to start a 401(k) or not
 

Alright so here is the deal. I'm 23y.o. buying a house right now and im not going to have a bunch of money to throw around. My company doesn't match my 401(k) at all. And I already have a union pension plan that my company pays into $3 every hour I work and I think that is pretty good no? Even if it is a small % of my pay or a small flat payment would it be worth it. I personally think saving my money and investing it in other ways might be better for me.

Just trying to find some direction since I'm new to this "being responsible with my money" thing called "growing up". Haha

Thanks guys :tipwink:

Money in a 401(k) grows tax free; invest as much as you can.

Agreed. & depending on where you live, don't buy, rent & put more money into your 401(k).

put at least 10% In your 401(k), you'll be happy about it when you're 59.5. besides it's pre-tax and will barely affect your paycheck.

:iagree: with what everyone said. Even 5% to start. Whatever you feel comfortable with. Have it withdrawn automatically from your paycheck. From there, progressively increase the amount you can put into your 401k while maintaining your lifestyle. My wife started saving when she was 19. I started much later. I regret not starting much much sooner.

Thanks guys. OK I've decided to start one once I'm situated in my house in a couple months. And where I live my appartment is $1,030 for a 1 bedroom appartment. And I'll own a house for around $1,300 a month. So it doesn't make sense to me to rent when I could buy for a little more. And houses for rent are $1,500. Which is too much for me not owning anything. Plus I want a garage. Lol

401(k) is pre tax. I put in about $200 a paycheck and it only affect my paycheck about 60 bucks from what I see (i.e., $140 a check goes into my 401(k) that would have been taken away in taxes anyway).

Use the 401(k). Start with a small contribution %. As you get raises, add the increase to your 401(k) % so your take home pay is unchanged. I started doing this at age 24 at my first post-college job. Within a few years, I was able to max out my contribution at $15.5k/yr. Today I still contribute the maximum, now up to $17.5k/yr. I'm 36,and my account holds right about $300k. My wife went through graduate school, and started contributing a few years later. Hers holds nearly $200k today. That's half a mil between us, and we're 35/36. And that's despite the recession and stock market ups/downs. Not trying to brag, but I want you to see what the possibilities are here.

There's a chinese proverb that I really like...When is the best time to plant a tree? 10 years ago. What is the second best time? Today. One can apply that to investing as well. A dollar invested at age 25 is worth several times more than a dollar invested at 40. Like a tree, it needs time to grow.

If you didn't pay cash for the S2K, you should sell it in order to redirect the payment to a 401(k). Seriously.

Your financial security in the future is way more important than a fancy car today.

Damn yall are making me feel bad, Im 24, in a similar situation (saving for a house, etc) Only been out of school and working close to a year now. I only have like 1000 bucks in my 403(b) account. My employer only matches something like 2% so thats all im contributing (and it doesn't kick in until 2 years employed) . But after reading this im considering bumping it up to at least 5% until I get myself situated then maybe more.

One idea is that you say you are buying a house and will be paying the same in mortage etc that you are at your apartment. Maybe this will allow you to contribute more due to the ability to write off your interest payments on your taxes (which will be very high in the first 10 years or so of homeownership if you take a 30 year option)

anyways, good read, ill be considering all of this.