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Thread: Free money in IRAs & 401k?

  1. #1

    Question Free money in IRAs & 401k?

    I can sign on to my employer's 401(k) soon, and my employer is offering matching funds up to 3% contributions. Do I make money by contributing up to the 3% to get the matching funds if I decide to do an early-withdrawal right away? Thanks for anyone's advice!



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  3. #2

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    I bet there is a vesting time before you can withdraw $ and get that matching 3% company contribution.

    Sounds like a good deal if the company is solid AND can last 'till you retire AND you stay there 35 years or 'till you reach retirement age (67.5 yrs old?). Otherwise money is stuck there because of tax situation, early withdrawl penalty, etc.

    Unklikely to hold up to the test of time these days (unless the company has its own gubermint teat to suck upon) ...so it may be better to grab the cash and run for hills.

  4. #3

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    Quote Originally Posted by ImpeachKingGeorgeII View Post
    I can sign on to my employer's 401(k) soon, and my employer is offering matching funds up to 3% contributions. Do I make money by contributing up to the 3% to get the matching funds if I decide to do an early-withdrawal right away? Thanks for anyone's advice!

    Is there a vesting schedule or are you immediately 100% vested?

    You can only withdraw your money if you quit unless your plan offers hardship withdrawals which are usually for medical or some other dire need which is spelled out in the plan's legal document. If you do quit and take your money, you are hit with a big penalty which would negate your employer's match anyway.

    Go ahead and contribute the 3 percent and get the match. Even if you don't trust the market you could invest in a stable value fund and know you are at least getting 100% return (employer match). You won't even notice 3 percent pre-taxed dollars missing from your paycheck. It's income you don't give to the government.

    Keep your money in and forget about it. Don't move your money around too much because in these $#@!ty gubment managed economic times, you'll be realizing losses and you don't want that.

    Saving is the key to wealth






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