Need some advice from the investing gurus
from buzzed bait  
10/10/2008 10:04:18 AM

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I just recently came into the work force and now have the oppurtunity to start a company matching 401K plan. However, all I hear from around the office is how people are losing there money just as fast as they can put it in there. My question is this. Up until now I have been just saving money in a standard savings account until the the 401K was available. I know all the tax benefits and company matching benefits but with the way these are losing might right now, would my money be better served going into my savings account for the next couple months until things smooth out economically? Or should I be taking full advantage of the 401K even though they are dropping like a stone? Thanks for the advice

BB

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   Buzzed from PPEN  10/10/2008 11:15:51 AM
 If you have read what is posted on this board you have some widely varying opinions regarding investing.

The 401K program is great for young folks IF the matching percent from the company is significant. Otherwise you might want to look into using the Roth IRA.

If the 401K is acceptable to you it is a great way to use dollar cost averaging. Doing this over a 30 or 40 year working career could well make you a wealthy man when you retire.

I am purposely not defining the terms I use. Do yourself a huge favor and read up on the things I mentioned. Simply use Google to learn more. Don't mean to make it hard for you but you need to learn the language.

Investing can make for a much less stressful life if you are disciplined and learn how it all works. Having a nice big nest egg is a wonderful backup which will give you many options in life.

I will answer any specific questions you have. I definitely don't have all the answers but have learned a lot of things which DO NOT WORK!

Good luck.

PPEN

   What investment options does the company give you? from bigL62 #13853  10/13/2008 1:22:56 PM
 Right now if you are worried about the stock market, pick a money market fund. You can switch later usually. Stocks are cheap right now though.

   money market from MikeF  10/15/2008 3:16:01 PM
 You would be missing a lot of benefits by not taking advantage of the 401K. For example if your company had a 50% match for every dolar you put in you would immediately double your investment.

Math: $1.00 pre-tax costs you about $.75 out of your take home pay. If your company matches 50% then your dollar is now $1.50 so for $.75 out of pocket you now have $1.50 in your 401K. Even if it never earns a dime you're ahead.

If you're concerned about the market you could select a money market fund but I would go into a couple of diversified mutual funds.