be an auto-balancing feature available where they picks funds for you. At your age, pick "Moderately Aggressive" or something equivalent. With the economy on the rebound you should go gangbusters for the next couple of years.
 
K

Ksyder

Golden Member
Feb 14, 2006
1,829
1
81
Corporate Thug said:
most investment companies offer "life style" funds where you can put in your risk tolerance, age, required retirement income, etc. and they will match a fund w/ your preferences/goals.
Click to expand...

Mine is run through Paychex and on their site you have to choose between all of those options I mentioned above... nothing prepackaged for me, I guess.

I kind of went through and just split it into the funds with the highest historical return... hope this works out ok...:confused:
 
K

Ksyder

Golden Member
Feb 14, 2006
1,829
1
81
Fritzo said:
There should be an auto-balancing feature available where they picks funds for you. At your age, pick "Moderately Aggressive" or something equivalent. With the economy on the rebound you should go gangbusters for the next couple of years.
Click to expand...

I just read on the site that it is "self directed" 401k... I don't know if it is because that is cheaper or what... or more flexibility for the investor... I don't know... this is fairly new for me...
 
Atomic Playboy

Atomic Playboy

Lifer
Feb 6, 2007
16,432
1
81
Ksyder said:
I just read on the site that it is "self directed" 401k... I don't know if it is because that is cheaper or what... or more flexibility for the investor... I don't know... this is fairly new for me...
Click to expand...

You should probably speak with your HR department and see if they can steer you towards a financial planner who can help you plan the direction of your 401k. Once you get everything in place, you shouldn't need to micromanage it, just sit back and let it build.
 
nboy22

nboy22

Diamond Member
Jul 18, 2002
3,304
1
81
Yes, do yourself a favor and buy the book by Ramit Sethi called, "I will teach you to be rich." It is kind of like a quick start guide to investing and will teach you the basics on what you need to know.
 
gevorg

gevorg

Diamond Member
Nov 3, 2004
5,075
1
0
$100 at age 25 is better than $1000 at age 65. Just ask your penis.
 
H

hans007

Lifer
Feb 1, 2000
20,212
17
81
i contribute the maximum that my employer will match.

amazingly my employer matches 6%.

that said i tend to not contribute any more , or at all of there is no match (at other employers).

yes you will get a tax break, but you basically are forced to gamble your savings in the stock market so it depends on how you feel about that, unless you can find a bond fund in there, so it depends on your company 401k plan.
 
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