/biz/ - Business & Finance

don't try and time the market you stupid 22 year old boomer

index funds aren't the same as 0xbitcoin - if the stock market tanks and never recovers we ALL have bigger problems then money.

just stuff as much pretax money as you can into the lowest cost index fund in there

>>9965928
You fool...if they match your contribution you are losing free money...if you expect a crash, only buy bonds. Then when crash, sell bonds buy equities...crypto fools are gonna pay rent forever

>>9965962
This. Jesus. Pick the fucking money market option you goddamn fool and take the matching. Move it to equities when p/e looks somewhat normal.

>>9965962
>>9966000
>>9965962
ahh..I see and concur my equally high IQ friends. I definitely know what this means.

>>9965962
>>9966000
Or you can be like me and minimize your contribution to 1% and put it into crypto

>>9966509
Or you can be like me and only contribute until they stop matching then buy crypto. This is the highest IQ way of doing it

>>9966543
But then you lose out on possible gains you could've made with money that could have been in crypto instead of being locked up in a 401k

>>9966575
Sure if crypto succeeds. What about if supercomputers are able to hack the SHA-256 encryption that bitcoin uses and it goes to $0? Then you have no way of retiring comfortably. If you do it my way your risk is minimized significantly.

>>9966598
>if crypto succeeds

You're on the wrong board mate

>>9965928
>refuses 401k with match
>tries to time the market
>doesn't know about dollar cost averaging

JUSTing yourself this bad

If you’re living with parents still and expenses are low, stick it all in Roth. Use a MM fund as stated before if you want absolute lowest possible risk, your plan has to offer at least one.

Or you can be smart and dollar cost average into the account like every successful long term investor ha done. Use an s&p index or some kind of total stock market equivalent.

Is contributing to your 401k to get the company match, then immediately selling your position for cash legal? Seems like free money.

>>9966652
Forgot: if you are living on your own and want to reduce current taxes then use pre-tax contributions. If you’re in the living with parents situation there is no reason you can’t conceivably do 20+%/paycheck

>>9966666
free money hack discovered by quints
it's over for non-wagecucks

>>9965928
Beginning of the mega trump bull market

F

>>9966666
You cannot do this in most cases. Unless you have a withdrawal available (unlikely if you’re under the age of 59.5) you cannot just pull money out of a 401k without valid reasons like a hardship withdrawal which are heavily reviewed.

>>9966686
And if you could you’d likely lose money due to most defined contribution plan record keepers requiring 20% withholding before even talking about an early distribution penalty.

>>9966686
From what I’ve read online it says you can make an early withdrawal, without a hardship, for a 10% fee.
>>9966698
Can you elaborate on this. Not really sure what it means.

>>9966808
It ultimately depends on what your employer allows within their plan (it is theirs after all, they typically pay most of the expense, even if you still have a small fee).

An employer CAN offer withdrawals at any point from the account. They typically don't due to the fact that it's a retirement account, not a savings account. If you take a withdrawal from a 401(k), regardless of age, most major record keepers (the company that handles your 401 for your employer) require a certain percentage be withheld up front in federal income tax that they send to the IRS for you. If you are under 59.5 there's a 99.9% chance you're going to give an additional 10% of the income received from this withdrawal to the IRS for what they deem an "early distribution." This goes back to the idea that it's for retirement not just savings, it's a punishment for not saving for retirement because the gov't wants less people on SS.

tl;dr: Do not take withdrawals from your 401(k), do not take loans from your 401(k). If you do not already have 3-6 months in savings for emergencies get that set up first and then contribute to a 401

>>9966911
So they record keeper withholds what you owe for tax, that makes sense.
For simplicity let’s say you contribute 1k to your 401k and your employer matches it so you have 2k. Let’s say your tax rate is 25%. If you don’t make a contribution you are left with 750. If you make the contribution then withdraw, you are left with 1500 minus 10% fee of 200 = 1200. Minus a small record keeping fee and you’re still in the green.

>>9967021
In your example, yes. Your example is of a matching policy so extreme that it makes the scenario acceptable.

By the way you set up your example you have implied you have contributed an entire paycheck of 1000 (your comment of being left with 750 implies this). No employer will match you up to 100% of your contributions. A more realistic number might be 3-4%, I'll be generous and say 4.

Contribute: $1000
Matching: $40
Tot: $1040
Withdraw: $1040
25% withholding: $260
You net: $780
*Most record keepers will not require you withhold the extra 10 up front for the penalty, you usually take care of this when filing, let's say you do though*
Additional 10 withheld: $104
New net after all taxes: $676

>>9967163
The idea is to only contribute what the company matches up to. If company matches up to three percent, contribute three percent of your salary. In my earlier example, the thousand would be the 3% of your salary the company matches ie $33,333 salary per year.

u cucks need to read up on Roth conversion ladders

>>9967260
Then yes the situation works, because in the end this is the exact point of matching, giving money to 1) incentivize savings and 2) claim the match as part of a broader benefits package that allows them to pay lower salaries all things considered (this is key when not all employees participate in a plan or max out matching). Not to mention matching contributions are tax deductible by the employer so if more people do participate it still benefits the company.

>>9967319
Great option. For people who already have money saved in a tax deferred account. That wasn't the topic here though.

>>9967319
Putting money into an account you can’t touch for 40 years because “muh match” makes you a cuck

>>9966575

Company match is 100% gains guaranteed you nub