Should I contribute to my 401k

[Turin39789]

I had 401k matching at my previous job, but was unable to stay for the 3 years to get vested. I moved so I could go back to school and got a new job with another company. At my current company I have been contributing to my 401k but the company does'nt match until I have been here for a year.

 

[Exterous]

Invest in a RothIRA, or pay off high intrest debt until the year is up. Then invest to the point of match. Depending on the return rate of the 401k after the point of match evaluate the options of additional contribution to the 401k or investing elsewhere.

 

[FoBoT]

there you go, what Exterous said

 

[Britboy]

I'm in a similar position. If you plan to save any money at all for retirement then you probably should, it's tax free investing. Of course you might want to start an IRA somewhere instead, where you have more choice on investments and are not tied to your employer

 

[DaveSimmons]

Do the $4K Roth for 2006, pay off any debt, set up a high interest savings account at INGDirect.com or similar and put at least 2 months of living expenses into it.

If you have money left over, the 401k can still be a good investment since it reduces your income tax bill. So for the first year the growth is (whatever the investments do)% plus (your highest tax bracket rate)%. That's often 20-30%+ for the first year.

For the Roth I usually recommend vanguard.com for their excellent stock index mutual funds like VFINX (S&P 500), but fidelity.com is also supposed to be decent.

 

[dullard]

Others didn't specify the reasons WHY to use a Roth instead of a 401K. Basically, you can usually do better on your own than by going through your employer. For example, I work for a small business and 4% of what I invest is taken as a fee instantly (I'd be starting out in a massive hole.) Other 401k problems: you have mandatory withdrawals, penalties with early withdrawals, limited investment choices, etc.

Basically, with just a little effort on your part, you can do better without the 401k. If you aren't willing or able to do that effort, then just do the 401k.

 

[DaWhim]

max out your roth ira, then put any excess saving into i-bond

/thread