401(K) plan question?

Question

My workplace offers ING funds for the 401(k). The account management fee yearly is $15. I may choose one of their funds called ING Global something, which has a total operating expenses of 0.66/year. I invest in a ROTH IRA at $50/month. I live on paycheck to paycheck and have a very tight budget. I'm not sure what to do. One voice says to not invest in the 401(k) and the other voice says go ahead. The starting contribution is $500 and I don't have that kind of money right now. I kind of think in a few years when I have a better job from being a rad tech, I make good money.

Answer 1

In general I recommend investing as much money as you can afford to set aside. Of course if you don't have 500 bucks you don't have 500 bucks. The one thing I woud caution you against is continuiously putting off putting money away--but if you aren't making enough to build up savings for the near term future don't worry about it.

Answer 2

It's good that you're making contributions to the Roth IRA. It would be better if you also made contributions to the 401(k). You don't say whether or not your employer would give you a matching contribution in the 401(k). If so, then you should make every effort to open a 401(k) account, because the employer match gives you an instant profit. Even if you don't get an employer match, starting the 401(k) now gives you more years of compounded growth. Compounding is the most powerful financial tool you have.

See the webpages below for more info.

Answer 3

OK.... you have the answer already. You said "I make good money". So you're making the biggest financial mistake of them all..... you don't follow the "pay yourself first" rule.

It's irresponsible not to handle you retirement expense any differently than your electric, phone, rent or mortgage payments. IT MUST BE PAID. Psych yourself up to only think this way and you'll be fine. Running away from reality only hurts you in the future. PAY YOURSELF FIRST!

(and don't say "he doesn't understand")......... From age 40 to almost 48 I made terrible money (health reasons).... it never stopped me from following this rule. It's "part" of being an adult....... delayed gratification.

Answer 4

there is nothing wrong on putting you money aside now,pay yourself ,10% of you salary if possible.cut down spending on others,like coffee,brewyour own then cook, and other thing you use in bathroom such as shampoo makeup, dont buy toomuch clothes.things like that you can afford it.please dont wait to long ,while your getting you r losing your opportunity to earn. nerver touch your retiment funds too. save some for emerg beside that.there is no making better money.if you spend it all.you count is whats on the bank