starting a 401k

exactly right, I don't even remember that I have it usually. I am considering bumping it up in the near future.

 

By most objective measures, the s&p is on the higher-priced side of normal, but like you said, timing markets is an excercise in futility. The market was overpriced in 1998 -- it still went up for the next 2 years...

But even when overpriced, the returns were almost always over 2% & usually over 4% -- provided you (or your fund manager) didn't participate in the panicked selling: http://www.multpl.com/s-p-500-earnings-yield

BTW there are roth 401 options out there that may be attractive for those whose tax rate is lower now than they anticipate it will be in retirement (trucking probably fits that bill with per diem, especially for those claiming dependents)

 

Well , the only thing I'm know is , I was invested in one for a long, long time, and when I retired I had enough built up to live off the interest income from it.... My entire SS check is deposited in a separate account and has not been touched ..yet. Like anything else oppinions vary...

 

If You left your money in a 401 in 2008 you would have gained everything back and then some by 2013. In 2008/07 it would have been a loss only on paper. It is only a loss if you cash out into your core account. Now if you were retiring in 2008 that would stink for you. However, if you were retiring you would have hopefully already moved your cash into a safer fund and still only take out what you need to live on. Or wait out retirement until your 401 came back, 08 to 13 was 5 YEARS!. In the history of the Market this was a long rebound and will surly tank again at sometime in the future the key is to wait it out and not time the market in terms of month to month or day to day, I myself do a four month evaluation and correction.

 

I'm repeating what the smarter posters said, but it's worth repeating.

Contribute what you have to, to maximize the match your company will make. You may not want to contribute more than that, but you can always do some investments outside of your company 401k.

Some 401ks will offer a 'roth' option. Take that. The money is taxable now, but you will pay no taxes on the money later. You can also use money in a Roth toward a 'first time' home purchase. (some restrictions, you need to do some homework)

Learning the basics of investing in stocks and mutual funds is pretty easy. You'll want to know enough to be able to evaluate the various funds in the company 401k, and preferably distribute your inflow of money into a variety of different funds. If you don't want to put that much effort into it, you can just try an 'index' or 'retirement target' fund.


USAA (if you are a veteran) also has mutual funds. I do enough at my work 401k to get the match they offer, then make some additional deposits into my Roth 401k at USAA.

The people who get freaked out when the market burps, are the ones who will lose money. Pick solid funds, and ride it out. You will always be ahead.

Start with your company 401k. Make a contribution than gets you the highest match your company will contribute, research the funds they offer, and let it ride. It's still possible to make a decent return with carefully selected mutual funds, but you need to understand the type of fund, goals, expenses, how to read the data on the funds.

 

Account person?

Financial advisor?

Scam artist?

Gold took a big nose dive a couple days ago. The stock market dropped 250 pts in one day. Not a good time to start investing.

 

"Be Fearful When Others Are Greedy and Greedy When Others Are Fearful" -- Warren Buffett

 

Financial advisor.

 

CERTIFIED financial advisor/planner ..