4 ms·

That whole "get the match from an employer at all costs!" is, imo, silly in its own right for many many many folks. I did that at one point for a bit, then...

That whole "get the match from an employer at all costs!" is, imo, silly in its own right for many many many folks. I did that at one point for a bit, then... realized later that if you're fired or quit... that money isn't really there anyway. Most of the time (ime), there's a multi-year vesting schedule, and you don't have control over how long you'll be at a company. IF you're already getting the full value, perhaps, but I've never worked anywhere long enough to get that. I got $x 'matching', but only 25% of that was vested in the first 20 months (after 2 years, it would have been 50% IIRC) but... only that 25% was available to 'rollover' when I left the company.

deleted 5y ago
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cma 5y ago
Some vest right away. Even when they are 25% per year you can often take an immediate 401K loan from half of your part of the contribution and pay the car loan and still probably have it work out more optimally (even if you then have to turn that into a withdrawal with penalty). If you can play something like magic the gathering and do basic estimates odds of things happening and payoffs/penalties, you can do better than taking blanket advice from Ramsey. It's not do it at all costs. Work out the basic numbers. It doesn't always make sense at extreme interest rates, but he tells you to do it as blanket advice even if the debt is low interest student loans and the employer contribution vests right away. I've heard people call in with questions like this I think with student loans. He tells them to basically throw away $5000 to save $250.
- mgkimsal 5y ago
  one of his standard lines is "if you play with snakes you'll get bitten". what you've described is, of course, technically doable. many of his listeners may be in jobs that are less stable, and finding another job may take time. 'blanket advice' when you're talking to tens of thousands of people probably needs to be as basic and as applicable across the board as possible. I do think there's a psychological impact of "grind through it and stick with a plan" that will help create better habits and avoid future debt problems for many folks. Playing a lot of 'move money around' moves gives people the idea that they can always do that, and that's not always the case. I've never been employed anywhere (nor have I met anyone) who has 'day-1' 401k vesting. Good on you if you have that, but it's nearly always been 3-4 years every place I've been (or my colleagues have been).

deleted 5y ago

[deleted]

cma 5y ago

Some vest right away. Even when they are 25% per year you can often take an immediate 401K loan from half of your part of the contribution and pay the car loan and still probably have it work out more optimally (even if you then have to turn that into a withdrawal with penalty). If you can play something like magic the gathering and do basic estimates odds of things happening and payoffs/penalties, you can do better than taking blanket advice from Ramsey. It's not do it at all costs. Work out the basic numbers. It doesn't always make sense at extreme interest rates, but he tells you to do it as blanket advice even if the debt is low interest student loans and the employer contribution vests right away. I've heard people call in with questions like this I think with student loans. He tells them to basically throw away $5000 to save $250.

mgkimsal 5y ago
one of his standard lines is "if you play with snakes you'll get bitten". what you've described is, of course, technically doable. many of his listeners may be in jobs that are less stable, and finding another job may take time. 'blanket advice' when you're talking to tens of thousands of people probably needs to be as basic and as applicable across the board as possible. I do think there's a psychological impact of "grind through it and stick with a plan" that will help create better habits and avoid future debt problems for many folks. Playing a lot of 'move money around' moves gives people the idea that they can always do that, and that's not always the case. I've never been employed anywhere (nor have I met anyone) who has 'day-1' 401k vesting. Good on you if you have that, but it's nearly always been 3-4 years every place I've been (or my colleagues have been).