iifii wrote:
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%.
It doesn't matter what obvious statement you made, the company DOES match 5% and he's dumb for turning it down.
What's he planning on doung in retirement? After all, stuffing money under a mattress is a guaranteed loss because of inflation.
Le veritable wrote:
What's he planning on doung in retirement? After all, stuffing money under a mattress is a guaranteed loss because of inflation.
Dude is buying gold...
good luck there wrote:
iifii wrote: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%.
Vesting schedule????
iifii wrote:
Then what's stopping you from putting 100% of your money into the stock market?
Who says he is not? I have all of my retirement investments ($657,000) and 60% of my intermediate term ($112,000) savings in the stock market. My short term savings ($62,000) I have in an account that I earn 1.2% (Ally Demand Notes).
You should see the growth I have experienced in the last 10 years.
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.
Please ... it is "risk averse".
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.
Please enlighten us on how this is true when they will match their contribution 1:1 up to 5% of their salary? I would really like to know so I can make use of this strategy.
iifii wrote:
good luck thereWould you like to add a verb to that sentence?
Doesn't *match*
Maybe you should contribute when you understand what is meant by a 401k plan?
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.
I can think of only one advantage of the IRA in your example: you can contribute up to $5500 when you want to until April 15th. That is the only advantage I can think of.
The 401k on the other hand, you can contribute up to $18,000. The fact that it will be taken (in amounts specified by you) out of your paycheck could be viewed as an advantage or a drawback.
401k plans will generally pay your fees once you are over $3500. Not so with the IRA.
I have to say that the automatic-DCA feature inherent in the 401k trumps the IRA for me, but that is just my opinion.
not warren buffett wrote:
Also, he is 30 years old and our company matches up to 5% of our salaries. How could someone pass up so much free money?
Investors love using other people's money to make themselves rich. Don't hate the players, hate the game.
pop_pop!_v2.2.1 wrote:
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%.
Vesting schedule????
If the guy's issue were the vesting schedule, he would have said that, not the completely clueless "investing is kind of a gamble" comment.
I have multiple friends who are late 20s who could not even begin to explain to you what a 401k is or if it's wise to start one. The vast majority of people are idiots.
Guppy wrote:
I have multiple friends who are late 20s who could not even begin to explain to you what a 401k is or if it's wise to start one. The vast majority of people are idiots.
True.
The brilliant thing is that most people not participating in their 401ks are idiots.
And, most people that ARE participating in their 401ks are clueless, and therefore idiots.
Investing is evil. When I'm POTUS I will forbid that.
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.
I would be penalized and taxed if I tried to deposit money into an IRA. Whereas I put away $24k into a tax deferred 401(k) avoiding taxes until I'm earning much less in retirement than I am today. You be the judge as to which is good and which is bad.
To play devil's advocate here: investing IS kind of like gambling. Yes, you can select safer options but nothing is guaranteed.
Good luck there wrote:
If the guy's issue were the vesting schedule, he would have said that, not the completely clueless "investing is kind of a gamble" comment.
No, this is what you are clueless about. Saying it's kind of a gamble is not clueless at all. Some people have a different opinion on risks and rewards than you. Like I said before, he may have other plans for his 5% that are more rewarding or let riskier than investing in that work plan.
newname wrote:
iifii wrote:Doesn't *match*
Maybe you should contribute when you understand what is meant by a 401k plan?
Maybe you should contribute when you understand how to read. I never said I didn't know what is meant by a 401k plan.
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.
He's not eligble to put his money into a personal IRA - his company offers a 401K therefore, if he wants to put money into a tax deferred retirement account, it MUST be in that 401K. Unless, of course, he likes to be penalized and taxed on that money.
This is only true the money is stuffed under an air mattress. A normal mattress has no inflation.
Le veritable wrote:
What's he planning on doung in retirement? After all, stuffing money under a mattress is a guaranteed loss because of inflation.