5 ms·

> My main mistake was putting too much in my 401k Can you expand on this? I recently moved to the US and people keep telling me to get a 401k, but I haven't ye

• Izkata 6y ago
  A 401k is specifically a retirement account - you pay an extra 10% for withdrawing from it before age 59.5, which should add context to the rest of their paragraph.
  • T-hawk 6y ago
    Look up the 72(t) rule relating to a 401k. You can retire early and start withdrawals at any age without penalty, as long as you continue the withdrawals for sufficient time (the longer of five years or until age 59.5.) This fixes the "too much in the 401k" situation.
• sk5t 6y ago
  Less than full liquidity. If you get a decent matching contribution from your employer, it's probably worthwhile. Otherwise, it may be kind of a toss-up.
• lakis 6y ago
  At a minimum, you should save enough to your 401K to get the company matching. Let's say the company match 50% on the first 6% you save. So if you put 6% of your salary to 401k, the company will add another 3% in addition to what you did. That's a free 3% raise. Tell me another way that you can get guaranteed 50% return of your money. In addition, there is the tax advantage where you do not get taxed on your money until you retire. So you money grow without taxes until you actually need them. Are there bad 401k? yes, but I think very few. Check the rules of your company. But most of them are very good deals and you should take advantage of them if you can.