Would you opt-in to a 401k?

[Free Moral Agent]

The company I was just hired at is offering a 401k through Fidelity Investments. They'll match 50% of my contribution that is up to 5% of my salary. I'm 28 now, would it be wise to opt-in or stay the hell away from a 401k?

 

[DamianTV]

Opt-in? Not only No but FUCK NO.

 

[cubical]

I would do it. The odds the government takes your 401k and gives you nothing is slim imo. Rewards outweigh the risk.

 

[Danke]

The company I was just hired at is offering a 401k through Fidelity Investments. They'll match 50% of my contribution that is up to 5% of my salary. I'm 28 now, would it be wise to opt-in or stay the hell away from a 401k?

If you're a taxpayer, it is >than a 3% pay raise. Are you willing to lock up 5% of your earnings for that?

 

[brandon]

You definitely want to contribute at least the 5% that they are going to match 50%. That's an instant 50% gain for you. If you want to contribute more or not is really up to you. Depends if you can afford it or not.

Play around with this calculator a bit to see how much your money will grow over the next 40 years. If you put in $5,000 a year for the next 40 years at an inflation adjusted return of 7%, your account will be worth over a million at retirement.

http://www.moneychimp.com/calculator/compound_interest_calculator.htm

 

[Brian4Liberty]

You definitely want to contribute at least the 5% that they are going to match 50%. That's an instant 50% gain for you. If you want to contribute more or not is really up to you. Depends if you can afford it or not.

Agree with that. You also have the added benefit that you can buy and sell in the 401(k) and later a rollover IRA all you want without worrying about the tax ramifications every year.

 

[Aden]

You definitely want to contribute at least the 5% that they are going to match 50%. That's an instant 50% gain for you. If you want to contribute more or not is really up to you. Depends if you can afford it or not.

Play around with this calculator a bit to see how much your money will grow over the next 40 years. If you put in $5,000 a year for the next 40 years at an inflation adjusted return of 7%, your account will be worth over a million at retirement.

http://www.moneychimp.com/calculator/compound_interest_calculator.htm

Calculators like those are figuring that the next 40-50 years will be as prosperous as the last 50. I do not have faith that stocks will give a 7-8% return in the coming years. If you believe that crap is going to hit the fan, that this depression will continue, or that America is in the beginning stages of decline, then there is a good chance you will lose money.

My wife's employer just offered her a matching 401k. She said thanks, but no thanks. I took the tax hit and closed out my Roth IRA late 2007. Personally, I am done with all those investment shenanigans.

 

[muzzled dogg]

Depends on match
My company doesn't match
No 401k here

 

[brandon]

Calculators like those are figuring that the next 40-50 years will be as prosperous as the last 50. I do not have faith that stocks will give a 7-8% return in the coming years. If you believe that crap is going to hit the fan, that this depression will continue, or that America is in the beginning stages of decline, then there is a good chance you will lose money.

My wife's employer just offered her a matching 401k. She said thanks, but no thanks. I took the tax hit and closed out my Roth IRA late 2007. Personally, I am done with all those investment shenanigans.

You can put whatever return rate you want in the calculator, it doesn't have to be 7%. I agree there certainly is a chance that America is slipping into a decline and the next several decades won't be that prosperous. But I think it's still a chance worth taking. If we are wrong and America is prosperous, I'd hate to face my retirement having completely missed out on all the gains.

The important thing is to diversify. If you fund your 401k, buy some property, buy some metals, and keep some cash you should be reasonably protected.

 

[musicmax]

No. A 401(k) puts your money into the "system". You are given limited investment options, and the scum of Goldman/TIAA/BOA/Pimco get their cut. Based on the combination of inflation, the likely tax rate when you withdraw, and the probability of .gov confiscation (in return for "safe" Treasury instruments) there is no way in hell that a liberty-minded individual can feed the beast by throwing their money into a 401(k).

 

[Acala]

You definitely want to contribute at least the 5% that they are going to match 50%. That's an instant 50% gain for you.

Not true. That "instant gain" is in the hands of bankers and untouchable for 30 years. There is nothing instant about it. It is also one of the riskiest investments in terms of the possiblility of government confiscation. A stroke of a pen in Washington and it is gone, baby.

I was so anxious to get out of my IRAs that I willingly paid the penalty and am glad I did.

 

[brandon]

Not true. That "instant gain" is in the hands of bankers and untouchable for 30 years.

That's not true at all. You can pay a 10% penalty and get your money at any time, as you also pointed out.

 

[Cowlesy]

You definitely want to contribute at least the 5% that they are going to match 50%. That's an instant 50% gain for you. If you want to contribute more or not is really up to you. Depends if you can afford it or not.

Play around with this calculator a bit to see how much your money will grow over the next 40 years. If you put in $5,000 a year for the next 40 years at an inflation adjusted return of 7%, your account will be worth over a million at retirement.

http://www.moneychimp.com/calculator/compound_interest_calculator.htm

Agree. Not only is your employer going to contribute cash to your retirement account that will grow tax free until retirement, but your contributions to the plan come out of your salary pre-tax, meaning you lower the amount of salary on which your taxes are calculated. Obviously it's pretty challenging to contribute the maximum per year of $16,500 to the plan, but if you did and let's assume your tax rate including Fed Income Tax, SS, Medicare, SALT were 30% all-in, that'd be $5,000 less you'd remit to Uncle Sam per year, and it'd be an investment fund earning money (hopefully).

Look, if the entire world goes to pot in a worldwide collapse, well, we're all doomed. But if we muddle along, and in the next 40 years we have some sort of breakthrough or right the ship, it'll be good to be invested. You just can't watch it day to day or you'll go bonkers.

 

[ctiger2]

I would opt-out. I cashed out ROTH, 401K etc 3yrs ago.

 

[Acala]

That's not true at all. You can pay a 10% penalty and get your money at any time, as you also pointed out.

I'll bet you can't withdraw the matching funds. Otherwise you could put 5% of your salary in, get the matching money and then take it all out, pay the penalty, and be ahead. I haven't looked but I'll bet you dinner that there is a rule the prevents it.

 

[BrendenR]

If the company matches, yes. I do.

If the company does not match, no, I wouldn't.

 

[angelatc]

The company I was just hired at is offering a 401k through Fidelity Investments. They'll match 50% of my contribution that is up to 5% of my salary. I'm 28 now, would it be wise to opt-in or stay the hell away from a 401k?

It's a no brainer. Where else are you going to get a guaranteed 50% return on your money?

 

[angelatc]

I'll bet you can't withdraw the matching funds. Otherwise you could put 5% of your salary in, get the matching money and then take it all out, pay the penalty, and be ahead. I haven't looked but I'll bet you dinner that there is a rule the prevents it.

The rules are regulated by federal regulation. He is probably 100% vested after 5 years.

Taking the money out before he retires also incurs a penalty of 10% plus the regular income tax that he isn't paying.

By biggest regret about leaving the workforce is my 401(k) contribution. I would be a millionaire a couple of times over when I retired if I didn't have a husband that I now know can't fucking hold a job.

 

[PaulineDisciple]

I would and do, but with one caveat, as soon as it gets built up enough to buy a vehicle, a good battle rifle or down payment on a house, I would borrow half of it out as soon as I could. Of course my 401K plan matches 100% up to 6% of my income so I stop at the 6%, so I am doubling my money right out of the chute. This way when I borrow half, I am basically getting all the money I invested and exchanging the FRN's for property of real value, if as rumors have it, in the event of an economic collapse, TPTB say sorry you lost all your money that you had invested in your 401K, I will laugh and tell them I already got mine. Right now I hear they are trying to pass legislation to keep people from doing what I keep doing because it really pisses them off when they see people getting their money back in this way and buying things that TPTB do not want you to buy.

 

[Revolution9]

I have worked alongside people who lost all their 401k during the .com bubble in their mid 50's. I would rather invest the money in my own way. I use tools...software, hardware, mechanical, electrical. They make me money. Firearms and fishing gear provide food where I am if I need to hit the wilds to procure protein and fats.. Mind you all my work is either for the company I own or for freelance clients. I would buy property and dwelling cash and no mortgage, then silver, then gold. (as has been done already) Then I would retire young and let my hobbies pay the bills when I need some spare spending cash. Live simply, work with joy, love abundantly and the rest takes care of itself.

Rev9