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Does your company offer a 401k matching program? If so, that is basically an instant 100% return. If they are not matching, then you might be right, but if th
by pyoung 9y ago
Does your company offer a 401k matching program? If so, that is basically an instant 100% return. If they are not matching, then you might be right, but if their is a match on the table, it probably makes sense to max that out.
- succstressful 9y agoThis advice is common. It should come with the caveat to investigate the vesting timeline for that 401k match. One of my former employers matched at a great rate, but that contribution did not vest until you had spent 4 years at the company. Given the rate of turnover at lower-seniority positions in the industry (PR agency), it was entirely unrealistic for more than half of the employees there to ever expect to see the benefit of that match.
- pyoung 9y agoThat is a good point. I did a quick internet search, and it looks like the max number of years for cliff vestings is now 3 years, which for most people is fairly reasonable. For gradual vesting, it looks like they can spread it out over 6 years, which seems a bit much, but at least you are vesting some of it over time. [1] https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-vesting https://www.irs.gov/retirement-plans/plan-participant-employ...
- komali2 9y agoHah, I should have mentioned, yea we have no matching. Good catch! We do have options though. Those will vest into millions... one day.... any day now....