My coworker didn't sign up for our 401k program because he thinks, "investing is kind of a gamble."

Then what's stopping you from putting 100% of your money into the stock market?

Because he's not okay with the risk.

Your 401k should have a risk adverse fund that doesn't lose money. Obviously, it doesn't gain much either. Show them that.

pop_pop!_v2.2.1 wrote:

Because he's not okay with the risk.

Your 401k should have a risk adverse fund that doesn't lose money. Obviously, it doesn't gain much either. Show them that.

If there's matching from the company then that barely even matters, it's no longer behavior under the realm of rational thought.

How do you know he didn't put his money into his personal IRA? Personal IRAs are a better choice than bad 401(k)s.

iifii wrote:

Then what's stopping you from putting 100% of your money into the stock market?

Because they don't match 100% of your money, only 5%.

Blah Blah Blah Blah wrote:

How do you know he didn't put his money into his personal IRA? Personal IRAs are a better choice than bad 401(k)s.

Gee, because 1) he said "investing is kind of a gamble" and 2) he's turning down an employer match. He's an idiot.

dsgdsfsdfdsf wrote:

pop_pop!_v2.2.1 wrote:

Because he's not okay with the risk.

Your 401k should have a risk adverse fund that doesn't lose money. Obviously, it doesn't gain much either. Show them that.

If there's matching from the company then that barely even matters, it's no longer behavior under the realm of rational thought.

You posted something about not liking gambling. Presumably the worker thinks the 401k is gambling. They have a point, losses are not insured.

Why does it bother you so much?

Even if "investing is kind of a gamble," you can have all your 401k invested in cash, so he's turning down 5% free money per year (not to mention the tax benefits).

good luck there wrote:

Blah Blah Blah Blah wrote:

How do you know he didn't put his money into his personal IRA? Personal IRAs are a better choice than bad 401(k)s.

Gee, because 1) he said "investing is kind of a gamble" and 2) he's turning down an employer match. He's an idiot.

Every company 401(k) match I ever had had a vesting period. Perhaps he is planning to quit the company and the match hence would be of no value for him. If he is planning to quit he can not say the true reason for not participating.

There are many possibilities.

Everybody knows that good 401(k) plans are better than bad IRAs.

Donnie T wrote:

Everybody knows that good 401(k) plans are better than bad IRAs.

Everyone knows a personal IRA is better than any 401(k) plan that does not have employer matching.

Blah Blah Blah Blah wrote:

Donnie T wrote:

Everybody knows that good 401(k) plans are better than bad IRAs.

Everyone knows a personal IRA is better than any 401(k) plan that does not have employer matching.

Which is irrelevant since we've already established this one does have employer matching.

good luck there wrote:

iifii wrote:

Then what's stopping you from putting 100% of your money into the stock market?

Because they don't match 100% of your money, only 5%.

The stock market doesn't 5% of your money.

iifii wrote:

good luck there wrote:

Because they don't match 100% of your money, only 5%.

The stock market doesn't 5% of your money.

Would you like to add a verb to that sentence?

Blah Blah Blah Blah wrote:

Every company 401(k) match I ever had had a vesting period. Perhaps he is planning to quit the company and the match hence would be of no value for him. If he is planning to quit he can not say the true reason for not participating.

There are many possibilities.

This is my point.

good luck there

Would you like to add a verb to that sentence?

Doesn't *match*

iifii wrote:

good luck there

Would you like to add a verb to that sentence?

Doesn't *match*

The company matches 5% of his salary. Hence it is dumb to turn it down but there is significantly less incentive to invest beyond that 5%.

pop_pop!_v2.2.1 wrote:

Blah Blah Blah Blah wrote:

Every company 401(k) match I ever had had a vesting period. Perhaps he is planning to quit the company and the match hence would be of no value for him. If he is planning to quit he can not say the true reason for not participating.

There are many possibilities.

This is my point.

No it isn't your point, it's his point. You've said nothing like the above post.

good luck there wrote:

The company matches 5% of his salary. Hence it is dumb to turn it down but there is significantly less incentive to invest beyond that 5%.

I didn't say the company. I said the stock market.

Just because he turns it down doesn't mean it's dumb. Maybe he has other plans for that 5%.