starting a 401k

Great advice ,especially to start young.
It's no fun trying to live on $750 mo SS
Worked/stay at home mom. Now divorced with no house(had to sell), no joband a car that is rapidly wearing out. If you think it's hard when you're young, it totally sucks when you're old.
At lrast my bike and car are paid for. Cant even go on welfare, only allowed one vehicle. Not giving up my bike until I'm 85 or 90.
Y'all take care and drive safe.
Mary

 

Do some research and find a reputable investment company/financial expert in your area and talk to them. Some of the advice and opinions on here are probably spot on but you're much better off to get the information first hand. And if at all possible, whatever you do with your money try to put it in something that guarantees you will have it when it's time to retire. Do you have something like that with the 401k in the states or is that something you can lose if the company folds?

It's your money and future. Make sure you get it right.

 

Pete, the odds of you losing all your money in a 401k are very slim. The odds of you making any money by putting it in savings are very slim. You will have different levels of risk in the funds that you choose and being you are so young, I would not worry a whole lot about it. My twin brother just started saving in a 401k five or six years ago and had the same fears as you. Although his are not too aggressive he was amazed at how much he made in such a short period of time. Good luck with it all.

 

You will never have a better opportunity to invest than when you are young. There are countless 40 and 50 year olds wishing they'd started saving in their 20's.

I'm 28 and am in an ultra aggressive plan. I just upped my contribution to 6% from 5. Last year I averaged over a 10% return across my funds. I think it was closer to 15%.

 

If you can swing it , up that contribution rate up to the allowable max....you will not BELIEVE the amount of dividends it will pay by the time your are in your 50's.

 

if Tyson will let you control how your money is split up within the 401K, that gives you the most control. My 401K is with John Hancock Pensions through my company, I put $100 a week into, I also pay for a subscription to www.smart401K.com via The Mutual Fund Store. Through them you fill out a profile, take a quiz about when you want to retire, etc., and the name of your 401K provider and the list of options within that provider. They will then tell you what your best options are based on your investing goals. They charge $99/quarter for this service, they do a radio show on the weekends in some parts of the country and sometimes offer a special deal for $59/quarter for life (tax deductible as a financial advisor) and each quarter they will send you an email with advice on how to change up your account. Since mine let's me modify it, every quarter I adjust the allocation like they recommend. The current levels of the market have nothing to do with whether or not now is the time to get in. I opened my 401K originally in 2005, when the market was on it's way up, it dropped to well below what I had put in and is now working it's way back up. I also have a Roth IRA that I fund on my own and a Brokerage account that I manage on my own. I have about 21 yrs till I retire, I'm way below where I should be, so my advice is to start early and put away as much as you can safely afford without hurting yourself. If you can put $100 per pay period in a 401K do it, you'll be happier down the road.

 

my company has a mandatory 401k, 3% of every check goes in and they match it. Mines almost at 2 grand in just one year.

 

Easiest way to save for your retirement....you never really miss want you don't get..at 34 if you just put 10 to 12 % in for the next 30 years , you could retire and only use the interest on what it would pay...provide you got into the right investment vehicles.

 

I would never touch another 401k again.

It's my money and should I need it, I want access to it now. .not looking at 33% income tax AND a 10% penalty.

At 28, you are young. I commend you for investing in your future. Life happens and you will need those funds. Mutual funds can give you similar returns without the tax penalties.

There are better options than the 401k coolaid.

 

Careful. A 401(k) plan is a fabulous savings vehicle for retirement but its value and growth is directly linked to the funds you choose to invest in. Read a little about the direction of the economy on the business section of Google or Yahoo or MSN - things are not very rosy now in spite of the Dow and Nasdaq indexes reaching new highs. Unemployment is high Europe is a mess and China is slowing down all could be very bad news for stocks. Trying to "time" the market is not viable but if you wait until the Summer you'll see a marked decline in the market - it's a cycle - then you can move your retirement money into stocks right now your best bet is to put the 401 (k) money into a money market fund. Yes, it will be low interest but it will be safe until the markets pull back in the Summer.

Also, remember that the biggest benefit is that the money you put in reduces your taxable income unlike a Roth IRA. This year assuming a person could afford to do so you could put $16,500 into a 401(k) which means that if your gross income is $50,000 you would only pay taxes on $33,500. Just remember 2008! Many many people lost nearly everything in their 401s when the market crashed.