I need to contribute 5% of my salary and they will match 4%. Is that a good deal? What do I need to take into account?
2007-12-12 03:20:03 · 13 answers · asked by amce 2 in Business & Finance ➔ Personal Finance
Yes, Yes and Yes again. You're never too old to start investing. And if your company is offering you 401K and matching your funds then why would you turn down "free" money? Do it!
2007-12-12 03:28:19 · answer #1 · answered by dimples_msu 3 · 2⤊ 0⤋
Yes you should do it. Think of it this way, if they offered you a 4% raise you would take it, wouldn't you? That's what you're getting, only better. You get the 4% now plus interest. It helps at tax time too, since the money you contributed is not taxed at the end of the year. You'll never miss the 5% now, normally we spend most if not all of what we take home. As your income grows so will the amount that is going into your retirement account.
If it's properly invested you should be able to retire a multi-millionaire just by starting young and staying with it.
2007-12-12 11:33:07 · answer #2 · answered by It's Her Again!! 5 · 2⤊ 0⤋
I would at your age. My husband and I did not get that option from his company till he was about 32 and he had been working for them for over 7 yrs at that time and we are 39 now. We have only 54 thousand now from that original 401k, can you imagine how much we could actually have if it was offered to him when he started working for them at age 24?! Do it. Atleast they are matching 4% our first year they matched us 50 cents on the dollar then dropped from 3% to 1% until my husband went to another company and they match 5% for 5 yrs and will have lifetime match of 3% until age 55 then it will be 1 to 2%. But he also is getting quarterly bonuses and we usually take half and put that into our old 401k rollover since we have it in an agressive investment market. Good luck and I hope the company you work for meets your expectations.
2007-12-12 11:38:08 · answer #3 · answered by Karma of the Poodle 6 · 1⤊ 0⤋
You want to contribute at least the 4% they match. The additional 1% you can contribute really depends on your retirement strategy and other retirement vehicles you could be using instead of the 401K (eg a Roth IRA).
2007-12-12 14:11:31 · answer #4 · answered by BCP 2 · 0⤊ 0⤋
Do it man. It's never too early to start saving for retirement and not all companies offer a match...so yeah it's a good deal.
2007-12-12 11:31:32 · answer #5 · answered by *sigh* 2 · 1⤊ 0⤋
Yes do it right away. Since you are so young the magic of money componding can work fincial miracles for you. The fact that they match makes it even better, thats free money basically. Start learning about the magic of money componding since you are so young it's the perfect time to get your fincial future set up. Best of luck and happy holidays
2007-12-12 14:46:34 · answer #6 · answered by jt6341 3 · 0⤊ 0⤋
this is the money that you will get when you retire. If you want to trust that Social Security will pay all your bills when you retire don't join. If you leave your job you can roll it over to your next employer. them matching 4% is great some companies don't match at all.
2007-12-12 11:27:52 · answer #7 · answered by senorrobertoe 3 · 1⤊ 0⤋
401K's are almost always a good thing to take part in. The match is basically found money and it is pre-tax dollars.
2007-12-12 11:28:18 · answer #8 · answered by Carol Ann S 2 · 1⤊ 0⤋
If you turn it down, you’re turning away free money for retirement, but don’t put in more than the 5% limit.
2007-12-12 11:31:30 · answer #9 · answered by Anonymous · 0⤊ 0⤋
Yes...do it!
At your age, pick aggressive funds!
2007-12-12 12:21:38 · answer #10 · answered by Wayne Z 7 · 1⤊ 0⤋