help with saving for retirement.

[45calibre]

i just started a new job and they offer 401K but they do not match any of my contributions. i wanna start saving for retirement while im young, im 23.

would it be better to go with some sort of IRA ay my bank instead? roth or traditional?

what i had in mind was to look at my employers investments and see if they offer a better rate of return than my bank IRA will and go from there.

any info is greatly appreciated.

 

[jd4320t]

They don't match at all or are you in a probationary period and they will match at a certain time??

 

[45calibre]

they dont match at all which kind of surprised me.

 

[45calibre]

also should i consider getting an IRA with an investment firm?

 

[96firephoenix]

take the money that would go to your 401(k) and buy gold.

 

[45calibre]

take the money that would go to your 401(k) and buy gold.

why

 

[hooky]

My former employer didn't match either. I maxed our IRA's and then put money in the 401k. New employer 401k has a match on a portion, so I take advantage of that money first, max the IRA's and what's left goes back to the 401k.

 

[Rookie]

The advantage of 401k is that it's automatically deducted so you'll never miss it and you'll never have an excuse to put it off till next week.

 

[JoshuaW]

If they will match at some eventual point (or give contributions, mine doesnt match, but they put 7.5% of my earned income in year) then you should take advantage of that.

If they do not match at all, open a Roth; assuming you are not at your peak earning potential, and you dont have any interest in contributing more than the max. I would also suggest you diversify. Yes, get your money going in your retirement accounts, but set aside some other money for savings, gradually roll those savings into CDs and/or Treasury notes. If you are feeling even more adventurous, do a lot of research and look into buying some fairly consistently performing ETFs, or even more bold, dividend paying stocks.

Gold and silver. Personally, they are in a bubble to me. I am not saying they dont have value, and if you think you can monitor prices regularly, and manage to unload it before they go down (and they will, a lot) then go for it.

Finally, remember that there is risks involved. Think about what is best for you, and how you will weather the bad. If you need a hands off approach, an IRA is great. If you can go more hands on, you can probably get better returns, but you have to remember to always balance and get some of your gains into safe investments, so that you are slowly reducing risk as you grow older. At our age it is easy to brush off a downturn in the market. Six months before retirement? Not so much. Oh, and remember, ALWAYS CONTRIBUTE! No excuses. Retirement is an obligation, IMO, so treat it just like you would pay rent/mortgage, and never forget it. Unless you are on the brink, never steal from, or loan against your investments.

 

[sgreen3]

Get a "ROTH" IRA you can get them through your bank or investment firm, and you can have a set ammount still taken out of your check each month.

 

[Lucas156]

The good thing about the 401k is it automatically comes out of your check so you don't have to remember to save.

 

[PistolBob]

I wish the Roth IRA was around when I was 23...(almost 35 years ago). If your employer doesn't contribute a dime, then forget the 401K and do the Roth. Put as much in there as you can reasonably afford. The Roth is all "after tax" dollars but you pay NO TAXES on any of it when you start drawing it out at age 59 and a half. It's tax free income. At age 23 your income is going to be substantially less than at age 30 (usually but who knows in this screwed up economy). You also want to shop around a bit and find the place with the lowest management fees. Usually this is a bank and not a investment house.

Personally I don't buy gold or silver. Especially when the market prices are at all time highs. The trick to investing is to buy low and sell high. At your age don't be afraid to take a few risks, just mitigate them the best you can with lower risk offsetting investments.

Good luck! You're gonna need it.

 

[Expat]

I agree on the Roth if your employer doesn't match at all. I doubt that tax rates are going to be much lower many years from now than they are now. The biggest thing though is trying to get the money out of your hands as automatic as you can get it. It is easy to find reasons not to do it after you have the money.

 

[Indy_Guy_77]

General Rule of Thumb for investing: Buy low, sell high.

Another General Rule of Thumb for investing: Invest with LONG TERM goals in mind; and plan to "ride out" the ups & (especially) downs in the market.

Bon chance!

-J-

 

[pudly]

Definitely put the money in an IRA over the 401K (either Roth or regular) if they don't match. You will be able to control what firm handles the IRA and how many/what type of investment options you have. Any employer controlled plan will be more restrictive. Also, you will avoid the roll-over hassles if/when you change jobs. The IRA is in your name only. Although it won't be automatic deduction from your paycheck, you can set it up as monthly transfers from your bank account- just as easy.

Congrats on thinking about investing early. It will pay off.

So, basically they are contributing nothing at all for retirement benefits?

 

[cburnworth]

Agree with Roth IRA. Also limit credit card usage, pay cash for everything. Don't buy things that lose your money. check out dave ramsey.

 

[Indy_Guy_77]

Also, depending on how much you wish to invest, a Roth may or may not work for you. There's a limit on contributions to a Roth, but not a traditional IRA.

If you've ever heard Dave Ramsay's radio show, he's forever speaking to the long-term investment benefits of mutual funds (which, simply, are like a hodge podge of various stocks all together in a single place, rather than buying each stock individually)

-J-

 

[HDSilvrStreak]

Put as much in there as you can reasonably afford.

Whatever you do, start saving now and you will not regret it. My only change would be to calculate out the very maximum you think you can afford, then add 10% to that figure and start saving. If you save what you can "reasonably afford", you're not saving enough. You're young. Make it painful to start (I wish I had). Every dime you put it now has that much more time to earn for you. If it's painful now, it will only be "mildly uncomfortable" in your peak earning years.

 

[Bunnykid68]

Another very important thing to consider. Do not incur debt. If you cannot pay cash for it are you sure you really need it now.

 

[Expat]

But don't put 100% of your savings into a retirement fund. You will need to save for cars, house, vacation, kid's college, etc.