(NOT) contributing to 401k

[cowman]

Probably worth asking, is anyone making a significant return on their 401k these days? Are many of the traditional low-risk investing methods doing very well? From what I've seen not really.... so you're really only out the tax consequences for the moment.

 

[rtk11]

Free money (matching) and Tax free earnings? You gotta do it.

This. Absolutely this. Your employer contribution is free money, so take it whenever you can.

If you're thinking of suspending your 401K contribution for a month or two, then it sounds like you only need a few hundred or a thousand bucks or so. No way to get a short term loan from family for such a small amount?

While suspending the 401K is not ideal, if you do this, you need to have the discipline to make sure you change the contribution back and not get used to spending the "new found cash."

 

[midcap]

Probably worth asking, is anyone making a significant return on their 401k these days? Are many of the traditional low-risk investing methods doing very well? From what I've seen not really.... so you're really only out the tax consequences for the moment.

You mean like investment grade bond and money market funds?

 

[hockeyrcks9901]

Probably worth asking, is anyone making a significant return on their 401k these days? Are many of the traditional low-risk investing methods doing very well? From what I've seen not really.... so you're really only out the tax consequences for the moment.

Year to date returns for me are 9.9% and it's 9% over last 5 years.

But I'm young (29) and I'm invested in very high risk funds. A mix of small cap, international, and some large cap.


I contribute 13% going to 15% next year plus the company matches 4.5% and does a 3% bonus annually to it that can go higher if we beat sales projections which we've done once in the 4 years I've been there. So in a normal year I'm hitting 20% contributions. They also have instant vestment. Overall one of the best 401k plans I've ever seen.

I've also started a Roth IRA but only doing about $2,000 a year to it right now. My goal is to maximize it by the time I'm 32.


One of the tricks I do is to split any raise I get with my retirement accounts. So if I get a 4% raise then I increase my contributions by 2%. I still get a larger paycheck and I speed up my retirement timeline.