4 ms·

Why anyone would invest in a 401k now is beyond me.

• parsnips 11y ago
  I would think nowish would be the time to get money into equities.
  • toephu2 11y ago
    what do you think a 401k does behind the scenes?
    • parsnips 11y ago
      Depends. I have a money market option in my 401k account, for example.
      • calbear81 11y ago
        You should probably not put too much in that money market option (maybe as a rainy day fund).
• jrbancel 11y ago
  1) Taxes For example, an average software engineer making $150,000, contributing 10% to her 401k will reduce her taxable income to $135,000. At a 28% marginal tax rate, she will save $4,200 on taxes. 2) Free money If the employer matches 50% of the contributions, the employee will end up with an additional $7,500 on her 401k account. 3) Very few constraints It depends on the employer but she could be free to invest the 401k money as she wants. She doesn't have to put it in a specific set of funds. In a nutshell, she would get $11,700 more than if she hadn't used her 401k and is free to invest as she pleases.
• thearn4 11y ago
  Assuming you're young: far better now than later.