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The exit of youth
Flake:
I think its a wise move to increase your 401(k) contributions if you can afford it. At the very least make sure you contribute enough to get the maximum company match. Otherwise you are leaving money on the table. I've been hearing alot of people talking about pulling out of their 401(k)s right now - terrible idea. Why should you continue to dump money into a fund thats losing money? Because you are buying in a rock bottom prices (well maybe not quite rock bottom but pretty close to the bottom - hopefully). Why wait till the market is back on an upswing to start contributing again? Right now your getting more shares for less money. Fortunes are made during recessionary periods for those with the foresight (and available capital) to pounce. I wish I the cash to buy another house right now.
Here's an anology I think we could all appreciate - Based on current market values, If $1,000 could buy you two Discs of Tron machines, why would you wait till the market on that machine increased so much that $1,000 only bought you one? You wouldnt of course, and its simple logic but for whatever reason people get scared and back away. I suppose if you are close to retirement age then that makes sense but I assume most of us here are not much over 40.
pinballwizard79:
He's right, what goes down will go up.
Plus you turn an "effective" 4.5% net income deposit (which is actually a 6% gross wage contribution) + a 50% employer match = apx 9% total prior to any compounded growth & when compared to how that affected your net income well thats DOUBLE what you put in, again prior to CAG.
But the world sure does suck right now thanks to some people playing with oil futures & inflating their bank stocks just before retirement (ahem, Mozillo).
I always wondered if the CEO's of these banks had a green phone (for greenspan) like on batman who had the red presidential phone. Great, I feel like puking now, damn the jerk who started this thread..............er, wait a minute.
EDITED: cuaz I be teh mispellllin
daywane:
I just know my company mathes .50 cents to the $1.00 up to 6 %
I have gotten a 3% raise every year.
If I put the raise in 401K, I miss no money in pay check ;)
I know all talk radio people say put the rest after company match in a Roth IRA but I could not bank 3% and not touch it before it built enough to invest.
get it out of my hand first is safest way for me.
edit
I thought I better add this ...
I am no expert at all.
I got into my 401k only 3 years ago (maybe 4)
1st 2 years I was only 3 % in secure investment (not high risk)
I bumped up to 6 % less than a year ago
I was at $9,000 bucks
I am now at $7,800 ( I still own the stock, its only low falue at todays cost)
I fell this is still good. I know many others that lost $65,000 in high risk
I might go high risk in a few years :dunno
Flake:
The younger you are the higher risk you should assume. As you age you progressively move into a less and less risky portfolio. Most plans actually allow for your risk level to automatically adjust to a more conservative portfolio as you age. Assuming you select that option.
daywane:
I was advised by Vangard to go high risk.
MOM advised secure.
MOM is worth 1 mill in paper. I took her advice :cheers: