# Should I contribute to my 401K? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [August 23, 2015, 9:30pm UTC](https://boards.straightdope.com/t/should-i-contribute-to-my-401k/728644 "2015-08-23T21:30:42Z")\ **Posts on this page:** 3\ **Page:** 3
**Author:** ![Bill\_Door](https://avatars.discourse-cdn.com/v4/letter/b/50afbb/32.png) [@Bill\_Door](https://boards.straightdope.com/u/Bill_Door)\ **Post date:** [August 25, 2015, 10:45pm UTC](https://boards.straightdope.com/t/should-i-contribute-to-my-401k/728644/41 "2015-08-25T22:45:37Z")
> [@bup](#): > > Sure. Could you expound on the nature of the poor management? Were people making financial decisions for you? Or just committing fraud by not putting money into the accounts when they were supposed to? All of the money ended up in the accounts eventually, but holding contributions to earn interest from the float was one of the issues. The primary issue was that the fees on lower paid employee 401k accounts were higher than appropriate, while fees on the deferred compensation plan, available only to higher paid employees who had restrictions on their retirement savings due to IRS limitations, were much lower, so that hourly employees were subsidizing the low fees enjoyed by management. Those deferred compensation accounts were only available to people who had compensation exceeding $245,000 in the previous calendar year. ---
**Author:** ![GameHat](https://avatars.discourse-cdn.com/v4/letter/g/ed655f/32.png) [@GameHat](https://boards.straightdope.com/u/GameHat)\ **Post date:** [August 26, 2015, 5:01am UTC](https://boards.straightdope.com/t/should-i-contribute-to-my-401k/728644/42 "2015-08-26T05:01:29Z")
> [@Dewey\_Finn](#): > > IMHO, you certainly should contribute at the very least to get whatever employer matching is offered. If, for example, they match 100% up to three percent, then the first three percent you contribute makes the equivalent of a guaranteed 100% return. Second, depending on your tax situation, additional contributions might make sense. Or you might be better off contributing to a IRA. It depends on your specific finances. But you should be contributing to some form of tax-deferred retirement account. (Edited to add, or perhaps make post-tax contributions to a Roth IRA.) Lots of decent advice already, I’m just going to second: If your employer matches 401(k) contributions, do (almost) whatever it takes to get this match. Assuming you have at least a halfway decent fund to invest said 401(k) money in, 401(k) + employer match is the best return you will ever see short of a lottery-ticket homerun stock. And you shouldn’t be betting on a homerun stock anyways unless you have plenty of money to risk and burn. ---
**Author:** ![Mama\_Zappa](https://avatars.discourse-cdn.com/v4/letter/m/71e660/32.png) [@Mama\_Zappa](https://boards.straightdope.com/u/Mama_Zappa)\ **Post date:** [August 27, 2015, 5:15pm UTC](https://boards.straightdope.com/t/should-i-contribute-to-my-401k/728644/43 "2015-08-27T17:15:57Z")
Jumping on the bandwagon of saying “contribute at least enough to get the matching contributions”. Bear in mind, you won’t be _vested_ in those contributions until you’ve been there a while - some companies are faster than required, but in general, you either get it all once you’ve been there 5 years, or you’re vested in 20% (or more) a year starting at 3 years (or sooner), and fully vested at 7 years. The legally-permissible times used to be a lot longer - e.g. 10 years. If your employer offers a Roth 401(k) option, it can be a very good idea to put money in that versus the traditional pretax version. Same benefits as a Roth IRA - but without income limitations. [Previous page](https://boards.straightdope.com/t/should-i-contribute-to-my-401k/728644.md?page=2)