We’re an investing service that also helps you keep your dough straight. We’ll manage your retirement investments and, using NestEgg we can help you with every penny!
—Ready to subscribe—
For more information visit:
www.JazzWealth.com
— Instagram @jazzWealth
— Twitter @jazzWealth
Investment related questions 📧 Dustin@JazzWealth.com
Business Affairs 📧Carolyn@JazzWealth.com…(read more)
LEARN MORE ABOUT: 401k Plans
REVEALED: Best Investment During Inflation
HOW TO INVEST IN GOLD: Gold IRA Investing
HOW TO INVEST IN SILVER: Silver IRA Investing
When it comes to saving for your retirement, contributing to a 401(k) is a smart move. Not only does it offer tax advantages, but if your employer offers a match, it’s even better. In fact, for many financial experts, the match is the main reason to contribute to a 401(k) at all. Here are a few reasons to only contribute to get the match in your 401(k).
First and foremost, the employer match is essentially free money. Many employers offer to match a certain percentage of your contributions, up to a certain limit. This means that for every dollar you contribute, your employer will contribute an additional amount, effectively doubling your money. It’s a no-brainer to take advantage of this benefit, as it’s essentially a guaranteed return on your investment.
Another reason to only contribute to get the match in your 401(k) is that it’s a simple and straightforward way to save for retirement. With the match, you’re getting an immediate boost to your savings without having to do anything extra. And since the contributions are taken directly from your paycheck, you don’t have to think about it or make any additional effort to save for retirement.
In addition, contributing to get the match in your 401(k) is a great way to take advantage of tax benefits. Contributions to a traditional 401(k) are made with pre-tax dollars, which reduces your taxable income. This means that you’ll owe less in taxes in the year you make the contribution, allowing you to keep more of your hard-earned money.
Furthermore, contributing to get the match in your 401(k) is a solid way to start building a nest egg for your future. Even if you can only afford to contribute enough to get the full match, it’s a good start. Over time, the power of compounding returns will help your savings grow, and you’ll thank yourself in the future for taking advantage of this benefit early on.
In conclusion, the employer match is a compelling reason to contribute to a 401(k). It offers free money, is a simple and effective way to save for retirement, provides tax benefits, and helps you start building a nest egg for the future. If your employer offers a match, make sure to contribute enough to get it – it’s one of the best financial decisions you can make for your future.
Some of what you say here is ridiculous. Of course 401k companies will help you invest. It'll cost money, but they will. Most have robo advisors or human advisors.
My job never match so I just contribute 3% less than the max amount. No use since it’s just my own money and we don’t know what the company invested in. Union jobs are great but now you see downfalls. Yes we have pension but no employer 401k match at all
T shirt wow!
The real reason most financial advisors say to only contribute to the max is if most people max out their 401K then the have very little or no money to invest with a financial advisor who also makes fees off of your investments with them??? Think about it!!
Here is the scenario where you want to max out the 401k contribution. You are a high income worker where the Roth would be costly for taxes or you have exceeded the income limits for Roth contributions. The 401k has a good match, low fees and expenses and good investment choices like index funds.
What if your company offers no match? What’s your suggestion.
Not accurate advice. You get certain legal protections with a 401k such protection from judgments (lawsuits) and creditors. Have both a 401k and Roth IRA, if feasible, but don’t skip out on a 401k because there’s no company match.
I think an important point that was missed is “tax advantaged accounts.” If you invest $ in a Roth 401k, it is taxed going in, and then grows and can be pulled out tax free after age 59.5. On the other hand, personal investments (outside retirement accounts) are subject to capital gains tax.
My company offers 6% but I am only putting in 3% does that mean I won’t get the match or will they match me 3%?
Better to put it as company match, then roth (and hsa if applicable), then back to the 401k assuming its fees arent awful. You're right that most cant max the 401k, but many can max the ira and still have some leftover
How to max out your employer match 401k do you add the match plus your contribution equal to the yearly amount
When you mention fees, are you talking about specifically 401k fees or the fees from the funds?
Hey Dustin, I love all of your knowledge and thank you. I have a question. I'm thinking about contributing 80% of my check. Then taking a loan out on it. Which I'll only be charged $75. But take the loan out to get 70% of my check that I contribute. Considering it's pre-tax. I'll pay less taxes out of my check. Is this something I can do?
Great video. Everyone quotes the 10% "average" return of the market since 1928. Um, look at the S&P returns since 1998. Sucks.
Any thoughts on contributing a higher percentage to help lower tax burden now? This would be in addition to Traditional IRA contribution? This could save thousands of dollars if you fall into a lower tax bracket by doing so.
Why is 13.4 important?
I also hear advice of 401k for match, max Roth IRA, then with extras come back to max 401k. Is they still sound or what would be argument against that?
I currently invest in my 401k the same percentage that my company matches. I also put some in the roth 401k and I currently opened a Roth IRA with the same investment company. Do you recommend put money in both the roth 401k and roth ira or just one?
Thanks, Rich
Wow! Only 30% of people will only accomplish maxing out their 401k. I am really shocked to hear those statistics. Now I can understand why you suggest only contributing up to the match.
Read the book unshakable a few weeks ago, really opened my eyes!
So up to the match in 401(k) then Roth IRA. Where do you go when you max out the IRAs. We did this year so we turned back to the 401(k). Are you saying that we should move to a taxable account rather than keep the available Roth 401(k) tax shelter?
Sorry, I completely disagree. The company 401(k) plan is built for retirement, so I wouldn't conceive of touching these funds to begin with. If I knew I really needed monies for the future, I could reduce my 401(k) contributions to $0 a paycheck, and work with a larger amount thereafter. I've maxed out my 401(k) at my employer, and sure it hurts to see a much smaller paycheck after having $900 lopped off from it, but my AGI is far lower. And that not only means my taxable income is smaller, but I'm eligible for tax credits such as the lifetime learning credit right off the bat. And I get all the benefits of compounding interest by making painful sacrifices now, for the future. As for the fees, well, if you work for a large-ish company like millions of Americans, the brokerage firm that company is going with will probably be a big-name one (e.g., TransAmerica) that has great low-fee investment options (like Vanguard Institutional Shares) that make it even more worthwhile. I don't have $5 million in my Roth IRA with Vanguard to invest in their Institutional Shares, but the 401(k)'s employer pool lets me have that option. Oh, and my employer doesn't match a penny right now, since I haven't yet met a full year of employment here.
Dustin, this was awesome! Thank you so much. Really starting to understand and see why investing elsewhere is important!
what is the artist and title of your intro song?
Great video, Dustin. Although I might be an exception to the rule, you are definitely correct about 401k's. They rob their clients blind. I feel that I am an exception because in the TSP, my expense ratio is .033% (2017), making is lower than many, if not all, other 401k's, mutual funds, and even some ETFs. The only problem I have so far with the TSP is some of the withdrawal options, but that is supposed to get fixed over the next few years. All your other points are spot on though. Keep up the great videos. They are awesome.
I agree to max out your IRA first. However, as long as you got 1-2 year(s) of emergency fund, everyone should max out 401k. The earlier you do, the more you can invest your money. You will not be able to contribute more when you have a family, or even parents to take care of during your late 40s. I just think it is a bad advice to say not to max it out. It is a lot harder to find a good paying job in your 40s than in your 20s. Compounding tax free interest is better.
this is absolutely not true for everyone… and I feel like if you set up an IRA soley for the reason of liquidity, than you are 10 times more likely to pull it out early… definitely research your fees etc. but the harder it is to get to your retirement money the better in my opinion. this will force you to make it grow until your ready to retire. even in tough times I would really avoid going to that account. just keep consistently adding to it,and don't touch it until it's time… just my opinion