Since I still work for a bank I made some shocking discoveries I wanted to share and help others if they end up saving for their future.
FIrst off many jobs match what you put in your 401k and to a point. This money is taken out of your monthly pay before anything else, even taxes and can help put you in a lower tax bracket. I put 100 in mines each check and after taxes that really only lowers my check 74 bucks. Then also my employer matches 5% of that.
I don't play the market, I have it in a stable cap fund. It earns as much interest as our savings accounts .000001%
. At least it wont loose money or charge me any fees.
Then many jobs will let you borrow from the money if you need it for a low rate and the interest you pay goes towards your savings. Of course it takes it from the pool that could be invested in high return investments, but I rather take 5% vs being concerned about the price of tea in China.
Ive done this for 5 years now and have already bucked the average in what many have when they retire. Ive helped a few co workers setup too and change their investments.
I had one co worker who lost 400 bucks over the past year from a bad choice. I helped her and called the investments company on speaker with her. Turns out she just setup the account and did not pick any investments, so they put her in one.
They do this for all their new account holders by default. The investment is an institutional one that has a 8 million buy in.
I guess you can guess my question to the representative. If this is the option for all new account holders and it has an 8 million buy in meaning the volume is low, why was it loosing money. He couldn't answer that.
Now I have fun telling my coworkers how much they make. They come back and tell me how much was deducted and if that was right. I then ask they what % did they pick. Soon as they tell me I do the math and say out loud YOUR CHECK WAS FOR....
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401k general info-retirement savings
