Okay…here:
Let’s say I make 1000 bucks per check.
If I have 30k in my 401k and…
Withdraw…my check stays 1000. But I lose the ability to invest the money I withdrew. To me this is no big deal because I’m only 24.
Loan against my 401k…my check goes down $200-300/pay period due to paying myself. Eventually, since you pay back the money, that money gets reinvested. I’ve already had one of these in the past (although it was small so didn’t affect my pay too long). A $20k loan against your 401k will kill your take home pay for a long ass time.
And I contribute before tax. Which is why I am 11000 f’in percent fine with having the IRS tax whatever it is I withdraw for my wedding.
I’m 24 years old. I have 40+ years left till I retire. I am hardly concerned about taking money out (AND paying taxes on it) at the moment.
If I was 40, 45, 50…then yeah, that’s another story. But at 24? It might as well be a savings account. But no…not to the IRS.
F’in uncle Sam. Pisses me off. I still don’t get why the IRS cares how I use my 401k. As long as I pay the necessary taxes on it when I withdraw it, what difference is it to them if someone wants to use THEIR ‘retirement’ money?
You know how long it would take to save up 30k? Years.
401k is about investments as you know. I’ve only put in like 5k into it and I have 30k in it now. By the time I hit 30…that money could be lost as well. I know a woman who is 55 who lost 80% of what she had when the market went down a year or two ago. 401k is HARDLY safe if you are in a target fund that is setup to be aggressive (as mine is because I’m really young). If you do a conservative one, you will hardly make any money.
That’s why at 24…a 401k isn’t that important. It will fluctuate so much that it’s hit or miss.
Again, I get what you guys are saying. But I only agree with it if the person is in the later part of their career. Not when they are 24. Most people who are 24 just finished school a year or two ago and don’t even HAVE a 401k yet.