One benefit is you deffer your salary, which means your taxable income will go down every dollar you put in. The total 401(k) limit for 2014 is $17,500 per year so anything you put away $17,500 and under in your 401(k) you will save in taxes.
They match AFTER you have already put in 4%? I've heard of matching up to that amount, but not AFTER. Correct me if I read that wrong.
I haven't heard of jobs matching AFTER the 4%, but if so, this is an excellent deal. 401k builds on itself as it is usually invested into "safe" stocks. The earlier you start investing into it, the better. 401k is tax deductible, so lets say hypothetically you make 50k, and you put 15k into your 401k. Instead of making 50k, it will show that you're making 35k (50k-15k put into the 401k), this considerably lowers your tax burden, and makes you eligible for several tax/financial incentives. For someone in the 25 percent tax bracket, contributing the maximum will save you $4,375 in federal income taxes. The gov't is rewarding you for investing/saving. However, it is hard to access that money until retirement (there are several rules, depending on company policy).
if true, that is redic...wish i could get in on that...my current job matches half, not the best, but better than nothing...
Not to put a damper on things, but you've already cost yourself a couple hundred thousand in gains by not contributing anything. If I were in that position, I would live on nothing for the next year or two and throw as much into retirement as possible (assuming you already have an emergency fund). Listen to what @wsdesigner14 said. Some solid advice right there. Preferably with a mix of at least 4 different types of funds so you're well diversified across asset types (dividend, large cap, small cap, international).
Thanks
FYI... before you just max it out, I would contribute up to the match, then start maxing out my Roth IRA, then go back to the 401K after that's maxed out. The reason being is that typically a 401k plan doesn't have as much choice and the fees can be higher. Plus, with a Roth IRA, your contributions are already taxed, so the the growth from the funds will be tax free. Not to mention once you leave your job, you won't have to worry about transferring the funds to a new account (which can get you if you don't do it right).
