Whats a 401A retirment plan? and should I bend over and

[commander bunnypants]

take it like a man

CN

[commander bunnypants]

1. kick

:kick:

CB

[mike923]

2. It's an investment tool....

where one contributes a percentage of their income (i think capped at 20%) into a mutual fund(s). The money does not have to be taxed prior to going into the fund. Many companies offer a percentage match, so by not participating in this, you would actually lose out on part of your compensation package.

I started mine 7 years ago, and given historical rates of return and a rising rate of contribution on my part consistant with a rising salary, i should be able to retire at 59 and a half with 5 million in my 401K. Not bad for a kid who grew up well below the poverity line.

By all means, start you 401K as soon as possible.

[commander bunnypants]

3. thanks but 401A not K

CB

I work in nonprofut and already have a 457c

CB

[LSK]

4. actually its better to only give to the 401k till you match their matching

Roth IRAs are better because they are tax free when you retire. With our National Debt problems, who knows what tax rates will be 10,20,30 years from now.

[commander bunnypants]

5. sheesh

my company does not even match

CB

[LSK]

6. mine matches 500 / yr

[Common Sense Party]

16. Just as LSk says, then bag the 401k. There's no real advantage

to doing it. Start a Roth IRA instead. Call up Fidelity or Vanguard or some low-cost fund company and open a Roth and max it out ($4000 this year). If you still want to save more beyond the 4K in the Roth, THEN you can put $ in the 401. At least you'll get a tax deduction (whoopee).

[underpants]

7. I'm looking around on it

So far I haven't been able to find any INFORMATION there is however lots of people willing to sell me packages.

:eyes:

This really pisses me off. I just got vested two weeks ago. I don't want a defined CONTRIBUTION plan I want a defined BENEFIT plan I will do what I want with my money other than that.

[commander bunnypants]

9. I googled and found

a lot of teachers have it

[RebelOne]

8. I have one and it is a good thing.

If your employer offers a 401K, jump on it.

[underpants]

10. Not to argue but...

Our old plan was figured at 6% return and it got better than annually. I was going to receive as much in retirement as I do now.

401K are great and everything but our old system was guaranteed and it is tough to make 2% let alone 6+% in a 401.

I personally liked the security of the old system. Also the people who we think are going to administer it are boobs.

[mike923]

11. The old system...

the employer took the risk. The new way, the employee takes the risk. Risk leads to reward.

[no name no slogan]

14. That assumes the employee is a sophisticated investor

Employers hire professional money managers to manage their pension funds. Most employee-paid plans only offer a few mutual funds with little practical advice on how to invest, or even how markets work, for that matter.

It's just another example of the private sector shirking its promises made to employees. And another way for the private sector to make more money at the expense of its employees.

[commander bunnypants]

12. yep

aint to smart

CB

[DBoon]

13. all individual retirement plans

actually end up being replacements for the social safety net that Reagan eliminated in the 1980s.

Unemployed? Who needs unemployment insurance? Break into your retirement account.

Uncovered medical expense? Who needs government health coverage? Just break into your retirement account?

Pay for kid's college tuition? Who needs public universities? Open up that retirement account.

Of course, when you are really retired, you may find yourself in big trouble.

[LSK]

17. thats another thing about Roth, you can withdraw what you put in

You are only penalized on the earnings. So if you put in 1000 and it grows to 1050, you can take out the original 1000 anytime penalty free.

[Common Sense Party]

15. No such thing. Section 401(a) is the part of the IRC code

that eventually gets around to the 401(k) plan. A 401(k) is the type of defined contribution plan. Section 401(a) is where they start talking about those plans.