Guest nmehta Posted January 21, 2001 Posted January 21, 2001 My employer started a 401K plan (Y2000) with no matching and the mutual fund family does not seem that well known. Is it worth participating ? What if some of the funds are known ? Due to the lesser control one has over the contributions as compared to say ROTH IRA, is it advisable to contribute given that there are no matchings ? I feel I might be better off forgoing this benefit and simply investing after-tax dollars myself, say in good large cap stocks. Any opinions ? Thanks.
IRC401 Posted January 22, 2001 Posted January 22, 2001 If you are not planning to contribute more than $2000 and have the discipline and desire to save and invest on your own, forget the 401(k) plan.
Guest Pam Gifford Posted January 22, 2001 Posted January 22, 2001 Some of the best performing funds are ones that are not familiar to me. (That's why I have to work.) You may want to do some research on the funds and fund family. You may also want to look at the class shares that are offered. Investor shares generally have lower costs than other classes and may not be available to you in an IRA. It is a small point, but the cost of your savings may be paid by your employer in the 401(k), not by you in your IRA. Also, you may be able to invest in a Roth and your 401(k) too.
LCARUSI Posted January 23, 2001 Posted January 23, 2001 The 401(k) Plan probably has a loan provision - which you might appreciate having available someday.
Guest LTurner Posted January 24, 2001 Posted January 24, 2001 Whether you're familiar with the fund family is not the point. First consider the tax savings... if you are in the 21% bracket, it ends up costing you 79 cents on the dollar to save one dollar. Secondly, Your employer is likely not doing this plan all by themselves... find out who the provider is and visit with a qualified financial advisor about your options. These services are likely available to you in the plan, check it out. Even if you only choose a money market fund, or a GIC (guaranteed interest contract) you're still money ahead. Remember, you may be able to do both a 401k and a Roth, and what you defer into the 401k will reduce your taxable income reported on your W2.
Guest LTurner Posted January 24, 2001 Posted January 24, 2001 just another quick comment.... your employer may not match now, but the plan is likely designed to allow for a match in the future, and quite likely allows for profit sharing - should the employer decide.
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