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  • 401K, How are CWs not doing this?

    My company just started doing a 401K . I am ecstatic. They even are paying all the fees. The only disappointment is that they will not do matching unless you have been there 5 years. I meet with the company 401K guy and got it all set up. The nice thing on this 401K is that they can pull my money out of the market if it has a downturn.

    BUT my CW complains about it, mainly the 5 years before matching (I kind of agree). But he is not investing anything yet. I think he is crazy, no beyond crazy.

    Sure your only 24, but that is the BEST time to start investing. I have been putting away a small amount for a few years and have a few thousand saved up for retirement. On every account I have had, I paid fees.

    Social Security is little better then welfare if that is all you have to live on. I want to maintain a better standard of living then that, well into my old age. Why would anyone pass up on the offer of a fee free 401K? Madness I say, MADNESS.
    I might be crazy, but I'm not Insane.

    What? You don't play with flamethrowers on the weekends? You are strange.

  • #2
    I have a ways to go before retirement and I agree with you. I wouldn't count on any social programs either, you really don't know what will change before then. No so long ago, pensions were commonplace and many industries such as manufacturing were terrific jobs with good pay, benefits and job security. Boy hasn't that changed.

    Out of curiosity, is it that you don't receive ANY matching funds for the first five years, or that you won't be fully vested for five years, which means the matching funds aren't really yours until you've been there long enough? Our company does a match from the beginning, but it takes a full seven years to vest.

    I'll be honest, it's only been the last 7-8 years that I've started getting serious about saving and I'm almost 40. It never seemed that important and I never felt like I could afford setting aside for a retirement so many years away. I started seriously saving, because of my coworkers talking about it and encouraging me to invest. So you're doing a good thing by encouraging your coworker.
    A lion however, will only devour your corpse, whereas an SC is not sated until they have destroyed your soul. (Quote per infinitemonkies)

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    • #3
      I had a teacher in high school, and his claim to fame was the catch phrase "I'm goona teach you how to make a meeeelion dolla's". And he was right. And to the best of my knowledge, none of us ever listened.

      Essentially it's all about compounding interest. If you start investing $1000 a year starting at age 18 (or it might have been 21) into a money market, or some other minimum return (eg safe) account all the way through retirement, you will have managed to save up $1 million by the time hit retirement age. And that was JUST with $1k a year. Now, the problem is, you have to start young. He had a set of slides that showed the later you start you're essentially screwed. There's limits on what you can invest through 401k's, and if you start too late in life, you'll no matter how much you try and pour into the fund you'll never hit the million dollars.

      Personally, I know my mother hits the max every year. And looking at my retirement statement I'm not even at tripple digits . The problem is we've not had a year in 17 years that didn't have some type of emergent situation. Five kids are bloody expensive, and there's just never been enough to take care of annual expenses and still invest in something. I'll be paying for that in the end, but c'est la vie.
      But the paint on me is beginning to dry
      And it's not what I wanted to be
      The weight on me
      Is Hanging on to a weary angel - Sister Hazel

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      • #4
        I only got the option to start one in October. I can't contribute more than the minimum right now, but at least it's something.
        "I am quite confident that I do exist."
        "Excuse me, I'm making perfect sense. You're just not keeping up." The Doctor

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        • #5
          I've been putting money into a 401K since I was eligible to do so.

          Beyond the whole "saving for retirement" thing, there are tax benefits to investing in a 401K.
          Knowledge is power. Power corrupts. Study hard. Be evil.

          "I never said I wasn't a horrible person."--Me, almost daily

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          • #6
            My store gives us the option, but I can't afford to put in anything. Maybe next year.
            My NaNo page

            My author blog

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            • #7
              Good on ya, Gil.

              For some unknown reason, the only thing that really stuck with my from my first finance class in HS was "FVM." The future value of money. Even at very safe investment rates, a good long curve beats the pants off almost anything else.

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              • #8
                One thing to watch for - make sure the match (when you get there) is in money and not employer stock. I once watched everyone around me lose half the value of their 401K due to our parent company going into bankrupcy. 20 years of match down the toilet for one guy.
                Life: Reality TV for deities. - dalesys

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                • #9
                  Quoth Ophbalance View Post
                  I had a teacher in high school, and his claim to fame was the catch phrase "I'm goona teach you how to make a meeeelion dolla's". And he was right. And to the best of my knowledge, none of us ever listened.
                  .
                  I had a teacher in high school do the same thing, my grade 12 math teacher. I did start investing after I finished college but hit a couple bumps and had to take from it and stop putting in. I think there's maybe $200 left in there. I should really start again.

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                  • #10
                    Quoth mhkohne View Post
                    One thing to watch for - make sure the match (when you get there) is in money and not employer stock. I once watched everyone around me lose half the value of their 401K due to our parent company going into bankrupcy. 20 years of match down the toilet for one guy.
                    Lucky for me that my employer is small enough that we do not have stock.

                    Though in some ways it would be nice since we do millions of dollars in parts. We have not had a bad year since 2008.
                    I might be crazy, but I'm not Insane.

                    What? You don't play with flamethrowers on the weekends? You are strange.

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                    • #11
                      Quoth Irving Patrick Freleigh View Post
                      I've been putting money into a 401K since I was eligible to do so.
                      Same here. As soon as I could, I started throwing money into a 401k. Granted, I can only put in the minimum, since mortgage payments take priority. But, it's better than nothing. Also, I have an IRA. That was set up some time ago. Up until 2007, I was putting in the maximum amount possible. As much as I'd like to continue doing that, paying for a house takes priority.
                      Aerodynamics are for people who can't build engines. --Enzo Ferrari

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                      • #12
                        My very first job, you had to be either 25 (I think) or have been there for a year. I almost wish they had let you start immediately, but maybe hold off on the company match, since it would ahve been so much easier to have it taken out from the get go.

                        As a result, I didn't do it for a couple of years after I was eligible, since I made next to nothing, and couldn't afford it. But had i been able to have it taken out of my very first check, I probably woud have been better off.

                        Right now I can't really afford to do much, but I do some. Sadly, any raise I get, usually goes for my rent increases. I'm hoping, as I pay some stuff off, Ican increase my contributions, since I'm closing in on 50, and for my age, don't have much saved, even though its a significant amount.

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                        • #13
                          Quoth Catwoman2965 View Post
                          My very first job, you had to be either 25 (I think) or have been there for a year. I almost wish they had let you start immediately, but maybe hold off on the company match, since it would ahve been so much easier to have it taken out from the get go.

                          As a result, I didn't do it for a couple of years after I was eligible, since I made next to nothing, and couldn't afford it. But had i been able to have it taken out of my very first check, I probably woud have been better off.

                          Right now I can't really afford to do much, but I do some. Sadly, any raise I get, usually goes for my rent increases. I'm hoping, as I pay some stuff off, Ican increase my contributions, since I'm closing in on 50, and for my age, don't have much saved, even though its a significant amount.
                          Hey, a little is better then none. It is all in the power of compounding funds.

                          A joke from "Futurama" is that Fry had 23 cents in 2000. Over a thousand years it ended up being over 2 billion dollars.

                          I after 6 years, I am just getting to the point where the income to the fund is becoming significant (It would have been sooner but 2008 really sucked, I only broke even).
                          I might be crazy, but I'm not Insane.

                          What? You don't play with flamethrowers on the weekends? You are strange.

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                          • #14
                            I know lots of people who are older than me who have been working for twenty or thirty years who have never invested in one of these. They'd rather enjoy the money now. They'll regret it come retirement time, assuming that day comes.

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                            • #15
                              I only have about 6 years of 401k savings, and I'm 55. I wish I had more.

                              First, I originally worked at companies that didn't offer it.

                              Second, when a company offered it I wasn't there long enough to qualify (some companies require that you be an employee for a certain amount of time before joining).

                              Third, I paid into one, the company closed, the money was rolled into an IRA, and then my drug addicted, abusive ex caused me to nearly empty it.

                              Fourth, I'm paying what I can into it, which isn't a lot, but my company puts in a lot. They used to have a pension plan and the 401k, but when they ended the pension plan they started contributing more to the 401k.
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