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Should I have a 401k?

My boss asked me if I want a 401k. He'll match up to 30% at the end of the year and I agreed to put 5% of my gross pay each paycheck (2x a month) into it. I make just enough to live slightly comfortably but I have trouble saving money so I thought this may be a great way to make better financial choices. I'm 24 but I figured the earlier I start the better. Is there anything I should know now before I give the "ok"?

Answer Question
 
Anonymous

Asked by Anonymous at 12:44 PM on Jan. 12, 2011 in Money & Work

Answers (10)
  • YES!!!!
    Misteh

    Answer by Misteh at 12:46 PM on Jan. 12, 2011

  • A 401(k) is a good idea. An even better idea would be to also put 2% of each paycheck in a regular saving account so you have an emergency fund. Keep in mind you really can't touch a 401(k) until you are 55 1/2 (? I think). Yes, I think there are exceptions for college and buying a house. But what do you do if your transmission goes out? You said you aren't good at a saving. So focus on that. Get out your calculator and figure what 2% of your gross pay is and every time they pay you, make a deposit. It is called paying yourself first. You will be surprised at how easy it is.

    LoveMyDog

    Answer by LoveMyDog at 12:59 PM on Jan. 12, 2011

  • Oh my gosh yes!!! You are so lucky to have a boss that will do that :o) Go for it girl :o)
    alyssamal

    Answer by alyssamal at 1:33 PM on Jan. 12, 2011

  • Put as much in as you possibly can. When employers do any matching it is a great situation!!
    elizabr

    Answer by elizabr at 1:42 PM on Jan. 12, 2011

  • Wow, 30%? YES! My company only matches 5% of our regular retirement fund and 3% of our 401(k). I'd be on that in a heartbeat.
    JessiFaye

    Answer by JessiFaye at 3:08 PM on Jan. 12, 2011

  • Do you mean 30 cents for every dollar you put in?

    Anyway yes a 401k is a good idea. I would invest up to the match. Then I would start funding a Roth IRA. Most financial advisers will recommend that you invest 10 to 15% of your income into a retirement account.

    Good job!
    Erica_Smerica

    Answer by Erica_Smerica at 3:33 PM on Jan. 12, 2011

  • Absolutely. You will never again have the opportunity to save tax free at such a young age!!
    rkoloms

    Answer by rkoloms at 4:57 PM on Jan. 12, 2011

  • ABSOLUTELY!!! Having money taken out of your check, before you get used to having it, is the easiest way to save!! :o)
    LoriKeet

    Answer by LoriKeet at 7:42 PM on Jan. 12, 2011

  • Yes, wise choice.
    jeanclaudia

    Answer by jeanclaudia at 7:44 PM on Jan. 12, 2011

  • you betcha!!Sounds great get it on paper!
    grismelda

    Answer by grismelda at 2:58 PM on Jan. 13, 2011

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