Started a new job and waived starting a 401k because I was sure there would be a crash in the markets and I would then...

>refuses 401k with match
>tries to time the market
>doesn't know about dollar cost averaging

Attached: 1527828413799.png (988x704, 66K)

JUSTing yourself this bad

If you’re living with parents still and expenses are low, stick it all in Roth. Use a MM fund as stated before if you want absolute lowest possible risk, your plan has to offer at least one.

Or you can be smart and dollar cost average into the account like every successful long term investor ha done. Use an s&p index or some kind of total stock market equivalent.

Is contributing to your 401k to get the company match, then immediately selling your position for cash legal? Seems like free money.

Forgot: if you are living on your own and want to reduce current taxes then use pre-tax contributions. If you’re in the living with parents situation there is no reason you can’t conceivably do 20+%/paycheck

free money hack discovered by quints
it's over for non-wagecucks

Beginning of the mega trump bull market

F

You cannot do this in most cases. Unless you have a withdrawal available (unlikely if you’re under the age of 59.5) you cannot just pull money out of a 401k without valid reasons like a hardship withdrawal which are heavily reviewed.

And if you could you’d likely lose money due to most defined contribution plan record keepers requiring 20% withholding before even talking about an early distribution penalty.

From what I’ve read online it says you can make an early withdrawal, without a hardship, for a 10% fee.
Can you elaborate on this. Not really sure what it means.

It ultimately depends on what your employer allows within their plan (it is theirs after all, they typically pay most of the expense, even if you still have a small fee).

An employer CAN offer withdrawals at any point from the account. They typically don't due to the fact that it's a retirement account, not a savings account. If you take a withdrawal from a 401(k), regardless of age, most major record keepers (the company that handles your 401 for your employer) require a certain percentage be withheld up front in federal income tax that they send to the IRS for you. If you are under 59.5 there's a 99.9% chance you're going to give an additional 10% of the income received from this withdrawal to the IRS for what they deem an "early distribution." This goes back to the idea that it's for retirement not just savings, it's a punishment for not saving for retirement because the gov't wants less people on SS.

tl;dr: Do not take withdrawals from your 401(k), do not take loans from your 401(k). If you do not already have 3-6 months in savings for emergencies get that set up first and then contribute to a 401

So they record keeper withholds what you owe for tax, that makes sense.
For simplicity let’s say you contribute 1k to your 401k and your employer matches it so you have 2k. Let’s say your tax rate is 25%. If you don’t make a contribution you are left with 750. If you make the contribution then withdraw, you are left with 1500 minus 10% fee of 200 = 1200. Minus a small record keeping fee and you’re still in the green.

In your example, yes. Your example is of a matching policy so extreme that it makes the scenario acceptable.

By the way you set up your example you have implied you have contributed an entire paycheck of 1000 (your comment of being left with 750 implies this). No employer will match you up to 100% of your contributions. A more realistic number might be 3-4%, I'll be generous and say 4.

Contribute: $1000
Matching: $40
Tot: $1040
Withdraw: $1040
25% withholding: $260
You net: $780
*Most record keepers will not require you withhold the extra 10 up front for the penalty, you usually take care of this when filing, let's say you do though*
Additional 10 withheld: $104
New net after all taxes: $676

The idea is to only contribute what the company matches up to. If company matches up to three percent, contribute three percent of your salary. In my earlier example, the thousand would be the 3% of your salary the company matches ie $33,333 salary per year.

u cucks need to read up on Roth conversion ladders

Then yes the situation works, because in the end this is the exact point of matching, giving money to 1) incentivize savings and 2) claim the match as part of a broader benefits package that allows them to pay lower salaries all things considered (this is key when not all employees participate in a plan or max out matching). Not to mention matching contributions are tax deductible by the employer so if more people do participate it still benefits the company.

Great option. For people who already have money saved in a tax deferred account. That wasn't the topic here though.

Putting money into an account you can’t touch for 40 years because “muh match” makes you a cuck

Company match is 100% gains guaranteed you nub