Need some 401k advice

Rating - 100%
7   0   0
Joined
Sep 15, 2008
Messages
9,736
Likes
2,655
So roughly the beginning of last year my company automatically enrolled me into a 401k plan and I never really noticed the 34 bucks coming out of my check biweekly. I know, I know, how can I not notice that. So I get a document from TransAmerica who apparently handles our 401k and it shows that I have roughly 800 bucks in the account with no company matching and it earned something like 5 or 6 bucks over the last year.

I have a few questions here.

- How is it my company can legal enroll me in a 401k without having me sign anything and/or have me fill out beneficiary paperwork

- Is it even worth having considering I have no company matching and it's $800 a year? After 30 years I should end up with a whopping 24k plus interest....nothing to write home about.

- If I decided I wanted to opt out and take my money elsewhere, am I basically screwed and lose that $800?

Personally for me I don't like 401k's. Perhaps it is just because am uneducated on them, but for me I like having tangible goods or investments. I would rather tak that 34 bucks every two weeks and buy silver coin. I don't know if that would be the wisest investment, but if things crash, I still have my silver.

Info that may be of interest or need

-I'm 32, have no prior 401k
-been with the company for 4 years
-only one years worth of 401k
-supposedly I don't get matching for two more years
 
Last edited:

PennyPincher

NES Member
Rating - 100%
12   0   0
Joined
Aug 27, 2007
Messages
13,491
Likes
6,825
Location
Texas
You can opt out if you want to. You wont be able to pull that $800 out until you leave the company and then you would pay a penalty unless you did a direct rollover to another retirement plan.
 
Rating - 100%
11   0   0
Joined
Apr 12, 2007
Messages
21,207
Likes
9,899
I don't think it is worth it if you don't have matching.

The mere 5 or 6 bucks is probably because you chose (or automatically was chosen) a fund that doesn't have hardly any risk, like a money market or something. I'm sure you have other stock and bond based funds available.
 
Rating - 100%
7   0   0
Joined
Sep 15, 2008
Messages
9,736
Likes
2,655
You can opt out if you want to. You wont be able to pull that $800 out until you leave the company and then you would pay a penalty unless you did a direct rollover to another retirement plan.
That's one of the things I was afraid of. This is what I don't like about a 401k. I basically forfeit my right to MY money. I agree that it helps you be more responsible about saving, but that aspect just rubs me the wrong way.

- - - Updated - - -

I don't think it is worth it if you don't have matching.

The mere 5 or 6 bucks is probably because you chose (or automatically was chosen) a fund that doesn't have hardly any risk, like a money market or something. I'm sure you have other stock and bond based funds available.
I have no idea. I know nothing about investing and the two people I talked to whom I thought were in charge of it basically said they have no idea but can give me the number to call. So wait, you don't know anything about it, but you ****ing enrolled me in it without my permission? Thanks....dick.
 
Rating - 100%
11   0   0
Joined
Apr 12, 2007
Messages
21,207
Likes
9,899
That's one of the things I was afraid of. This is what I don't like about a 401k. I basically forfeit my right to MY money. I agree that it helps you be more responsible about saving, but that aspect just rubs me the wrong way.

- - - Updated - - -



I have no idea. I know nothing about investing and the two people I talked to whom I thought were in charge of it basically said they have no idea but can give me the number to call. So wait, you don't know anything about it, but you ****ing enrolled me in it without my permission? Thanks....dick.
I wouldn't try to actually withdraw it... you'll be hit with taxes plus 10% penalty, so that may reduce the $800 by 40% or more. You can always cancel contributing to it. If you have no other money saved up, worry about that first. I find it amusing people who have tons of money in a 401k but are living paycheck to paycheck. You can't get it out too easily if you suddenly need it.

Oh, and the people where you work not knowing about the 401k? That's normal... they know nothing about how to invest. All they know how to do is sign you up to the plan and point you at the web site.
 

M1911

Moderator
NES Member
Rating - 100%
27   0   0
Joined
Apr 1, 2005
Messages
39,571
Likes
7,779
Location
Near Framingham
Dude, at age 32 you should be maxing out your 401k contribution. Your investment compounds tax free -- as your investment grows, the IRS doesn't take money out of it. Whether your company matches or not, 401ks are a super great deal.

Your 401k plan undoubtedly allows for multiple different investment options. Take a look at your plan. Chances are they have an S&P 500 index fund. Transfer your investment into that.

For the vast majority of people, your only hope of retiring is to max out your 401k.
 
Rating - 100%
7   0   0
Joined
Sep 15, 2008
Messages
9,736
Likes
2,655
Dude, at age 32 you should be maxing out your 401k contribution. Your investment compounds tax free -- as your investment grows, the IRS doesn't take money out of it. Whether your company matches or not, 401ks are a super great deal.

Your 401k plan undoubtedly allows for multiple different investment options. Take a look at your plan. Chances are they have an S&P 500 index fund. Transfer your investment into that.

For the vast majority of people, your only hope of retiring is to max out your 401k.
What about the idea of investing it in tangible goods such as gold or silver coin.

as for not having a 401k, for the last 12 years of my adult life I have needed every extra penny to pay for things like food, heat, and fixing up my old ass house. Retirement has been the least of my concerns.
 

Beansie

NES Member
Rating - 100%
4   0   0
Joined
Jul 23, 2014
Messages
1,319
Likes
231
Dude, at age 32 you should be maxing out your 401k contribution. Your investment compounds tax free -- as your investment grows, the IRS doesn't take money out of it. Whether your company matches or not, 401ks are a super great deal.

Your 401k plan undoubtedly allows for multiple different investment options. Take a look at your plan. Chances are they have an S&P 500 index fund. Transfer your investment into that.

For the vast majority of people, your only hope of retiring is to max out your 401k.
This is by far the best advice for 90+% of working people in America.
 

Beansie

NES Member
Rating - 100%
4   0   0
Joined
Jul 23, 2014
Messages
1,319
Likes
231
You can opt out if you want to. You wont be able to pull that $800 out until you leave the company and then you would pay a penalty unless you did a direct rollover to another retirement plan.
You can take it out if you still work there, that isn't an issue.

The issue is you pay income tax rates on the lump sum, plus the 10% penalty. But no, they don't confiscate your money.

The auto enroll is a bit suspect tho.
 

chopper_man

Army Veteran
NES Member
Rating - 100%
29   0   0
Joined
Mar 23, 2012
Messages
1,579
Likes
376
Location
Milford, MA
+1 on what M1911 added. You really need to be maxing it out (if possible). You could also look in to Roth IRA's which give you a bit more flexibility. They go in post tax. You can withdraw for multiple reasons, ie first time house buying, school, kids school, your mileage may vary. You really need to be investing in something at this point in your life (not saying you are not) as this builds the full foundation for your retirement. I wish I knew 30 years ago what I know now.
 

Beansie

NES Member
Rating - 100%
4   0   0
Joined
Jul 23, 2014
Messages
1,319
Likes
231
By the time he can pull money out I bet the .gov takes 50% of it. Because 17 trillion in the hole is nothing.
That might be the straw the breaks the camels back... I don't see that ending without some bloodshed for .gov.

That crosses a line, lol.
 
Rating - 100%
7   0   0
Joined
Sep 15, 2008
Messages
9,736
Likes
2,655
+1 on what M1911 added. You really need to be maxing it out (if possible). You could also look in to Roth IRA's which give you a bit more flexibility. They go in post tax. You can withdraw for multiple reasons, ie first time house buying, school, kids school, your mileage may vary. You really need to be investing in something at this point in your life (not saying you are not) as this builds the full foundation for your retirement. I wish I knew 30 years ago what I know now.
I have my money "invested" if you will in goods and items that have historically held value and are easily movable. I could likely have 25-30k in cash within a week if needed.
 

dbott63

NES Member
Rating - 100%
10   0   0
Joined
Dec 31, 2010
Messages
1,108
Likes
202
Location
NH
No matching sucks but as M1911 said it shelters that money from taxes. You may also have access to some pretty good funds. I completely get the "lack of access" concern but you unless you have other retirement savings in place you should think long and hard about putting money into the 401k. If you don't force yourself to do it now you'll blink and be 40 without much set aside. Silver isn't a bad idea but, if your concern is accessibility, you would have lost 7.5% on you silver investment from 1 year ago. It's down 7.53% YoY as of today. If you go back two or three years it's even worse. It's basically back where it was 5 years ago. So Silver is down and it's a good time to buy but if you put all your eggs in that basket back in 2011 and needed access to the money now you'd take a beating.
 

GM-GUY

NES Member
Rating - 100%
5   0   0
Joined
May 27, 2008
Messages
10,413
Likes
6,929
Location
North Central Mass
Just throwing this in:

401k & IRA's are 'Tax Free' when withdrawn . . . . . . . . . . . just like the 529 plans, you know the ones 0bama wants to tax to give free college away.

If you haven't noticed - just let it go and continue but fix your allocations to get better return.
 

ASHDUMP

NES Member
Rating - 100%
6   0   0
Joined
Aug 1, 2009
Messages
5,307
Likes
1,728
Location
Massashootin'
Go hang out in the economic doom mega thread... You'd run far far away from 401k's.

What kills me is that this entire economy is propped up on lies and fake currency. Every single 40 1k out there is fake currency. Just a matter of time before the rug is pulled out from under the hard working people of America .
 

dbott63

NES Member
Rating - 100%
10   0   0
Joined
Dec 31, 2010
Messages
1,108
Likes
202
Location
NH
Go hang out in the economic doom mega thread... You'd run far far away from 401k's.

What kills me is that this entire economy is propped up on lies and fake currency. Every single 40 1k out there is fake currency. Just a matter of time before the rug is pulled out from under the hard working people of America .
So because of a gun forum thread he shouldn't invest in his 401k? Every single financial account everywhere in USD is fake currency and has been for decades...not just 401k's. I'm not saying a 401k is the end-all-be-all but it's a good option. Diversifying your investments is always smart.
 

dhuze

NES Member
Rating - 100%
8   0   0
Joined
Mar 26, 2006
Messages
9,116
Likes
3,024
Location
An island surrounded by land on three sides
Dude, at age 32 you should be maxing out your 401k contribution. Your investment compounds tax free -- as your investment grows, the IRS doesn't take money out of it. Whether your company matches or not, 401ks are a super great deal.

Your 401k plan undoubtedly allows for multiple different investment options. Take a look at your plan. Chances are they have an S&P 500 index fund. Transfer your investment into that.

For the vast majority of people, your only hope of retiring is to max out your 401k.
This! You really should be putting 15% into a retirement account. You would really miss $17 a week? The money for your 401K is pre tax so your check would probably only go up maybe $12. ( every $100 pre tax that goes into my retirement is $60 from my check)This money should grow about 10% or better and over the next 23 or so years you have until retirement will add up significantly.

What about the idea of investing it in tangible goods such as gold or silver coin.

as for not having a 401k, for the last 12 years of my adult life I have needed every extra penny to pay for things like food, heat, and fixing up my old ass house. Retirement has been the least of my concerns.

Gold and silver, if you haven't noticed, has taken a HUGE hit in the last couple years. A few years ago it was around $2200 an ounce. Today it is $1300.60. Silver was around $35 at that time and it is now $18.39.

Retirement at your age should be a primary concern so you can live comfortably when you retire. Even if somehow Social Security survives you, the amount you will be getting will be poverty level 23 years from now. If I got my retirement now I couldn't survive on it.
 
Rating - 0%
0   0   0
Joined
Jan 22, 2012
Messages
220
Likes
37
Location
Allston
Ok, here is some background for you on what happened. People don't save for retirement...so we know people will become more and more dependent on social security in the future. Not a good thing. So the Department of Labor (DOL) passed a ruling giving plan sponsors a 'safe harbor' for 401(k) plans where they can automatically enroll you in the 401(k) at a certain % of your income. This has to go into a Qualified Default Investment Alternative (QDIA) and those are generally target date or target risk types of investment - generally something thought to be moderately conservative.

401(k)'s are tax deferred, meaning your contribution comes out of your salary before that money is taxed. But you will need to pay taxes on it when you take the money out, unless this is a Roth 401(k) which is a very different situation. The benefit of pre-tax contributions (regardless of matching) is it will lower your gross income amount used to determine your tax rate for the year. Because of this tax treatment, the IRS puts a 'penalty' of this money if you remove it before retirement age, but does allow for certain conditions you can withdraw it without the penalty. Just an FYI and not any advice on what you should do.
 
Rating - 100%
7   0   0
Joined
Sep 15, 2008
Messages
9,736
Likes
2,655
This! You really should be putting 15% into a retirement account. You would really miss $17 a week? The money for your 401K is pre tax so your check would probably only go up maybe $12. ( every $100 pre tax that goes into my retirement is $60 from my check)This money should grow about 10% or better and over the next 23 or so years you have until retirement will add up significantly.




Gold and silver, if you haven't noticed, has taken a HUGE hit in the last couple years. A few years ago it was around $2200 an ounce. Today it is $1300.60. Silver was around $35 at that time and it is now $18.39.

Retirement at your age should be a primary concern so you can live comfortably when you retire. Even if somehow Social Security survives you, the amount you will be getting will be poverty level 23 years from now. If I got my retirement now I couldn't survive on it.
Gold never broke 2000 bucks an ounce so far as I can tell from historical charts. Can 401ks not take a hit as well? I would assume they are at risk as well no?

Perhaps I am just paranoid, but to me, the idea of having little to no control or a physical asset to touch, it wigs me out to think if something happened I could lose it all.
 

Varmint

NES Member
Rating - 100%
9   0   0
Joined
Jul 5, 2014
Messages
15,727
Likes
7,936
Location
North Shore, MA
Dude, at age 32 you should be maxing out your 401k contribution. Your investment compounds tax free -- as your investment grows, the IRS doesn't take money out of it. Whether your company matches or not, 401ks are a super great deal.

Your 401k plan undoubtedly allows for multiple different investment options. Take a look at your plan. Chances are they have an S&P 500 index fund. Transfer your investment into that.

For the vast majority of people, your only hope of retiring is to max out your 401k.
Technically he could put the same money into a non-retirement investment account, invest it for 30 years, and when he retires that money will be tax-free, instead of taxed like the 401k.

problem with this is that people are more likely to draw down on a non-retirement fund than a 401k. So I recommend the 401k.

Might as well take advantage of the tax break before washington takes it away.
 
Rating - 0%
0   0   0
Joined
Jan 22, 2012
Messages
220
Likes
37
Location
Allston
Gold never broke 2000 bucks an ounce so far as I can tell from historical charts. Can 401ks not take a hit as well? I would assume they are at risk as well no?

Perhaps I am just paranoid, but to me, the idea of having little to no control or a physical asset to touch, it wigs me out to think if something happened I could lose it all.
What about theft, fire, terrorist acts or natural disasters...depending on where & how you store assets (not really asking where you keep your stuff). Just make sure your homeowners insurance or renters insurance provide adequate coverage. You might be surprised. There are real examples I've seen that have been bad for folks.
 

Varmint

NES Member
Rating - 100%
9   0   0
Joined
Jul 5, 2014
Messages
15,727
Likes
7,936
Location
North Shore, MA
Gold never broke 2000 bucks an ounce so far as I can tell from historical charts. Can 401ks not take a hit as well? I would assume they are at risk as well no?
Depends on what's in it. Mine is 100% money market right now, in prep for the depression our central banks are prepping us for.

My 401k actually has a brokerage option, so you can buy anything, even a gold ETF, or S&P500 short ETF.
 

RoterTeufel

NES Member
Rating - 100%
8   0   0
Joined
Sep 24, 2011
Messages
1,589
Likes
143
Location
Billerica, MA
I'm 32 as well.

Let me put a few things into perspective without making too many assumptions about you, or how either of us may or may not be alike, or your views on the world. Sound ok? [thumbsup]


Your company likely did have a big "HR meeting" telling "everyone" how automatic enrollment was going to happen at X date, unless you opted out. Maybe you missed it, maybe you weren't paying attention. Either way, they have your money.

Social security very likely will not be there for us. Unless you plan on dying young, you're going to need that money, so you should start saving (I know, I sound like someone's dad, or grand-dad).

Personally, I put 10% into my 401k, and I still don't think that will be enough. I want to be able to live the same way when I'm older as I do now. I'm a pretty frugal person with certain things (I have jeans from high school still & sunglasses that are almost 10 years old).

My point is you are the only one who is going to really save for your future. Find out what funds your money is in, and then pick something (multiple somethings) that have the lowest FEEs. Most of the time you'll get a better return that way. And, don't touch it!!! Don't concern yourself with market volatility, or play with it like you're a day trader.

I do suggest that you think about diversifying your portfolio away from purely precious metals, and explore more of the market and see what it has to offer.
 

hminsky

NES Life Member
NES Member
Rating - 100%
65   0   0
Joined
Dec 2, 2005
Messages
7,792
Likes
3,500
Investing in a 401k is a great deal, because it's pre-tax money. So if you are paying say 20% federal income tax, it's like a 20% return right there. That can add up seriously over the years. So investing $100/month is really only costing your $80. And they don't tax the dividends or other gains that get folded in until you start withdrawing money at retirement.

But you must watch out for what the money is being invested in, it could be a scam whereby the company charges some whopping "load" of several percent for 'management', and you end up with no investment gains. If they are charging more than 0.25 % or something, then try and figure out how to switch funds and invest it yourself. A super low-load index fund based off the S&P 500 or something.

If you contributed $100/month for 35 years, and got an average yearly return of 10%, that would end up as $350K after 35 years. But you *must* find an index fund with practically zero load, otherwise it will all get siphoned off.
 

EJFudd

NES Member
Rating - 100%
13   0   0
Joined
Apr 8, 2013
Messages
4,099
Likes
1,894
Location
Behind Enemy Lines
Just throwing this in: 401k & IRA's are 'Tax Free' when withdrawn . . .
401(k)'s are tax deferred, meaning your contribution comes out of your salary before that money is taxed. But you will need to pay taxes on it when you take the money out, unless this is a Roth 401(k) which is a very different situation.
Tabascoisnice is correct. Only Roth 401(k)'s and Roth IRA's are tax-free when withdrawn. It's extremely doubtful that the OP's 401(k) is a Roth 401(k).
 
Rating - 100%
7   0   0
Joined
Sep 15, 2008
Messages
9,736
Likes
2,655
Depends on what's in it. Mine is 100% money market right now, in prep for the depression our central banks are prepping us for.

My 401k actually has a brokerage option, so you can buy anything, even a gold ETF, or S&P500 short ETF.
um....wat? [laugh] Like I said I know nothing about investing in the sense of formal markets
 
Rating - 100%
11   0   0
Joined
Apr 12, 2007
Messages
21,207
Likes
9,899
What about the idea of investing it in tangible goods such as gold or silver coin.

as for not having a 401k, for the last 12 years of my adult life I have needed every extra penny to pay for things like food, heat, and fixing up my old ass house. Retirement has been the least of my concerns.
If you're referring to your 401k investing in gold or silver, that can't be done. It can be done for an IRA with some difficulty (gotta have someone officially hold the coins for you, etc.), but that'd be dumb. Gold/silver physically held is anonymous, so locking it into the most non-anonymous "here I am government with my gold" 401k plan would be silly.

Now is probably a good time to buy some physical silver (not in a 401k) since it has come down so much, but I would not recommend you bother with this unless you first have some cash saved up (and probably put in the bank). You mentioned having stuff you can sell off quickly.... good, but I'd really recommend having actual cash, maybe at least 6 months living expenses. Once you have that, it wouldn't necessarily be bad to hold onto some silver, maybe 10% of total net worth. (Don't go nuts though... no putting everything in silver.) Pay off any CC's if you have balances.

After that, I don't think it'd be necessarily terrible if you put some into a 401k, but it's not all that attractive without the matching. 100% matching means you immediately double your money, which is nice. If you then took it right out with say a 40% tax/penalty, you're still ahead some. I think you mentioned after 2 years you get matching?

But, this is just my opinion and my investment advice should be suspect... I invested in a beeitch of an ex-wife which then caused me to lose everything. What do I know?
 

dbott63

NES Member
Rating - 100%
10   0   0
Joined
Dec 31, 2010
Messages
1,108
Likes
202
Location
NH
Gold never broke 2000 bucks an ounce so far as I can tell from historical charts. Can 401ks not take a hit as well? I would assume they are at risk as well no?

Perhaps I am just paranoid, but to me, the idea of having little to no control or a physical asset to touch, it wigs me out to think if something happened I could lose it all.
I believe the best gold did (closed at) was just a hair over 1900 in 2011. On a given day it may have spiked over 2k but dropped before closing. We're the same age and I completely understand the "what if I need it" concern. I figured out what I can set aside for the future and spread it around (401k, stocks, PMs, ammo). If a major issue comes up and you need to access the 401k there is usually a way to take "loan" the money to yourself and pay it back with little or no penalty. I found the key to getting over the pontential lack of access was to set aside enough cash that I could survive for several months and put it into a savings account. It barely keeps up with inflation and it took a while to save but it gave me the comfort to invest elsewhere. It takes time and you have to start somewhere (and it sounds like you have in some form or another).
 

JoeT

NES Member
Rating - 100%
13   0   0
Joined
Jul 11, 2006
Messages
4,998
Likes
1,529
Location
citizen turned Felon in CT
Despite what the naysayers say, there is no single chance of building for a better retirement than your 401K (or something similar like a 403B/IRA/etc). Compounding interest is your friend. And had you done this 2 years ago, you'd already be getting "free" money in the form of a match from your employer.

I've got 15 years on you and have been lucky. I just got a statement today, last quarter gave me 15.2% in gains.

At your age (mine too) you can max your 401K contributions to $17,500 a year (jumping to $18,00 this year) and both my wife and I max. But we get good company matches, both of us have 50 cents on the dollar match so our employers add a total of $17,500 to our retirement.

Tangible items are good, but there are risks with those as well. I'm assuming you're "investing" in guy stuff. i.e. cars, guns, collector instruments, gold, silver and maybe even real estate. All are as volatile, or even more so, than the stock market, and as an added risk there is the real risk of theft.


I'm going to follow and end with this, and really I mean no disrespect. At 32 and married you owe it to your wife (and future kids) to save for their future. And my save I mean more than $17 a week. I know money is tight, I lived in a friggen tent for a year so I know how tight it can be, but you need to take a real hard look at both your income and your "outcome". I through a common phrase at you. PAY YOURSELF FIRST.
 
Top Bottom