401k

232/share now, great move and hold friend!

 

6 to get 3 free when we were there.

 

Yeah that sounds right. The employee contributes whatever amount they decide, I was up to 13% contribution at Averitt Express. But ODFL, in tis case if the employee contributes up to 6% of their gross wages, then ODFL will contribute another 3% of wages to the account. It really is free money or guranteed rate of return for your investment.

 

Always invest first where there is a match as that is free money which will likely be your company sponsored 401k. Generally financial advisors recommend investing in 3 or 4 mutual funds with very long track records. 10-20 years or more track records. Once you max out your 401K then start investing also in an IRA. There is no advantage to doing an IRA instead of a 401k unless the investing options in the 401k are not good choices. At your age if you invest as much as you can afford now and then put half of every raise you get in the future you should be maxed out in a few years. I assume you will stay at OD and eventually be making in excess of $100,000 a year and should be able to easily do this. Live on less than you earn now and eventually life be be very easy for you financially. I recommend you do the Roth option as the taxes you pay now will be far less than the taxes you would pay later on the growth of a traditional 401k or IRA. I started investing less than $50 a week in 1985 and was maxing out my available options in just a few years. A blue collar worker can live a very good life if he/she saves properly most of their working life.

 

If you change employers your employer will allow you to leave your 401k with them, even though they will stop contributing their matching contribution. However, you MAY be required to move your 401k before 1 year after you leave OR you may be required to move your 401k account before Dec 31 of the year after the year you leave. Some companies will mail you a check for your 401k amount (minus 20% withheld for taxes). If you change employers the best thing to do is open a Traditional IRA with a company like Vanguard or Fideltiy and have them contact your employer and initiate a rollover or trustee-to-trustee transfer of your 401k to your new Traditional IRA. There will be no income tax due if you do this.

If you do get a check from your employer after you change jobs for your 401k account, it will have 20% withheld for taxes. You have 90 days of the date on the check to rollover the 100% of your 401k amount into your Traditional IRA. That means you will have to deposit the full amount of the check from ODFL plus you will have to deposit from your own funds the 20% that was withheld to pay taxes. This is why it is better to give ODFL notice when/if you ever change empoyers you want your 401k account transferred to your Traditional IRA. If you don't deposit the full amount of your 401k, not just the check amount but the check amount plus the 20% they withheld, you will be charged income tax on amount.

 

Light years smarter of a move that expecting a Teamster pension in 15+ years too...

 

What are the specific investment options in the 401k? Hint: most of your fellow employees won't know.

Some companies let you have a self directed option that allows you to buy your own stocks.

 

Get in now while you're new and young, start with the minimum if you're uncomfortable or not sure, you can always up your contribution. If you start now you'll never miss it. When you get a raise or a bonus put it towards anything that builds your retirement.

Wish I'd have been knowledgeable, or cared, about retirement when I first started working then I wouldn't have to wonder how much longer I need to work now to be comfortable.

 

You are 21 please get that 401k especially since there’s a company match if I were in youre shoes I’d max it out, most you can put in is 19.5k per year… you do not have to hit that but the closer the better…. It lowers your taxable income… if you aren’t a big spender and good with budgeting, it’s pretax money you won’t miss… it’ll stop you from making terrible decisions with your finances that you’d make if you just have money lying around. For example I know a guy that just got a house around 300k with a 2700$ note!!!!!! Got the house cause he could make the payments and houses are flying…when you do some math 2700x360mos(30years) = a whole lot of math that ain’t mathing or that will be mathing to the bank… you put in 10 strong years and I guarantee you you’ll be looking forward to growing it even more

 

THIS!

Think of it this way: You are paid X for your services. The match is basically paying you X(Y%), totaling X + X(Y%) for your compensation. By not investing in the 401(k) to the maximum contribution match, you are throwing away money.

I wish I had something like that when I was 21. My current employer gives a 50% match on the first 5% invested, so I invested 5%. That means my annual compensation if my salary PLUS an additional 2.5%. Had I been able to do that for the past 24 years (instead of 3 years), I would have a massive amount of money tied up in it.

I did have something similar, the Thrift Savings Plan (TSP) came available halfway through my Army career. I invested lightly, as there was no matching funds to be had, so I put in about $17k over the course of about 10 years. Last time I looked at the annual statement, it was over $50k sitting there.

The market's historical average is 8-10%. Withdraw high when retired, and remember that you only put in a fraction of those funds, the rest were yields, dividends, and your employer's contributions.