Quick Question. My wife in her new job has a chance to sign up for a

[redirish28]

401K program.


We are concerned about actually putting in a stock market but she notice a couple bond options or at least what she things are bond options.

Oppenheimer International bond A

Maxim Loomis sayles bond portfolio

Maxim loomis short duration bond fund.


is this a better idea or should she forget the 401 K option?

[ColbertWatcher]

1. For now, I would recommend avoiding it. Try saving it instead. n/t

[Captain Angry]

2. See a financial adviser.

When you do, make sure you understand your investment horizon. If you're going to retire in 5 years, tax deferred investment might not mean a whole lot.

401k plans are an awesome way to save when used properly, and especially if there is an employer matching deposit.

If you have a long investment horizon, and you think the market's a mess, you could be buying in near the low.

[redirish28]

5. Her employer will match 50 cents to every dollar place in the plan up to 4% of paycheck

we are far from retirement.

[JeanGrey]

11. That answers my question. JUMP ON IT. She couldn't

get a better return. A fifty percent match is awesome, my company did 60 percent up to 7 percent.

Even if she only saved four percent where else is she going to get 50% interest? I'd put it in stocks.

[yellowdogintexas]

18. agreed, the matching is awesome and it appears to be $$ not company

stock which is even better.

I have two out there now, just perking along that had enough in them to let them stay where they were, and I had two smaller ones that I rolled into an IRA account. They go up, they go down, and even with losses on the market and in the plan, I am still ahead because neither of them ever went down enough that I was losing anything except the interest earned on the employer contributions.

How fast will they vest it at 100% ?? The earlier you get in the plan the sooner you are 100% vested.

Who is the plan manager? Call that company and talk with them.

[JeanGrey]

24. All good advice. I can't believe anyone would pass up a

50 per cent matching 401K. That would be like throwing money away.

[Captain Angry]

12. Cool deal.

That's not a bad match these days.

PS: Please see the PM that I sent you. :-)

[billyoc]

23. You'll never get a better return than that, from anything.

[Warpy]

3. If the employer provides matching donations for any of these

then they're all a decent bet. Yes, the market will continue to decline and bonds are in danger of default and that will continue until Stupid is gone and the suicidal deregulation of the past 30 years is overturned, along with Reaganism. However, having an employer match a small monthly donation and have the chance of having something in a few years is better than just taking the cash without the matching funds and ending up with nothing but maybe the memories of a few steak dinners and some broken consumer junk.

[Liberal In Texas]

6. Yes, if the company matches and you don't take advantage of it,

you're essentially throwing money away.

[JeanGrey]

13. You bet.

[DrDan]

4. is there a company contribution?

[redirish28]

7. 50 cents for every dollar up to 4 %

[yellowdogintexas]

20. she should take the smallest amount she can that will get the maximum

$$ the company will match..does that make sense???


at a minimum.

She can actually do up to a certain $$ amount per year, but the employer's cap is 4% of her gross. So she should do whatever she can to contribute enough to get that 4 percent tucked in there every single paycheck.

Also, remember this: When her W-2 comes in January, her taxable income is reduced by the amount contributed to this fund and all the insurance premiums.

and the flex benefit...that is a good one too if well managed by the employee.


I am a missionary for the flex benefit.

[JeanGrey]

27. Well most financial advisors want to see you save at least

ten percent of your salary and up to 17 if you can, for a comfortable retirement. I always saved the max, at the end I was putting 17 percent in, 200 bucks a week, about ten grand a year. And boy did it grow and grow and grow.

[yellowdogintexas]

29. oh I always take the max, and since I am over 55 I added the

over 55 catch up with my last job. They didn't match all of that of course but I was putting away a nice amount, and I have every reason to believe it will begin to earn nicely again.

[JeanGrey]

30. I am now disabled and struggling with a transplanted liver

and stage four cancer, and you know where that is going.

However I managed to hang onto my life insurance policy (over 300K) and my 401K which will totally be there for my husband when I am gone. Our house is paid for and I want him to not have to worry about money ever. He will also get my pension. Not that large but he won't want for anything.

That is what keeps me going, thinking of him maybe cruising around the world or doing good things and living a good life.

[DrDan]

21. then I would definitely get in

how can you go wrong? The company is providing a 50% match.

[Breeze54]

8. How to Choose a 401k Program

How to Choose a 401k Program

http://www.ehow.com/how_14740_choose-401(k)-program.html

By eHow Personal Finance Editor

Many employers offer a choice of 401k plans--usually a group of mutual funds, all run by one large company. Get to know as much as you can about mutual funds and investing. As you learn more, your strategy for allocating assets might change. Don't hesitate to change your monthly 401k allotment to a new mix of stocks, bonds and other investments to reflect your changing views.

Instructions -- Difficulty: Moderate

Things You’ll Need:

* Financial Calculator http://www.ehow.com/shop_financial-calculator.html

* Wall Street Journal: http://www.ehow.com/shop_wall-street-journal.html

* Personal Financial Software: http://www.ehow.com/shop_personal-financial-software.html

* Paper And Pencils

* Brokerage Accounts

Step1 - Read the 401k plan prospectuses and brochures provided by your employer.

Step2 - Note the annual returns, investment strategies and goals of each of the funds.

Step3 - Understand the differences among the various funds.

Step4 - Decide what your investment goals and priorities are.

Step5 - Get to know your own appetite for risk. An aggressive-growth stock fund will be riskier
than a bond fund, although the stock fund is likely to provide greater long-term returns.

Step6 - Study different theories of asset allocation. Many investors use a life-cycle approach to investing,
taking higher risk in their 20s and 30s, and backing off from risk in their 50s and 60s.

Step7 - Divide your contributions among funds in a way that reflects your goals and your appetite for risk.

Step8 - Avoid putting all your money in one or two funds.

Step9 - Avoid putting all your money in stocks. Even if you're young and you aren't risk-averse,
put at least 10 percent of your funds in bonds.

Step10 - Make sure you take full advantage of your employer's contribution to your retirement plan.

It might be the easiest money you'll ever earn.

[redirish28]

10. Thanks for the advice. I'll have her look at it.

[Breeze54]

14. When I had my 401K, I divided it between stocks and bonds...

as I recall. It's been awhile but the HR Magr. was very good at explaining it.

Don't forget to tell her to leave 100% to you!

[JeanGrey]

26. I never did bonds. I still thik them a lousy investment.

Did much better in mutual funds and mostly stocks.

[JeanGrey]

17. Stocks are fine. Make sure she diversifies. With that many

years to go, I'd put at least fifty percent in agressive risky stocks and spread the rest between moderate risk and no risk.

I started in 1986 and have put 30K of my own money in over 20 years. You wouldn't believe how much it is worth now, even with the stocks low right now.

[JeanGrey]

9. Does the company match any part of her savings? And how

long does she have to retirement? I she has more than 10 or 15 years and the company does any match she'd be nuts not to. You can't get a better return anywhere.

[tammywammy]

16. ditto

[yellowdogintexas]

22. HI there!!!!

:hi: :hi:

[Muttocracy]

15. I second the question about the employer match

For me, it makes my overall pay significantly higher than my salary, even though I'm putting some of my own money in.

I don't know much about retirement accounts, but from my recent experience...

Pay attention to whether you can move funds around later. I put some of my money into funds where I didn't know I couldn't switch them to another type later (which turns out less of a problem than I thought, since the more conservative fund they're in is actually doing better these days).

If money is tight and you're worried about needing it in a pinch, look into whether that particular plan allows you to take out a loan. The way my plan worked, I was able to take out a loan, with some of my funds held as collateral in case I defaulted, but the interest rate was much lower than an emergency credit card situation, and it doesn't even show up on my credit report.

And get more professional advice than us here ;)

[Xithras]

19. Actually, it's NOT a bad time to start investing in the market.

Many parts of the market are scraping along the bottom and don't have anywhere to go but up. Especially in the financial sectors, you have stocks trading today for 10% of what they were just a few years ago. Unless you're a pessimist and think that the market will NEVER recover (in which case you shouldn't be investing anyway), these stocks will eventually recover much of that value. Washington Mutual is a great example. $40 a share in 2003. $3 and change today. Even if it only ever makes it back up to $21, half of it's 2003 value, a $5000 investment today would yield $35,000 when you sold. I won't bother guessing whether that will take two years or ten, but it'll happen eventually.

[JeanGrey]

25. It's an awesome time.

[galileoreloaded]

28. No. No. No

Modern humans have a TERRIBLE habit of assuming that tomorrow will look like today. Tomorrow, actually about October/November will not look anything like today.

Look at this and understand it.


http://bp3.blogger.com/_rWY3qGfe6gc/SI1dtCRoXGI/AAAAAAAAA5o/FCp7-0EiyKI/s1600-h/Picture+1.png

Don't worry about 50% match, as we haven't even started to socialize or "monetize" our debt yet. Fed has burned about 40% of their Treasury holdings to date, and when they hit 90% here comes hyperinflation because they will repudiate or fire up the presses to pay off the Asians. That 50% match is going to seem like a pittance, and you will wish you had no debt and more food.

This is historical FACT. This cannot be stopped. They don't know how to. Greenspan/Clinton, Greenspan/Bush, Bernake/Bush can't stop the inevitable.

You (we, us) need to understand this very soon. We are 1.5 times more over leveraged as a country than we were in the events leading up to the great depression. There will be no 401K, Social Security, Medicare, etc. It is GONE. For most of you this is very shocking, but it is a reversion to the mean and actually inevitable in its very nature.

Pay off your debts, if you have extra cash, hard currency funds or hard overseas currencies are best, stable countries like we used to be. Swiss?? Brazilian?? Ticker (MERCX) is a great hard currency fund.

The Pollyanna stock broker crowd make 100% of their money by every allocated purchase you make and have NO vested interest in whether you make money, only that you trade so they get fees.

Flame suit on.

[TexasObserver]

31. Here's a simple general guide: Buy stocks if you think the market is going UP.

Buy bonds if you think the market is going DOWN.

Bonds throw a steady stream of revenues, and therefore grow your account at an easily identifiable rate.

Stocks are a crap shoot. They float as the market goes up and down, and then some have the prospect of significant losses (or gains). If you like risk, buy stocks. If you want to make sure you never have fewer dollars in value, buy bonds.

Make sure they're safe bonds. If you buy some 9% bond, you'd better know it's going to be good. If you buy good bonds, rated bonds, you're probably safe.