Author Topic: 401k  (Read 1599 times)

Offline DP7

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401k
« on: October 23, 2012, 10:13:26 PM »
Can anyone offer strategies for investing in a 401k? Information on funds offered by Vanguard would be particularly helpful.

Offline CholentTheTraveler

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Re: 401k
« Reply #1 on: October 23, 2012, 11:35:56 PM »
Company matching or not? Age as that determines if you want an aggressive investment or something more passive?

Offline DP7

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Re: 401k
« Reply #2 on: October 24, 2012, 12:06:29 AM »
Company matching or not? Age as that determines if you want an aggressive investment or something more passive?
company matches 25% of 6% of salary. Age 25

Offline bem684

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Re: 401k
« Reply #3 on: October 24, 2012, 10:56:30 AM »
My advice: start investing, and start right away!  Use ETFs over mutual funds if they're available.  At age 25 you should be at least 90% in stocks (I have 98% and I'm 28).  Make sure to have at least 1/3 of your stocks in international markets.  And remember that the money in your 401k is for retirement!  You've got 40+ years before you'll take it out so don't panic if the markets swing and the value drops temporarily. 

And listen to the Ric Edelman show!   www.ricedelman.com

If you want a detailed idea of what to invest in that takes in to account your age, how long you'll be investing for, and risk tolerance, you can look at Ric Edelman's Guide to Portfolio Selection at https://www.advisorlynx.com/secure/edelman/.

Offline Mikeoracle

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Re: 401k
« Reply #4 on: October 24, 2012, 11:19:42 AM »
.  And remember that the money in your 401k is for retirement!  You've got 40+ years before you'll take it out so don't panic if the markets swing and the value drops temporarily. 
Good point. I see too many young people freaking out over their 401K balance when the markets dip. Technically if you contribute steadily its actually in your best interests for the markets to dip early on while you are young, it gives you more bang for your buck. The same weekly contribution will buy more stock when they are low than when they go up (duh).
Obviously at the end of the day you need the long term trend to be up, but when investing in the long term, the occasional dips along the way are just "stocks on sale".

Offline Zevi16

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Re: 401k
« Reply #5 on: October 16, 2018, 10:52:51 PM »
I was recently told that you can take out of the 401k for a first time home buyer. Is that the case?

Offline Something Fishy

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Re: 401k
« Reply #6 on: October 16, 2018, 10:55:15 PM »
I was recently told that you can take out of the 401k for a first time home buyer. Is that the case?

Probably depends on your plan, but in my plan I could take out for a primary dwelling regardless if it's the first time or not. I could also take out a loan for any reason and pay interest to myself.

Offline Zevi16

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Re: 401k
« Reply #7 on: October 16, 2018, 10:55:55 PM »
Probably depends on your plan, but in my plan I could take out for a primary dwelling regardless if it's the first time or not. I could also take out a loan for any reason and pay interest to myself.
Would this be the same in a Roth IRA?

Offline Something Fishy

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Re: 401k
« Reply #8 on: October 16, 2018, 10:58:15 PM »
Would this be the same in a Roth IRA?

My plan doesn't differentiate as far as loans go.

Offline Sammy82

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Re: 401k
« Reply #9 on: October 16, 2018, 10:58:49 PM »
I was recently told that you can take out of the 401k for a first time home buyer. Is that the case?
Gotta check your plan details but generally buying a house is considered a hardship and yes, you could make a withdrawal. A few things to remember 1)you will have to pay taxes (and probably some fees) on the amount withdrawn 2)there is probably a penalty period where you wont be able to contribute anything (my company has a 6 month penalty period) 3) you could only withdraw money that you contributed, not money that ur employer contributed or profits.

Offline Something Fishy

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Re: 401k
« Reply #10 on: October 16, 2018, 11:00:49 PM »
Gotta check your plan details but generally buying a house is considered a hardship and yes, you could make a withdrawal. A few things to remember 1)you will have to pay taxes (and probably some fees) on the amount withdrawn 2)there is probably a penalty period where you wont be able to contribute anything (my company has a 6 month penalty period) 3) you could only withdraw money that you contributed, not money that ur employer contributed or profits.

Negative on all counts with my plan, except for a small processing fee (something like $150 IIRC).

Offline ExGingi

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Re: 401k
« Reply #11 on: October 16, 2018, 11:34:39 PM »
I was recently told that you can take out of the 401k for a first time home buyer. Is that the case?

IINM there are different loan provisions (depending on your plan). A regular loan has a maximum term of 5 years, while (IINM) a loan for a home purchase has a maximum term of 10 years.

Gotta check your plan details but generally buying a house is considered a hardship and yes, you could make a withdrawal. A few things to remember 1)you will have to pay taxes (and probably some fees) on the amount withdrawn 2)there is probably a penalty period where you wont be able to contribute anything (my company has a 6 month penalty period) 3) you could only withdraw money that you contributed, not money that ur employer contributed or profits.

- 1/3 (at least)

I am not familiar with hardship withdrawals, but I just took withdrawals from my 401k (to roll over into an IRA, and then convert to a ROTH). My plan had no fees on the withdrawals. There was no change to my ability to make contributions.  I don't know about hardship withdrawals, but for regular in-service (i.e. while still employed) withdrawals, the amounts available for withdrawal are only Vested Employer contributions, and amounts attributable to funds rolled over into the plan.
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Offline haltkup

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Re: 401k
« Reply #12 on: October 16, 2018, 11:37:02 PM »
Try to max out you company match. For down payment on primary residence loans, my plan allows 50% of 401K value with max 50K at a current interest rate of 6.25%. Must be paid back within 15 years and payments are not tax deductible. Also, loan balance due in full upon leaving employer. No tax penalties but with default back-taxes kicks in.

Offline Zevi16

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Re: 401k
« Reply #13 on: October 17, 2018, 01:35:50 AM »
Try to max out you company match. For down payment on primary residence loans, my plan allows 50% of 401K value with max 50K at a current interest rate of 6.25%. Must be paid back within 15 years and payments are not tax deductible. Also, loan balance due in full upon leaving employer. No tax penalties but with default back-taxes kicks in.
That interest goes back into your account. Correct?

Offline 12HRS

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Re: 401k
« Reply #14 on: October 17, 2018, 01:36:43 AM »
Try to max out you company match. For down payment on primary residence loans, my plan allows 50% of 401K value with max 50K at a current interest rate of 6.25%. Must be paid back within 15 years and payments are not tax deductible. Also, loan balance due in full upon leaving employer. No tax penalties but with default back-taxes kicks in.

ask an accountant. there should be penalties if not paid back within 30 days upon leaving employer.