I have a job now but its not going to be permantely but i'm thinking about using the 401k plan or not using it
2007-03-29 11:37:15 · 7 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
Its always a good Idea to save money for retirement..
Yes start one.. and keep investing in it
2007-03-29 11:46:19 · answer #1 · answered by Lori B 2 · 0⤊ 0⤋
It depends on whether you employer offers a matching contribution. Most do. Some make you work for a year before they will match you contributions. So, there are two answers based on (1) if they offer a matching contribution or (2) if they don't.
(1) If they offer a contribution match -- Start right now! Contribute as much as you can up to the amount they match. For example: If they match 50 cents on the dollar up to 8%, then contribute 8% of your paycheck to the 401(k) and your employer will put in what amounts to be 4%. Example 2: If they match $1 for every $1 up to 5%, then contribute 5% of your paycheck and they will put in the same amount.
(2) If they don't offer a matching contribution, aka, they put in 0%. In this situation you can choose to use your 401(k) for retirement savings and investments or you can open an IRA. Between these two you would want to choose the one with the most investment options, since they have basically the same tax deferred benefits. Usually IRAs have more investment options. Fidelity, Vanguard, and T. Rowe Price are a few good places that you can open an IRA and buy no-load, low-cost indexed mutual funds.
Either way, you want to start investing now. There is no substitute for the time value of money.
2007-03-29 19:11:25 · answer #2 · answered by Justin H 1 · 0⤊ 0⤋
definitely do it...you can keep the 401k even when you change jobs. If the new job has one, you can roll it over without penalty. If not, you can keep it but not add to it, although it will keep working and making money (we hope!). It is never too early. Even small amounts when you're in your twenties add up when they are in there for 40+ years. I know people that put 25.00/month in in their 20's and while they increased contributions, they never really made a whole lot, but now have over 100 grand saved. (late 40's). They would have saved nothing on their own, without the 401k and the investment options they offer. Good luck.
2007-03-29 19:25:15 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Yeah get it the sooner the better, I started mines at 20 and 8 years later I have over 30g in my 401k, the good thing about having these is you can take out a loan and pay back to yourself. Also you can set how much you want taken out I set mines to 6% thats where my company matches it but you can go all the way to 25% I think or is it 15%. But yeah get it.
2007-03-29 18:48:16 · answer #4 · answered by eg_303 5 · 0⤊ 0⤋
USE IT!
Invest the IRS maximum if you can afford to (15%, I think?) This will help you at tax time.
At the least, invest the maximum percentage of the company match, since that will be free money for you.
When you leave the job, you can either roll it over to an IRA with the same brokerage firm or roll it over to your new company's 401(k).
2007-03-29 21:17:25 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Do it ASAP.
However, the Dems are talking about taking a one time 15% of all IRAs, 401Ks, and pension plans.
Lord help us if they take Congress and presidency, and this is ever introduced.
We know that withdrawls at retirement are taxed.
The tax reductions already in place will expire, FO SURE!
2007-03-29 18:51:49 · answer #6 · answered by ed 7 · 0⤊ 0⤋
Today.
2007-03-29 22:55:09 · answer #7 · answered by Common Sense 7 · 0⤊ 0⤋