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Do you contribute to a 401k? If so, why?

likehelpful
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Yes because I’m in my mid 20’s and what I put into my Roth 401k now will have 40 years of interest to accrue. I personally choose to max out my Roth 401k to the annual limit of 19k and put another 6k into my Roth IRA. Some people may find this crazy because I don’t have liquidity to buy a home using my retirement funds. Which is a fair point, but I’m frugal with my money and have enough savings for a down payment now if I wanted to. I just prefer to rent an apartment now due to the ongoing economic conditions.

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Key is living in an apartment below market to make the math work. Yes, if I lived in the level of quality I would buy (newer, 2bd/2ba) it wouldn’t work, but I live in an old 1bd and invest the difference.

Max out your contributions every year. I’ve weathered 2 market crashes and am still way ahead. It’s worth noting that not all 401ks are created equal as some companies available funds aren’t all that great.

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Yes. 20% pre tax. 20% post tax.

Because compound interest and tax advantaged accounts are a hell of a drug.

likefunnyhelpful

Or “in plan rollovers/conversions”

No; if society doesn’t collapse in the short term, climate change will kill us all. I bought a sailboat.

likefunnyupliftingsmart

C3, what kind and what length are you looking for? I do some of my project work remotr from my boat. Love it. Been around sailboats for a long time.

Yes. I don’t want to work when I’m 70. Duh?

likefunnysmart

It reduces my chances of having to work forever

likesmart

It’s literally free money. The company match is absolutely the number one reason to use your 401K.

My company (no longer at Deloitte) matches up to 6% of my salary, which is about $12K year in free money.

likehelpfulfunny

A3 - work hard and create value for others.

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No, tackling student loans and saving for a house first

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EY2.... I think you are executing your plan aggressively. That’s the most important thing. I have a different strategy but same execution. And I expect you’re going to realize your as I have. (I’m no longer in my 20s, ok no longer in my 30s. Well not in my 40s anymore either.)

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Gotta at least get the free company match, unless you can’t afford it

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Bc i want my unrealized investment income to be higher than employment income

likesmart

To dollar cost average and build my wealth. You can get a home with as low as 3% no PMI.

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I had already chatted with that particular company, a coincidence.

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Bc I can afford it

likesmart

How does it help save you for retirement? What if you need to money to put it towards a down payment on a house or if you die, you don’t really get to touch any of that and it just goes to your beneficiary. What about when the market becomes unstable. Is it really worth the risk of contributing?

funnylike

You can withdraw money (or take it as a loan) from a 401K for a house down payment.

And real estate and the wealth built in home ownership is very real, I have 5X over 20 years on our house, that is real money

I Contribute 4% which is how much my company matches. I was able to cash out my 401k this year for the last 10 years and officially pocketed that money. Half of it wasn’t mine, it’s what my company matched.

I’m gonna be dead before 40, and if I don’t take that money now, some ungrateful long lost cousin is just going to inherit it. Or the government. Don’t want either.

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STA1 - enjoy every moment of your life, do something That helps someone and yourself too in the process. It’s the amount of quality time we have that matters anyway. Wish you all the best!

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No, because I am planning to retire in my home country 🤷🏻‍♀️

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So am I but your money still grows...

Match = more money

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Max out the 401k, 529 limits, ira, whole life, company equity, and a sizeable chunk into individual portfolio.

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No age limit, and you can roll the funds to any family member, defined as...

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Yes, because it offers tax advantages for savings

likefunny

Look into an IUL policy...and get someone who knows how to use it as a tax free way to finance retirement. I can refer someone if you want. Just DM me

Yes, I max out. Decrease my tax liability... and can do a 72T before I'm old, and not have to pay the 10% penalty. Google it. I dare you.

likeuplifting

Ahhh... young padawan you didn't Google it. It's an early distribution before you hit 59.5. You have to take the same amount every year, for at least five years or until you turn 59.5, which ever is longer. Penalty free... there are plenty of calculators out there. No age minimum

like

What does Roth mean? Is the 401k through my company a Roth 401k? Once I max 19k on my Roth 401k, do I just start contributing to a regular 401k?

likehelpful

If you think you’ll pay lower taxes now vs retirement, contribute to the Roth. If you think the opposite is true, contribute to the traditional 401k.

If you’re not sure / don’t want to think about, just pick one or contribute half your limit to each

I do a regular 401k .... contribute 15%. Because I don’t want to be 65 still working.

likesmart

FIRE = Financially Independent Retire Early

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