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Author Topic: 401k plans  (Read 1885 times)

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Offline Pyraxis

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401k plans
« on: January 05, 2009, 07:40:58 PM »
Anyone know anything about them? For the first time in my life I have the option of enrolling in one. I don't trust the government further than I can throw it when it comes to money; I plan to save enough privately to cover my own retirement.

But I know 401k plans are popular and standard, though I know very little about how they actually work or what benefits they'd give me. I may be being too paranoid and it would actually be a good investment.

I also don't know, if I did enroll, whether a regular plan or a Roth plan would be a better idea.

Can anyone from the USA give me advice?
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Offline Christopher McCandless

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Re: 401k plans
« Reply #1 on: January 05, 2009, 07:51:58 PM »

Offline Pyraxis

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Re: 401k plans
« Reply #2 on: January 05, 2009, 07:55:34 PM »
Um, Hadron, if I wanted to read webpages I would have googled it. Please think before responding.

I have, actually, googled it and read some official literature. But I can get more valuable information from talking to people I actually know.
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Offline Christopher McCandless

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Re: 401k plans
« Reply #3 on: January 05, 2009, 07:59:24 PM »
Um, Hadron, if I wanted to read webpages I would have googled it. Please think before responding.

I have, actually, googled it and read some official literature. But I can get more valuable information from talking to people I actually know.
Unless they are investment experts, which AFAIK no one on here is, then you would be really foolish to seek investment advice here. Not quite as smart as you think you are.

Offline Pyraxis

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Re: 401k plans
« Reply #4 on: January 05, 2009, 08:12:04 PM »
Why? There are several people here who do well for themselves financially. Technically there's even the chance that McJagger would show up and throw in his two cents, and he's very well off.

Also, in a case like this I am much better at filtering information through what I know of people's personalities than by reading webpages or official pamphlets written by people I don't know. Companies who write guides will be serving their own self-interest, whether they are investment firms, private consultants, etc. Webpages of unknown origin could have been written by people with less financial knowhow than those here. Not to mention, people's advice doesn't have to be good to be helpful. If an idiot earnestly tells me to do something, I now know what not to do.

At any rate, I can't think of any reasons for you to be casting aspersions on my intelligence unless you are hypersensitive about your own lack.
You'll never self-actualize the subconscious canopy of stardust with that attitude.

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Re: 401k plans
« Reply #5 on: January 05, 2009, 08:16:43 PM »
What is 401k plans?  ???

Offline Pyraxis

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Re: 401k plans
« Reply #6 on: January 05, 2009, 08:19:28 PM »
It's a type of retirement account in the USA, where you can choose to have a portion of your salary deposited, and the company you work for may match a percentage of what you contribute.
You'll never self-actualize the subconscious canopy of stardust with that attitude.

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Re: 401k plans
« Reply #7 on: January 05, 2009, 08:25:06 PM »
It's a type of retirement account in the USA, where you can choose to have a portion of your salary deposited, and the company you work for may match a percentage of what you contribute.

In Sweden the state made all that for us before. Now we pay the same taxes but have to save in retirement funds as well if we want a good life when we get old.  :grrr:

Offline Christopher McCandless

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Re: 401k plans
« Reply #8 on: January 05, 2009, 08:27:09 PM »
Why? There are several people here who do well for themselves financially. Technically there's even the chance that McJagger would show up and throw in his two cents, and he's very well off.
Earning a large salary does not make someone have a clue about the ins and outs of investment options. I know some well off people who are not investment experts, including within my own family. When they need to invest something they (a) talk to an expert on the matter and (b) know the stock market is little more than gambling. The only way they can help you, not being investment experts themselves is give you insider tips on their company and even then I really would not rely on them.
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Also, in a case like this I am much better at filtering information through what I know of people's personalities than by reading webpages or official pamphlets written by people I don't know. Companies who write guides will be serving their own self-interest, whether they are investment firms, private consultants, etc. Webpages of unknown origin could have been written by people with less financial knowhow than those here. Not to mention, people's advice doesn't have to be good to be helpful. If an idiot earnestly tells me to do something, I now know what not to do.
I know that in the UK, financial products are required to have a factlist accompanying them, so anyone who understands financial markets cannot get ripped off too easily - and they know what they are buying. You certainly should be able to drag out the facts from any company literature. As for the webpage I linked, it only contains the very basics and no real advice - which is why I linked it.

Though before you invest in a 401(k) - you might want to read a little into Enron and co to see what can happen if you invest in stocks.
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At any rate, I can't think of any reasons for you to be casting aspersions on my intelligence unless you are hypersensitive about your own lack.
Be a prat if you like - its your money you burn if you get it wrong.

Offline Christopher McCandless

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Re: 401k plans
« Reply #9 on: January 05, 2009, 08:29:35 PM »
It's a type of retirement account in the USA, where you can choose to have a portion of your salary deposited, and the company you work for may match a percentage of what you contribute.

In Sweden the state made all that for us before. Now we pay the same taxes but have to save in retirement funds as well if we want a good life when we get old.  :grrr:
To be fair anything other than a basic state pension is totally unsustainable these days, the older systems rely on the next generation having enough children to ensure a certain population expansion rate. You should see the current mess in Japan, its partly why the UK and Sweden are both allowing mass immigration.

Offline Christopher McCandless

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Re: 401k plans
« Reply #10 on: January 05, 2009, 08:31:03 PM »
It's a type of retirement account in the USA, where you can choose to have a portion of your salary deposited, and the company you work for may match a percentage of what you contribute.
Its really about tax avoidance, above anything else.

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Re: 401k plans
« Reply #11 on: January 05, 2009, 08:33:48 PM »
It's a type of retirement account in the USA, where you can choose to have a portion of your salary deposited, and the company you work for may match a percentage of what you contribute.

In Sweden the state made all that for us before. Now we pay the same taxes but have to save in retirement funds as well if we want a good life when we get old.  :grrr:
To be fair anything other than a basic state pension is totally unsustainable these days, the older systems rely on the next generation having enough children to ensure a certain population expansion rate. You should see the current mess in Japan, its partly why the UK and Sweden are both allowing mass immigration.

The thing is that one thing that people payed through their taxes until 1997 something, was their retirement. My parents have, so to speak, made a deposit from which they will never get more than 60% back.

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Re: 401k plans
« Reply #12 on: January 05, 2009, 08:40:54 PM »
Well they can be good now with the market going down not so much.  Things to consider how much does your employer match,  you can only get it out at 65 without penalty, how stable is the company.   I have had them in the past and they are transferable company to company.  You can also transfer it to an IRA.  The returns are based on the investments you make usually they give you several options with different risks best to spread them out.   I worry that the government is going to do a big money grab when SSI goes under.  My 401k was turned into an IRA and since the market went down I have lost 33% and have not put anymore in it.  I am looking into alternative investments coins, metals physicals things I can touch till the market comes back
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Offline Pyraxis

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Re: 401k plans
« Reply #13 on: January 05, 2009, 08:41:17 PM »
Earning a large salary does not make someone have a clue about the ins and outs of investment options.
Oh, very much agreed. I've seen several really sad cases of people making six-figure incomes and then losing most of it because they never learned how to handle money. But I wasn't talking only about large salaries. Really, I don't know what anyone on here is making except McJ, who's brought it up. I was also basing the conjecture on people who own houses, people who travel a lot, etc.

I know that in the UK, financial products are required to have a factlist accompanying them, so anyone who understands financial markets cannot get ripped off too easily - and they know what they are buying. You certainly should be able to drag out the facts from any company literature.
I don't know about "should" - most of the terminology is new to me and so are the common pitfalls.

So many of the pitfalls also have to do with people making poor decisions based on emotion. The way my mind works, I meet emotion with emotion and logic with logic - so if I also want to avoid emotional pitfalls, it's helpful to have emotional conversations with real people about the subject. Telling myself that a regular 401k would earn me xxxx vs a Roth's yyyy because I read it on Schwab's site won't help me with decisions that would have a far greater impact, like whether to trust the stock market at all or just hide everything in a box in the back yard.  :P Or what percentage of my salary to save.

As for the webpage I linked, it only contains the very basics and no real advice - which is why I linked it.
You linked it because it offered no real advice?  ???
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Offline Pyraxis

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Re: 401k plans
« Reply #14 on: January 05, 2009, 08:47:43 PM »
I worry that the government is going to do a big money grab when SSI goes under.
Yes, that's exactly the kind of thing I'm also worried about. If I don't take the common route, I may be able to avoid that.

I am looking into alternative investments coins, metals physicals things I can touch till the market comes back
I've thought about gold but I'm not very good with trusting physical objects any more I am with trusting the goverment, and then I'd have to carry it around when I travel and worry about it getting stolen.
You'll never self-actualize the subconscious canopy of stardust with that attitude.