401k thoughts

M

mom2lillian

New member
I contribute maximum I am allowed to contribute and get my companies match. At a minimum you should put in whatever you can to get company match because its free money and earning interest.

I can use it as a loan if need be and then I pay myself back out of my pay check so that is something to consider (often no penalties but your account will stop earning interest most likely but wont have to pay fees like a bank loan).

Also something I didnt see mentioned, funerals are expensive and who knows if we will be leavign our loved ones medical bills etc to pay so it is nice ot have it there at least for that.

Now that I have a sizeable 401K built up it is SO tempting to withdrawl it all and pay off all my debt but you should NEVER ever do that due to all the penalties so if your not in it for the long haul look into other investmetn options.
 
M

mom2lillian

New member
I contribute maximum I am allowed to contribute and get my companies match. At a minimum you should put in whatever you can to get company match because its free money and earning interest.

I can use it as a loan if need be and then I pay myself back out of my pay check so that is something to consider (often no penalties but your account will stop earning interest most likely but wont have to pay fees like a bank loan).

Also something I didnt see mentioned, funerals are expensive and who knows if we will be leavign our loved ones medical bills etc to pay so it is nice ot have it there at least for that.

Now that I have a sizeable 401K built up it is SO tempting to withdrawl it all and pay off all my debt but you should NEVER ever do that due to all the penalties so if your not in it for the long haul look into other investmetn options.
 
M

mom2lillian

New member
I contribute maximum I am allowed to contribute and get my companies match. At a minimum you should put in whatever you can to get company match because its free money and earning interest.

I can use it as a loan if need be and then I pay myself back out of my pay check so that is something to consider (often no penalties but your account will stop earning interest most likely but wont have to pay fees like a bank loan).

Also something I didnt see mentioned, funerals are expensive and who knows if we will be leavign our loved ones medical bills etc to pay so it is nice ot have it there at least for that.

Now that I have a sizeable 401K built up it is SO tempting to withdrawl it all and pay off all my debt but you should NEVER ever do that due to all the penalties so if your not in it for the long haul look into other investmetn options.
 
M

mom2lillian

New member
I contribute maximum I am allowed to contribute and get my companies match. At a minimum you should put in whatever you can to get company match because its free money and earning interest.

I can use it as a loan if need be and then I pay myself back out of my pay check so that is something to consider (often no penalties but your account will stop earning interest most likely but wont have to pay fees like a bank loan).

Also something I didnt see mentioned, funerals are expensive and who knows if we will be leavign our loved ones medical bills etc to pay so it is nice ot have it there at least for that.

Now that I have a sizeable 401K built up it is SO tempting to withdrawl it all and pay off all my debt but you should NEVER ever do that due to all the penalties so if your not in it for the long haul look into other investmetn options.
 
M

mom2lillian

New member
I contribute maximum I am allowed to contribute and get my companies match. At a minimum you should put in whatever you can to get company match because its free money and earning interest.

I can use it as a loan if need be and then I pay myself back out of my pay check so that is something to consider (often no penalties but your account will stop earning interest most likely but wont have to pay fees like a bank loan).

Also something I didnt see mentioned, funerals are expensive and who knows if we will be leavign our loved ones medical bills etc to pay so it is nice ot have it there at least for that.

Now that I have a sizeable 401K built up it is SO tempting to withdrawl it all and pay off all my debt but you should NEVER ever do that due to all the penalties so if your not in it for the long haul look into other investmetn options.
 
L

luke

Guest
Amy,

I crossed that bridge a long time ago and decided not to invest. Maybe I am throwing free money away but then again I always looked at it like I am going to die way before retirement so I might as well get it now. For the record, I am a finance guy, I have a MBA and we make a good living. So it may not make finacial sense for me not to invest but I get a little extra spending cash and that is what is important to me. I am trying to live for today and money certainly makes it easier to buy christmas presents!

take care
 
L

luke

Guest
Amy,

I crossed that bridge a long time ago and decided not to invest. Maybe I am throwing free money away but then again I always looked at it like I am going to die way before retirement so I might as well get it now. For the record, I am a finance guy, I have a MBA and we make a good living. So it may not make finacial sense for me not to invest but I get a little extra spending cash and that is what is important to me. I am trying to live for today and money certainly makes it easier to buy christmas presents!

take care
 
L

luke

Guest
Amy,

I crossed that bridge a long time ago and decided not to invest. Maybe I am throwing free money away but then again I always looked at it like I am going to die way before retirement so I might as well get it now. For the record, I am a finance guy, I have a MBA and we make a good living. So it may not make finacial sense for me not to invest but I get a little extra spending cash and that is what is important to me. I am trying to live for today and money certainly makes it easier to buy christmas presents!

take care
 
L

luke

Guest
Amy,

I crossed that bridge a long time ago and decided not to invest. Maybe I am throwing free money away but then again I always looked at it like I am going to die way before retirement so I might as well get it now. For the record, I am a finance guy, I have a MBA and we make a good living. So it may not make finacial sense for me not to invest but I get a little extra spending cash and that is what is important to me. I am trying to live for today and money certainly makes it easier to buy christmas presents!

take care
 
L

luke

Guest
Amy,

I crossed that bridge a long time ago and decided not to invest. Maybe I am throwing free money away but then again I always looked at it like I am going to die way before retirement so I might as well get it now. For the record, I am a finance guy, I have a MBA and we make a good living. So it may not make finacial sense for me not to invest but I get a little extra spending cash and that is what is important to me. I am trying to live for today and money certainly makes it easier to buy christmas presents!

take care
 
C

cdale613

New member
One more for investing in a 401k.

Consider the following:

If you make $50,000 a year and set aside 8% of your income, that's about $4,000 into savings, before taxes. It would be harder to save the same 4,000 after taxes, and you end up paying less income tax.

If your employer matches up to say 7% of your income, that is a "free" 3,500 dollars a year - before any interest starts acruing.

If you then set up mutual funds within your 401K, and they return a respectible 10% in interest each year, that is another 700 bucks. (If you are young, all stock, slightly higher risk funds really are a good idea... but I digress...)

In one year, with minimal effort, you've saved about 8k without even thinking about it. You cannot (legally) beat that kind of return as a small investor with only a moderate income and no savings.

401ks are long term investment tools, and over time the compounding interest on this money will double your investment many times over.

Obviously accessing the money in a 401k is harder than using your checking account... but, even if your timeline is only 5-10 years, 401k's let you access your money for a downpayment on your first house, hardship type situations etc, for a much reduced penalty. If you are still worried about the "I may not live to retirement" idea, if you plan on ever being married, or having children, a 401k is a great way to leave your loved ones something.

Personally, I plan on retiring, and would only use 401k money before retirement in the most dire situations. I also would not use if for a downpayment due to the loss of compound interest. Having the goal of saving for a downpayment helps me save a percentage of my take home pay.

It is such a shame that so many people do not take advantage of this investment tool, especially when a company match is involved.

Chris

27 m w/CF
 
C

cdale613

New member
One more for investing in a 401k.

Consider the following:

If you make $50,000 a year and set aside 8% of your income, that's about $4,000 into savings, before taxes. It would be harder to save the same 4,000 after taxes, and you end up paying less income tax.

If your employer matches up to say 7% of your income, that is a "free" 3,500 dollars a year - before any interest starts acruing.

If you then set up mutual funds within your 401K, and they return a respectible 10% in interest each year, that is another 700 bucks. (If you are young, all stock, slightly higher risk funds really are a good idea... but I digress...)

In one year, with minimal effort, you've saved about 8k without even thinking about it. You cannot (legally) beat that kind of return as a small investor with only a moderate income and no savings.

401ks are long term investment tools, and over time the compounding interest on this money will double your investment many times over.

Obviously accessing the money in a 401k is harder than using your checking account... but, even if your timeline is only 5-10 years, 401k's let you access your money for a downpayment on your first house, hardship type situations etc, for a much reduced penalty. If you are still worried about the "I may not live to retirement" idea, if you plan on ever being married, or having children, a 401k is a great way to leave your loved ones something.

Personally, I plan on retiring, and would only use 401k money before retirement in the most dire situations. I also would not use if for a downpayment due to the loss of compound interest. Having the goal of saving for a downpayment helps me save a percentage of my take home pay.

It is such a shame that so many people do not take advantage of this investment tool, especially when a company match is involved.

Chris

27 m w/CF
 
C

cdale613

New member
One more for investing in a 401k.

Consider the following:

If you make $50,000 a year and set aside 8% of your income, that's about $4,000 into savings, before taxes. It would be harder to save the same 4,000 after taxes, and you end up paying less income tax.

If your employer matches up to say 7% of your income, that is a "free" 3,500 dollars a year - before any interest starts acruing.

If you then set up mutual funds within your 401K, and they return a respectible 10% in interest each year, that is another 700 bucks. (If you are young, all stock, slightly higher risk funds really are a good idea... but I digress...)

In one year, with minimal effort, you've saved about 8k without even thinking about it. You cannot (legally) beat that kind of return as a small investor with only a moderate income and no savings.

401ks are long term investment tools, and over time the compounding interest on this money will double your investment many times over.

Obviously accessing the money in a 401k is harder than using your checking account... but, even if your timeline is only 5-10 years, 401k's let you access your money for a downpayment on your first house, hardship type situations etc, for a much reduced penalty. If you are still worried about the "I may not live to retirement" idea, if you plan on ever being married, or having children, a 401k is a great way to leave your loved ones something.

Personally, I plan on retiring, and would only use 401k money before retirement in the most dire situations. I also would not use if for a downpayment due to the loss of compound interest. Having the goal of saving for a downpayment helps me save a percentage of my take home pay.

It is such a shame that so many people do not take advantage of this investment tool, especially when a company match is involved.

Chris

27 m w/CF
 
C

cdale613

New member
One more for investing in a 401k.

Consider the following:

If you make $50,000 a year and set aside 8% of your income, that's about $4,000 into savings, before taxes. It would be harder to save the same 4,000 after taxes, and you end up paying less income tax.

If your employer matches up to say 7% of your income, that is a "free" 3,500 dollars a year - before any interest starts acruing.

If you then set up mutual funds within your 401K, and they return a respectible 10% in interest each year, that is another 700 bucks. (If you are young, all stock, slightly higher risk funds really are a good idea... but I digress...)

In one year, with minimal effort, you've saved about 8k without even thinking about it. You cannot (legally) beat that kind of return as a small investor with only a moderate income and no savings.

401ks are long term investment tools, and over time the compounding interest on this money will double your investment many times over.

Obviously accessing the money in a 401k is harder than using your checking account... but, even if your timeline is only 5-10 years, 401k's let you access your money for a downpayment on your first house, hardship type situations etc, for a much reduced penalty. If you are still worried about the "I may not live to retirement" idea, if you plan on ever being married, or having children, a 401k is a great way to leave your loved ones something.

Personally, I plan on retiring, and would only use 401k money before retirement in the most dire situations. I also would not use if for a downpayment due to the loss of compound interest. Having the goal of saving for a downpayment helps me save a percentage of my take home pay.

It is such a shame that so many people do not take advantage of this investment tool, especially when a company match is involved.

Chris

27 m w/CF
 
C

cdale613

New member
One more for investing in a 401k.

Consider the following:

If you make $50,000 a year and set aside 8% of your income, that's about $4,000 into savings, before taxes. It would be harder to save the same 4,000 after taxes, and you end up paying less income tax.

If your employer matches up to say 7% of your income, that is a "free" 3,500 dollars a year - before any interest starts acruing.

If you then set up mutual funds within your 401K, and they return a respectible 10% in interest each year, that is another 700 bucks. (If you are young, all stock, slightly higher risk funds really are a good idea... but I digress...)

In one year, with minimal effort, you've saved about 8k without even thinking about it. You cannot (legally) beat that kind of return as a small investor with only a moderate income and no savings.

401ks are long term investment tools, and over time the compounding interest on this money will double your investment many times over.

Obviously accessing the money in a 401k is harder than using your checking account... but, even if your timeline is only 5-10 years, 401k's let you access your money for a downpayment on your first house, hardship type situations etc, for a much reduced penalty. If you are still worried about the "I may not live to retirement" idea, if you plan on ever being married, or having children, a 401k is a great way to leave your loved ones something.

Personally, I plan on retiring, and would only use 401k money before retirement in the most dire situations. I also would not use if for a downpayment due to the loss of compound interest. Having the goal of saving for a downpayment helps me save a percentage of my take home pay.

It is such a shame that so many people do not take advantage of this investment tool, especially when a company match is involved.

Chris

27 m w/CF
 
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