What are you doing with your 401k?

And a day comes to an end where the market starts out down 200+ points and ends up ahead 200+ points. Essentially a swing of between 4-5% in a single day.

Ride the wave, y'all. I have a feeling there's a lot more of this coming....

 

I guess I didn't answer the original question?

What are we doing? Not a damn thing. We're 70/30 and aren't blinking an eye.

 

I learned a very important word recently: VESTING

This means that even if your employer matches at X percent of what you put into your company-sponsored 401k, they can take it back if you don't stay with the company for a predetermined amount of time. They put money in your account, but it's not really yours.

I recently rolled over my 401k from a former job and was shocked to discover the check for the rollover was one third less than the account balance. It was because I hadn't stayed with the company for five years. I immediately checked the vesting time with my current company and discovered it's six years.

Six years of employment, or they take it back. What kind of "benefit" is that?

This just pisses me off because I did start saving at 22, but between the academic sector, the nonprofit sector and now the 20-percent-profit-margin media industry, not one penny in my retirement savings has come from an employer.

 

Birdscribe: Technically, you're correct and I get your point. Only when you sell something have you realized your profit or loss. But that's like saying a person hasn't gained 50 pounds until they get weighed.

 

I've never heard of a company that matches at 50 percent. That really happens?

 

I'm not doing a damn thing. I'm 38 and right now my 401k mix is roughly 83% stocks 17% bonds and other non-stock equities as I'm in a mix fund and a pure stock fund.
I'm riding this out, knowing it will turn around within the year.
My company matches a certain percentage of your contributions up to a certain percentage of your pay. So I'm throwing 25% of my pay into the 401k right now, the company is matching something like 3-6% of that and will continue to do that until their contribution reaches a certain percentage of my pay, which it hasn't done the last few years.

 

Uh, yeah.

Of course, matching 50 percent up to six percent of your pay equals 3 percent.

Same as matching 3 percent at 100 percent.

The suits can tell themselves that they are encouraging the masses to save more.

 

I'll never forget my corporate finance professor, "its just paper losses until you sell." Yeah the market sucks right now and looking at the portfolio, I've essentially stood still since 1/07, but looking at the long run, the 401k is in good shape.

You just have to have faith in the long run, 5-10 years, which historically has shown solid returns for the past 100 years, better than bonds.

Trying to time the market is extremely difficult. That's why the hedge fund managers make their money on fees.

 

Mine matches at 50 percent, but (currently) vests at 50, too. Which means the money I actually get from them is only a 25 percent match (until it vests). Ugh.

Of course, I've only had my 401k for about a year-plus, so the vesting will go up to 100 percent in a few years. I don't know if the matching will increase -- and knowing my company, I doubt it.

 

Maybe a little bit of a threadjack here. If it merits its own threa, I'll start it.

I have about $9k liquid in my Roth right now. (I know I'm stupid for delaying investing it.) I'm looking at this as a buying opportunity although it does kind of suck to buy it now and see it only go further down, meaning I could have gotten it even cheaper.

What I was wondering though is if anybody had any stock-oriented funds they were generally happy with? I know everything's selling off right now, but anybody had any that they've liked over the long haul?

 

Firstime, pick one of those "year" funds named after the year you're most likely to retire. It's the easiest way to do it. It will be mostly stocks when you're young and slowly switch over to bonds as you get closer to the year.

 

It is NOT the same. With my company, if I put in $50, they match $50. With yours, you have to put in $100 to get $50. That costs you twice as much to get the same amount of savings.

Not the same at all.