NTers with 401k, how are yours doing this year?

I started my 401k in May 2008. I contribute 6%, my company matches 4.5%. I got very lucky that my company (Rohm and Haas) was acquired by Dow Chemical at avery inflated price. My stock was then transferred to Dow stock which was very undervalued and is now rising. So it has actually been a good year for me.

Brightscope lists Dow at a 77.
 
Retirement Accounts 101:
The two most common types of retirement accounts are Roth IRAs and Traditional IRAs. Both types can be opened by the individual (you) through a brokerage oropened through a commercial investment company.

Roth IRA:
You contribute post-tax dollars. Annual contributions are limited to $5,000/year. Money and earnings can be withdrawn tax free after age 59.5. Contributions(but not earnings) can be withdrawn at any time. Contributions and earnings can be withdrawn for a first time home purchase.

Traditional IRA:
Two types, 401k (most common, operated by individuals and commercial comanies) and 403b (operated by government and non-profit organizations). You contributepre-tax dollars - meaning you get a tax deduction for your contributions - and annual contributions are limited to $16,500. Money can be withdrawn at age 59.5but the earnings are taxed as regular income. Money can be borrowed from your 401k or 403b but it is taxed as regular income, you incur a 10% penalty forwithdrawing money, and the money must be repaid.

Roth vs. Traditional, hypothetical example:
You have $5,000 to invest today and when you retire your investment is worth $10,000.
With a Roth IRA, you would pay no taxes on the $10,000 withdrawl.
With a Traditional IRA, you would receive a tax deduction (not a tax credit) of $5000 today pay income tax on the full $10,000 when you withdraw it.

Personal IRAs:
You choose the brokerage and you choose how the money is directed - stocks, bonds, ETFs, mutual funds, etc. The brokerage provides no guidance and you willpay any brokerage fees.

IRAs with commercial companies:
You are provided a list of investment vehicles to choose from. The company will often provide some guidance if you desire. You will pay fees to the company(frontloads, back loads, transaction fees, maintenance fees, etc.).

Self-directed vs. IRA through commercial company:
With a self-directed IRA you make all the decisions. You pay nothing to do so. You have access to anything traded on an American stock exchange.
With a commercial company, they will provide some guidance. You pay fees for this privilege (typically 1-5%/year). You have access to the investment vehiclesthat company sells.

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If anyone would like to ask specific questions or talk further about this, shoot me a PM and I will be happy to help. I'm not in business and I'm notselling anything. It's just that I realize this isn't the easiest topic for a lot of people and I am happy to help young people who want to preparefor their own futures.
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I started my 401k in May 2008. I contribute 6%, my company matches 4.5%. I got very lucky that my company (Rohm and Haas) was acquired by Dow Chemical at a very inflated price. My stock was then transferred to Dow stock which was very undervalued and is now rising. So it has actually been a good year for me.

Brightscope lists Dow at a 77.


^curious...your 401k is linked to the market price for your company?...or do you have the ability to use other investment vehicles?
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What are people's general thoughts on contributing more than the amount that is matched?

I tend to stay away from that since I'd be better off investing it elsewhere?
 
^My company only matches 3%....wackness...but I keep my contribution at a steady 12% (15% total)
yeah...I could probably get a better return...but I prefer to have a "safety" net of the 401k

.then I can go aggressive with the Roth and Stocks.
 
I feel like you gotta be a fool to not contribute AT LEAST the percentage that your company matches. Its basically free money, assuming you stay at the joblong enough to be vested.
 
^ absolutely agreed. at a bare minimum, put in enough to get your company's total match.

i'm with dirty... i like the relative safety and ease of having a 401k... money is deducted directly from your paycheck, so you never really learn to"miss" it.
 
Eh, I'd rather have more control and deal with capital gains/losses than the rules related to 401(k)s. The limitations on the investments is the turn offfor me.

I'll probably up my contribution to 6%, but most likely no more than that.
 
Originally Posted by reigndrop

Originally Posted by Classy Freshman

Originally Posted by YoungTriz

i took a lot of my 401k out to buy my house...
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How much of a penalty did you have to pay?

I was debating on doing this. I am with T. Rowe Price by the way
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YoungTriz isn't being clear enough. Some plans, you can take money out of your 401k to pay for things, and then pay back the amount you took out on top of interest. Think of it like taking a loan out, but likely with a lower interest rate.
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ok my bad... the 1st time i took out half... that i have to pay back to myself with interest ( its a loan to yourself )... i found out i neededmore money so i took out a hardship from my loan that i dont have to pay back.. but i paid 10% taxes on it... and it maybe more when i file my taxes...

my company matches up to 4% and gives you 1% free... so we basically get dollar for dollar up to 5%... after i see how my finances are after i get my house iwill be bumping up the %.... maybe up to 10%
 
My company 50% matches, lost like 800$ last I checked, but still is above even of what it would be without their half matching. I had it on the most aggressiveone, but I'm about to take all my money out now because I'm with a new company and they don't do matching and I want it. I'll just move it intoa high interest savings account
 
the way i see it, Im only 17, Im gonna be contributing the maximum matched amount for my whole life, and not gonna dig into it to buy anything. Thats the idea,of course. I think I can stick to it pretty much, cut expenses to increase that contribution is my mindset. 401k>>spending money
 
Originally Posted by Dirtylicious

I started my 401k in May 2008. I contribute 6%, my company matches 4.5%. I got very lucky that my company (Rohm and Haas) was acquired by Dow Chemical at a very inflated price. My stock was then transferred to Dow stock which was very undervalued and is now rising. So it has actually been a good year for me.

Brightscope lists Dow at a 77.
Click to expand...
Click to expand...

^curious...your 401k is linked to the market price for your company?...or do you have the ability to use other investment vehicles?
I spoke incorrectly. Actually only about 1/6th is in Dow stock. The majority is in an investment fund. After I become fully vested in 3 years,I plan to explore other options, but for these first three years, I will leave the money as is.
 
Originally Posted by dreClark

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But the good thing is, I'm only 25, and really only 4 years into my work career.

So the losses I incur now, won't hurt me in the future.

But still.

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I hate it for the older folks who are just approaching retirement age. It's sad

And yeah, I'll def be drawing from my 401k when it comes time to buy a house.

I'm saving as well, but I'll be using my 401k bread as well.

I know this one dude, who took a LOT of bread out his 401k to cop a f'n Cayenne
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Why would you contribute to a 401K, only to use it to buy a house? It's basically like paying for a house on your credit card. Not only areyou taking a hit of 10%, but you're taxed according to your tax bracket as well (25%?). In addition to the losses incurred to the IRS, you're alsomissing out on the market jumps as well. If someone withdrew from the 401K this last March, they would have missed out on a 35% gain and their home valuewould have only decreased.
 
Am I'm stupid for not even looking at mine? I just have the money taken out and forget about it.
 
I started mine in 2007 i think and my work puts 6% of what I make into mine and they match that 6%. I haven't checked it since I started it tho.
 
year to date my personal rate of return is 26.8%...... my company matches 150% up to 4% so i contribute 4%. I have it set up for high risk/large growth for nowsince im still young and only been working for 2.5 years
 
i have one..but i have no clue how its doing
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when i started my job the 401k was part of the benefits so i just decided what percent i wanted to take out of my checks and let it be
 
my company matches up to 6% So I put in 6 and they put in 6, and i'm fully vested now after 3 years so its pretty good, i dont even pay attention to howmuch its up and down.
 
I don't but a percent, I put $20 a week and my company puts in $16 and some change plus $500 extra a year. Last statment I was at a 12.9% return, justlooked last night and it was at 5.7%.
 
I'll be eligible in about 4 months, my company will match me up to 10% and I'm very excited for that
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I just started mine last January so it's looking good. Depending on your company's plan, it may not be a good idea to start contributing until you haveyour living situation set up. You might need that money for a down payment on a house and some plans don't let you withdraw, even if it's to buy ahouse.
 
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