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401 k option

November 25th, 2018 at 09:34 am

so being a long weekend I started cleaning out old mail and items I need to organize. It is something I tell myself I wont let build up again but always do.
I opened some that seemed like junk mail again it was an offer for a 401k with the temp company.
I read through the proposal a few times and it seemed like it was questionable if I should sign up. it has fees that seem high and a $25 fee to rollover if I change jobs etc. I have had 401ks at other places NEVER had to pay a rollover fee.
It also has a 3 year before you are vested to collect any match but literally says some assignments have a match and some don't. so this assignment will credit 6 months and this one has a match no guarantee that next placement has a match. also need to stay with this group for the next 3 years. Not sure if I want to add that to my items when I need to chose next gig.
The whole thing seems vague but I recently have been open to considering options I would have just decided no immediately. Like looking at the road not traveled.
I asked a friend and posted on the forum but instead got a 401k sales pitch and lessons on compound interest. I know it is not personal but it is aggravating when some responses seem condescending.


Anyway I guess I will just skip this at the present time.

4 Responses to “401 k option”

  1. AnotherReader Says:

    In general, a 401(k) is a good idea even without a match, unless the fees are so outrageous that they out weigh the tax advantage. The tax deferral alone can make it worth doing. You will never get another opportunity to save a lot of long-term tax deferred money this year and next if you pass this up. If you leave this agency, you can roll the money in the plan into an IRA that is completely in your control.

    If you can fund an IRA and put money in the 401(k), you will accelerate your retirement savings significantly. The more years the money compounds, the more you have at retirement. Since you already understand compounding, this should make sense to you.

    In your shoes, I would max out the IRA and put any additional money I could afford into the 401(k).

  2. rob62521 Says:

    Is there any way you can speak to someone about this 401K? I would try to thoroughly check it out before totally declining.

    If you have a Roth IRA, you might want to fully fund it and like AnotherReader suggested, do the IRA and then consider the 401K. Even if you have to wait 3 years before money is matched, having money in retirement adds up. I opened a 403b over 30 years ago. I didn't put in a whole lot because I didn't make a whole lot. But depending on the market, the compounding interest has increased it to three times what I put in. And because of new rules, I stopped putting money into it because the company that handled that for my school district wouldn't use that company, so I had to open another 403b elsewhere. But even a small amount builds over years.

  3. Smallsteps Says:

    There is a whole page saying "jf, and or but" and plans differ for all participants. The expense and other fees as well as the page that show the 1 year 3 year and 10 year returns seem low compared to my IRA returns for the same time.
    I am not totally sold on the company that is administering the plan either.

    I doubt a person can narrow it down better since it depends on future placements and we simply do not know what that might be. Some placements have matches some don't. The only solid and clear statement in the whole offer is "the company can change these rules at any time".

    I always read about missing matches but this is not like another employment situation where the probability of staying is greater. Something is giving my the NO vibe about this but sometimes I question myself about missing something.
    I have a good amount from previous 401 plans at other jobs rolled over into my IRA and a ROTH have never had to pay a FEE for the rollover.

  4. AnotherReader Says:

    Why don't you just assume this is a 401(k) with no match? Look at the offerings and the fees under that assumption. If it will benefit you, then invest. Any match will be gravy.

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