401k wtf?

[EdgeMoragan]

I got 2 letters today about me being enrolled from now on in 401k at my job.

I never in any way signed or responded to anything online or in paper about being enrolled in 401k, I did not whatsoever enroll myself. Is it possible that my company force-enrolled me somehow after my first year? Or is this some intricate sort of scam..? Either way I'm pissed, no way am I letting them deduct 2% from a job I'm about to dump -_-.

If I am just completely ignorant as to how this works, that is fine too.

[finale23]

I got 2 letters today about me being enrolled from now on in 401k at my job.

I never in any way signed or responded to anything online or in paper about being enrolled in 401k, I did not whatsoever enroll myself. Is it possible that my company force-enrolled me somehow after my first year? Or is this some intricate sort of scam..? Either way I'm pissed, no way am I letting them deduct 2% from a job I'm about to dump -_-.

If I am just completely ignorant as to how this works, that is fine too.

401k means free money from your employer, and many companies will match 100% up to 6% of your salary. simply put, if you agree to put 6% of your salary into a 401k retirement fund, your employer will match that 6%. so you will have an amount equivalent to 12% of your salary in the fund at the end of every year. you will probably receive 8-12% annual compound interest return on the money in the fund. more importantly, the money in the fund are not taxed until you use them most likely when you retire. alot of 401k funds are also portable, meaning you can take it with you without any reduction in value when you leave your employer.

[EdgeMoragan]

I got 2 letters today about me being enrolled from now on in 401k at my job.

I never in any way signed or responded to anything online or in paper about being enrolled in 401k, I did not whatsoever enroll myself. Is it possible that my company force-enrolled me somehow after my first year? Or is this some intricate sort of scam..? Either way I'm pissed, no way am I letting them deduct 2% from a job I'm about to dump -_-.

If I am just completely ignorant as to how this works, that is fine too.

401k means free money from your employer, and many companies will match 100% up to 6% of your salary. simply put, if you agree to put 6% of your salary into a 401k retirement fund, your employer will match that 6%. so you will have an amount equivalent to 12% of your salary in the fund at the end of every year. you will probably receive 8-12% annual compound interest return on the money in the fund. more importantly, the money in the fund are not taxed until you use them most likely when you retire. alot of 401k funds are also portable, meaning you can take it with you without any reduction in value when you leave your employer.

Is it even worth it if I am gonna jump out of this job in 6 months or so? Also were they allowed to enroll me without my signed permission..?

[Khamsin]

Or is this some intricate sort of scam..? Either way I'm pissed, no way am I letting them deduct 2% from a job I'm about to dump -_-.

You're acting as if they're taking money away from you, instead of giving it to you. You do keep your 401k wherever you go, you know.

[finale23]

I got 2 letters today about me being enrolled from now on in 401k at my job.

I never in any way signed or responded to anything online or in paper about being enrolled in 401k, I did not whatsoever enroll myself. Is it possible that my company force-enrolled me somehow after my first year? Or is this some intricate sort of scam..? Either way I'm pissed, no way am I letting them deduct 2% from a job I'm about to dump -_-.

If I am just completely ignorant as to how this works, that is fine too.

401k means free money from your employer, and many companies will match 100% up to 6% of your salary. simply put, if you agree to put 6% of your salary into a 401k retirement fund, your employer will match that 6%. so you will have an amount equivalent to 12% of your salary in the fund at the end of every year. you will probably receive 8-12% annual compound interest return on the money in the fund. more importantly, the money in the fund are not taxed until you use them most likely when you retire. alot of 401k funds are also portable, meaning you can take it with you without any reduction in value when you leave your employer.

Is it even worth it if I am gonna jump out of this job in 6 months or so? Also were they allowed to enroll me without my signed permission..?

it's usually up to your discretion whether you want to participate or not. every company has different enrollment requirement, but i know some companies will automatically enroll their employees into whatever fund they have because well, it's free money. you should talk to the HR at your firm regarding compensation and 401k requirement.

[Orph]

401k is one of the ways you can save money for retirement. Companies dont do pensions anymore and our generation wont see a cent from social security. Not investing in a 401k is a terrible terrible idea.

[LinktheDeme]

401k is one of the ways you can save money for retirement. Companies dont do pensions anymore and our generation wont see a cent from social security. Not investing in a 401k is a terrible terrible idea.

If the company goes bankrupt so does their 401k no? Though since the new bankruptcy laws a lot of shit has changed i'm not sure anymore

[Dolmen]

If you never signed anything... I'd look into that. Like has been said, it's taken out pre-tax, so you will barely see any difference in your normal checks if it's just 2%. Stick with it, best to get started with it now. Also, when you dump the job you have the ability to keep your money in their 401(k) program as long as it meets their minimum account balance amount (my employer requires at least $5,000 in your 401(k) to keep the money there if you're an ex-employee). If you build only a little bit, then it can be rolled into an IRA or another 401(k) program.

[Dolmen]

If the company goes bankrupt so does their 401k no? Though since the new bankruptcy laws a lot of shit has changed i'm not sure anymore

401(k)'s are managed by a different company. Profit-sharing is managed by the employer, as I lost a lot from that when the tech bubble burst.

[guartz]

yea they can auto enroll you.

but whats more likely is that they sent out a memo (which you missed) that said, "if u don't want 401k says so before this date"

[finale23]

If the company goes bankrupt so does their 401k no? Though since the new bankruptcy laws a lot of shit has changed i'm not sure anymore

401(k)'s are managed by a different company. Profit-sharing is managed by the employer, as I lost a lot from that when the tech bubble burst.

yup, in a defined-contribution plan, 401ks are usually managed by investment companies like vanguard, T.rowe price, etc. so in the event that your employer files for bankruptcy, your retirement fund that has already been vested won't be affected in the slightest. on the other hand, companies that offer a defined-benefit plan, usually setup a retirement fund, which will then be managed by a third party trustee.

[EdgeMoragan]

Ah okay thanks everyone, this doesn't sound so bad then. Getting signed up for something without my knowledge and having it suddenly alerted to me just naturally made me assume "shit is going down". Thank you very much for the patient advice! ^^

[Khamsin]

Ah okay thanks everyone, this doesn't sound so bad then. Getting signed up for something without my knowledge and having it suddenly alerted to me just naturally made me assume "shit is going down". Thank you very much for the patient advice! ^^

Just keep in mind: It's your money. If you really hate the fact that it's in there, take it out. You'll get hit with a 10% penalty, but keep in mind that your employer matched your contribution so you still have more than you would have had if you declined.

Although I'd just keep it in, and roll it over into your next job's 401k plan. It's never too early to start saving up.

[Weltall]

A lot of failed topics and posters around here lately...

[Cephius]

I got enrolled in my company's 401k also... though they had a meeting and let us enroll by ourselves. My company lets you take up to 12% of your pay, with the company matching a quarter for every dollar up to 3% of your gross income. The thing that struck me was they showed us a comparison chart, one graph was a person giving 4% from when they were 20-30, and another for someone giving 6% of their pay from 40-60. At retirement age, the second graph had significantly less money even though they were putting more money in for a longer amount of time. I'm probably getting the numbers wrong, but you get the idea. Saving money early, even if its not much initially, makes it grow much faster than if you start late.

You can also roll 401ks from old jobs into a new one (I know Fidelity does this free of charge, not sure about other institutions) so you don't have to worry about your money disappearing on you.

[Senoska]

A lot of failed topics and posters around here lately...

THE IRONY..

and yea, you shouldn't be mad about this, if anything be happy. Its free money and they saved you the hassle of enrolling. Personally, I would be happy. As someone said before we arn't getting shit for social security, it would be VERY unwise to not roll with this.

[Ksandra]

I got 2 letters today about me being enrolled from now on in 401k at my job.

I never in any way signed or responded to anything online or in paper about being enrolled in 401k, I did not whatsoever enroll myself. Is it possible that my company force-enrolled me somehow after my first year? Or is this some intricate sort of scam..? Either way I'm pissed, no way am I letting them deduct 2% from a job I'm about to dump -_-.

If I am just completely ignorant as to how this works, that is fine too.

401k means free money from your employer, and many companies will match 100% up to 6% of your salary. simply put, if you agree to put 6% of your salary into a 401k retirement fund, your employer will match that 6%. so you will have an amount equivalent to 12% of your salary in the fund at the end of every year. you will probably receive 8-12% annual compound interest return on the money in the fund. more importantly, the money in the fund are not taxed until you use them most likely when you retire. alot of 401k funds are also portable, meaning you can take it with you without any reduction in value when you leave your employer.

Is it even worth it if I am gonna jump out of this job in 6 months or so? Also were they allowed to enroll me without my signed permission..?

small note, at this point in the game most companies (aside from the very small) have some form of 401k plan. Even if you go to a different job you can carry over your plan to your new one without penalty.



Also aside from that, the more money you put into your 401k the better. May suck to have your money taken away now, but with the way things are looking you may never see your SS money when you retire years and years from now (even though you're paying taxes on it). 401ks are much much safer and garunteed versus depending on SS. So even if your young, take advantage of them while you can.

[Guyverarmor]

401k is a awsome to plan for the future, really is. I have been doing my 401k for almost a year at Time Warner, gonna match me @ 5%, which is not bad at all really.

[terranova]

It is also good to save up some money in like a savings account.

SS is predicting that they will be exhausted by 2041. Currently in order to get the full benefits of SS most of us would have to work til we're 67. The world wants you to work til you literally die on the job anyway. So you have to prevent this yourself.

[Darus Grey]

Fiscal responsibility of the new "cool" thing to do for the younger generation.

Everyone should have some kinda retirement plan, not having one is a sure way to make sure you never retire.