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LIR: 401k matching. Put in up to what they match and no more. Why put your money into a program with restrictions on what you can and cannot

Posted by oblique (aka kkuphal) Aug 30 '10, 09:22

do with it? Better off to put the money into your own investments without such restrictions.

Responses:

This psychological stance is fascinating to me. I'd love to see studies on what people perceive as advantageous when given an extra bonus incentive. - Max Aug 30, 09:33 4
- Why the hell would anybody pay MSRP for a car? -- nm - Ender Aug 30, 09:34 3
  - heh, accidentally edited out 5% below. -- nm - Max Aug 30, 09:38
  - Dad always did this and it would drive his sons nuts. -- nm - David Aug 30, 09:37 1
    - Second question: Who the hell can *afford* MSRP for a car (in a lump sum)? :) -- nm - Beryllium Aug 30, 09:38
better to pay taxes and put it into a roth -- nm - ceregon Aug 30, 09:29 3
- nope. -- nm - Diva Aug 30, 09:30
- absolutely not true. -- nm - decline Aug 30, 09:29
- after maxing the match, of course -- nm - ceregon Aug 30, 09:29
because time and time again it has been shown that defering on a pretax basis will result in a greater account balance in the long run - decline Aug 30, 09:24 10
- Account balance isn't the only determining factor. You are hedging your bets on the tax situation in the future. Granted, you're probably right - oblique Aug 30, 09:30 1
  - Unless you're putting money away for the shorter term, it really is a much better option to put it in pre-tax. - pmb Aug 30, 09:34
- can't you guys put your own money into a a 401K (or equivalent) to get the tax break without doing it through work>? - Andie Aug 30, 09:28 7
  - not on a pretax basis we can't . -- nm - decline Aug 30, 09:29 6
    - Yes you can. It's an IRA. Though there are different styles of IRA, some of which are pre-tax and others of which aren't. -- nm - pmb Aug 30, 09:31 2
      - true, but if you contribute to an 401k plan, you lose the tax deductibility of the IRA phases out as your income increases -- nm - decline Aug 30, 09:34 1
        
        hmm, kind of garbled. Traditional IRA's are tax deductible (essentially making them pre-tax) but only 100% if you are not coved by a 401k - decline Aug 30, 09:35
    - wow, that's kooky. -- nm - Reagen Aug 30, 09:30
    - what if you are self employed? -- nm - Andie Aug 30, 09:29 1
      - if self employed you can have what is called a SIMPLE plan (which is kind of like a mini-401k) -- nm - decline Aug 30, 09:31
No, because you still put in the money pre-tax into a 401-k, so even if you don't get matching you're better off than investing it after taxes. -- nm - pmb Aug 30, 09:24
yes, I agree -- nm - Beryllium Aug 30, 09:23 1
- (maximize the matching, without going over, and it's basically free money) -- nm - Beryllium Aug 30, 09:24

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LIR: 401k matching. Put in up to what they match and no more. Why put your money into a program with restrictions on what you can and cannot

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