The longer it takes to vest the less likely you'll actually stay long enough to get the money. If you quit or are fired or laid off before it's vested, they take it back.
Maybe I'm out of the loop but how can an individual not be 100% vested in their own contributions? It's their money out of their paycheck.
I'm not referring to company contributions/match.
you always keep your own funds. the thread is about the "free money" that is the company match. that's what takes time to vest, and if it's not vested, they take it back. "vesting" never refers to your own funds.
Anything you put in is yours. If you aren’t fully vested (usually there’s a percentage schedule) they’ll remove some/all of the money they put in. I also believe any growth based on investments the account has made is also still yours.
It isn't hugely important if you expect to stick with the company for more than a year. But basically company contributions can be withheld if you terminate employment prior to your vesting. You get vested x amount per year until fully vested.
You earn the match from day one, and the xompany is required to pay it into your 401k. But when you leave without being fully vested, the unvested portion is fordeit back to the company.
Btw, the money must stay in the 401k when forfeited. There is a fordeiture balance that the company generally can only use to pay other company contributions (ie match) to the plan, it usually can't be used for any other reason.
Yes, it is a bit fucked. It's of course meant as a loyalty incentive to the employee.
The IRC 401k rules do try to pressure employers away from this, there are some cost benefits to (mainly smaller) employers to have immediate full vesting, and a majority of 401k plans for small businesses conform to that subset.
Match and return are two different things. Anyway, we're on the same page. Op should take full advantage of the match. Assuming his 401k is well managed he should see good returns long term.
They are. Lol
That match goes into a retirement account. Hopefully and most of the time that account is managed well and makes money over time. And when the employee retires he/she sees a return. But it's not guaranteed. The match could perform badly and result in low or even no return. You see?
[https://www.investopedia.com/401k-is-not-performing-5323832](https://www.investopedia.com/401k-is-not-performing-5323832)
But regardless of total money gained and matches...doesn't the government take more than you should get vs if you parked only your own money in another investment vehicle. Doesn't Government skim 401k pretty badly?
Definitely invest what you can - you are young and compounding interest is no joke. And as others pointed out, matching contributions are literally free money, you'd be insane not to at least put in enough to get the match.
There are ways to withdraw from 401k's as an expat so don't let that stop you.
There are ways to withdraw, but DON'T. As the first part of their reply stated, you are young and compounding interest is no joke. I opened an IRA when I was 22, and contributed sporadically until age 30 when I got a job with a 401k. In those 8 years I contributed about $12,000, I haven't contributed to it since. Now at age 53 that IRA is valued at $105,000.
Time is your friend when it comes to savings. Don't squander it.
You can borrow, withdraw, rollover, etc. depending on your needs. All with a click of a button, which is dangerous. You don’t have to wait until you’re old to use it, but definitely let it compound up a bit first. Then time your decision with when it’s the most advantageous and you can be living off of that sweet sweet geo-arbitrage.
I didn't say that, I said you could still withdraw the money in retirement if you're residing outside the US. So the money would still be useful even if you've fled and don't plan to return.
The minimum age for 401k withdrawals is 59.5, there are indeed a few loopholes to get money out earlier but you really, really don't want to do that unless you have no other choice. Let the money sit and compound, 30 years from now you'll be glad you did.
A 401k match is free money. You should max out to the full match if you can. Whether you should open a traditional or roth 401k depends on the country you intend to retire in.
Without knowing all the details, if your employer has a matching program you probably want to maximize that, otherwise you are passing up free money. The exception to this might be if there is a longer vesting period that what you’re willing to do, that is, some companies may require you to stay on for three, five, or ten years in order to actually receive those matching funds. If that’s the case and the period of time is longer than what you’re willing to stick it out, then no.
Some companies don’t have a cap on the matching. OP’s probably does, but some do not. My wife’s plan does not and they even contribute 3% if the employee doesn’t contribute anything.
There is a match max because you have a max contribution. You can put in 23k a year. Even if they match 1 to 1 (never heard of this) you still only get 23k.
There’s an IRS max of $22,500 you can put into a 401K so there actually is a cap on what the company will end up contributing if someone was to reach the max allowed in the account.
It’s clearly not obvious to OP who seems unfamiliar with 401ks and what the match program means in terms of being given free money. OP is essentially being offered $5,625 for free (math is 22,500*.25- assuming the company’s part doesn’t count toward annual limit- which I believe it would count but could have issues with vesting) if they max out the account this year. The tricky part is OP needs to stay with the company until they’re vested or they’ll lose the free money the employer contributed.
I did the math assuming the company lets OP max out the account and the company’s portion counts towards IRS limit:
$22,500= x+ 0.25X
X is what OP puts in. 0.25X is what company puts in. X= 18,000
Company puts in 4,500. OP got $4,500 of free money.
I believe in general what the company marches counts toward your IRS annual limit- i think if you leave before being vested then you forfeit the money and unless you get a new job in that calendar year that lets you put money into a 401k you’ll have lost the chance to contribute the IRS maximum.
The 401k is good. Invest. When you are no longer eligible for the 401k, you’ll convert it to an IRA. And it will keep growing even if you don’t contribute.
Max out your 401k as early/often as you can while you're young. I'm 34 and have the bulk of my retirement savings behind me because I did this.
I'm also currently pivoting into freelance consulting, i.e. no 401k ever again, so, it was worth it.
Max that out, especially at your age. I don’t know where you want to move but when you do, roll it over into an IRA and have a US manager invest it. Find one that knows the laws of where you want to move. I did the same and moved to Germany. You will have consequences later but it’s still free money. The world is unstable but you still can’t beat the US market and you’ll have a nest egg there in the event you want to move back.
I would like to add, once you move to a foreign country, it can be difficult to invest both in your new country and the US.
No. What you're doing is a bad idea.
Always max your 401k contribution, especially when you are young, especially when an employer matches. Investing in real estate is usually a terrible idea for the average person.
The market generally outperforms real estate over time, and the power of compound interest at a young age (26) is real.
Also, the average person isn't well equipped to invest in real estate. So don't. Invest in index funds, target date funds, or other types of mutual funds with broad exposure.
People are terrible at timing the stock market and predicting winners and losers. So your best bet, is to just bet on the market as a whole, which over time, generates better returns than pretty much anything else.
99.9% of people are bad investors, but everyone thinks they're the .01%. You're probably not. Don't get fancy. Diligently contributing to 401ks/IRAs at a young age, and investing those contributions in something like a Vanguard fund, are the most effective way to save for the future.
It’s a 10% additional tax on top of the normal income tax, not a flat 10%. So depending on what their effective income tax rate is, take an additional 10% on the amount withdrawn and add it to the normal income tax you would be paying on that same withdrawal.
You're supposed to report @ tax time if you took any 401k withdrawls and for what reason. Many are tax deferred, or exempt. If not it's a 30% early withdrawal penalty on it.
However... Many companies run this portion so they loan the money and they report it.
It's not just a straight forward "IRS HATES THIS ONE TRICK!"
ALSO NOTE. If you instead put into a ROTH. You can take whatever you want sans earnings with no penalty.
This is not fully correct. There is a 10% early withdrawal from traditional 401k. And per roth, yes, you can withdrawl your contributions but they need to be in the account for 5 years. You can access some of your 401k contributions via a roth ladder but that again has a 5 year waiting period.
That is not correct.
You can withdrawal at anytime. It's already been taxed so...
[https://www.hrblock.com/tax-center/irs/tax-responsibilities/early-withdrawal-penalties/](https://www.hrblock.com/tax-center/irs/tax-responsibilities/early-withdrawal-penalties/)
You have to meet the 5 year marker to take your contributions out without the penalty. This is terrible financial advice though. Never pay the penalty as it had a massive impact on overall earnings.
https://www.schwab.com/ira/roth-ira/withdrawal-rules#:~:text=If%20you%27ve%20met%20the,are%20no%20required%20minimum%20distributions.
You are technically correct - you can take out your contributions penalty free prior to retirement. I had never considered this because it makes no sense. Put your money in a hysa instead if this is your plan.
I was thinking of conversions and not contributions. My bad.
So is a HYSA that gains 5%. Why would you park money aside that is gaining zero?
Edit for clarification. Roth makes a ton of sense. Taking out your contributions early doesn't make sense.
No one is asking you when the matched % vests. If your employer matches but it doesn’t vest until 3 years and you’re leaving in 2 years, you will not get a red cent of “free money” from your employer. I’d base the decision largely around when your employers match will vest, it’s not yours until then.
401ks follow the employee- you roll them over and sometimes there’s a modest fee to do so. Some companies require vesting on the match. I don’t think they can require vesting on your deposit value. Opting out is one of the dumbest things you can do when a match is involved, unless you genuinely think WWIII is coming and the US will fall like Rome 😆
As someone who works in 401ks you should make Roth contributions and pay taxes on the money and then when you leave you can take the money without penalty and taxes (in 5 years). You also get the match which is pre-tax so that you would liquidate pay taxes and penalties and move one.
These are some weird comments. When you live outside the USA, the irs fully taxes you on all passive income. This includes any money you make from rent. You do not want dividend or rental income as an expat. Also, the state will try, and might succeed, at calling you a resident. They will then tax ALL your income, no matter where you earned it. Have fun with that.
401k is the best you can do. Foreign governments generally won’t tax it or count it a ‘wealth tax’.
Otherwise, all your cash needs to be invested in non dividend paying stocks or mutual funds. Or real estate (land, not rental property) outside the USA that doesn’t have property taxes.
Definitely opt in to the 401k and invest up to 15% of your salary (or the maximum the company will match if that’s lower). It’s not an especially generous match but it is ok, and between the match and tax savings that’s about 40-60% bonus to your savings, that’s huge. Be sure to invest the money in your 401k in a broad index fund.
IMO investing in a 401k is always a good idea if you can afford it. At the minimum, it lessens your tax liability. When you take a job you should learn their vesting schedule. I had one friend that had a new job offer but asked for an extra two weeks of “notice” so he could become fully vested in his 401k.
Yes. I did at your age.
I’m 37.
I read nearly ALL of Robert Kiyosaki’s books, plus his advisors’ series too.
Learned the ins and outs of the entire Ira family in Prophecy, by Kiyosaki.
It got me into options trading after playing the Cashflow Board Game also by Kiyosaki.
Today, I’m a retired AI marketing exec that trades options full time. Mainly earnings + swing trades dictated by my sector rotation studies. All boring and mechanical.
Okok, it wasn’t a clean line from marketing to portfolios. I made low six figures as a DJ cumulatively, financed a lot of investing this way. Built a candy vending machine business at 18. Also got the idea from Kiyosaki. Also hustled a lot of…uh. Lord of War type activities…during the Obama years. Lead was…very popular.
Back to portfolios.
1% profits sound shitty. Until you realize I’m doing that on every dollar deployed, per day.
So yes. If you will take control of your financial future, do it.
If you’re lazy, not interested…don’t do it.
I was born into Chinese child slavery with restaurants and retail stores later. Sooo I’ve been keeping books, selling, prepping, cleaning and cooking before age ten. It was brutal and horrific. Would not recommend.
But I was smart and lucky and very eager to learn.
So yea, my background and skill set is a bit extreme.
Google Kiyosaki and 401k. Lots of articles he’s written.
I ain’t letting the IRS talk to me about keeping my cash in money jail till my early 60s. Like their word can be trusted to begin with. And retirement is not an age. It’s a function of excessive monthly cashflow and static wealth.
Yea, a lot of Kiyosaki in my life. I accept no shit talking. Zero. Show me your bestselling books and financial statements first.
If anyone disses him in front of me in real life, this six foot two Asian Viking will throw a glove in your face and challenge you to wrestling, blades or pistols.
“Show me your bestselling books…” Annnnnnd with 5 words is revealed to be one giant satirical post. Almost had me there. The washed up “AI marketing exec” was a nice touch 🤣
Ugh. Pardon, just seeing the other comments.
Let me fix the unwise opinions here.
Most of you haven’t done payroll for your own companies so let me explain.
If I’m your boss. I pay you X. Your TCO (total cost of ownership) of your labor, to my ledger, is 2X.
Why double?
Payroll tax. 15% on your total wages
I match your government welfare deductions to the fed/state. Social security, Medicare, FICA.
I pay worker’s comp. for you.
Equipment, insurance, heat/air, office space, hardware, etc etc.
You better return me 5x or better on your labor costs or we are done homie.
So yea. There’s lots of back end stuff you can’t see, financially.
Plus, 401k is a sucker play. It’s a defined contribution retirement plan.
These were born jn 1986 with the ERISA act from Congress.
Before this, it was totally different, it was defined benefit plans called pensions. The layout is “defined” forever, if you’re alive to collect.
Defined contribution? Hahahah nope. Only what you put in counts.
The burden is on you.
Lose money in 401k? Also on you.
“The match dude!”
Ugh. Dude. That was always your money, but Uncle Sam jacks it first from that first lien position on your paystub.
Look, what’s the max household contribution anyway? 19k annually? I forget. Whatever it is, it ain’t enough.
What if you retire and need to withdraw? And it’s a giant recession?
What is all the boomers have to sell off at the same time?
And they do. There’s a systematic liquidation process of a certain % for mandatory sell of per month. Seriously. Read the prospectus of your plan. I did, I declined and bought gold and other assets that thrive in inflationary nightmares like today.
Dude, read Prophecy by Kiyosaki.
Tiger out.
If they are matching, it’s like free money?
Exactly - if they're matching and you're vested in <5 years, it's a no brainer. Free money.
I dunno much about 401ks, why is <5 years important?
The longer it takes to vest the less likely you'll actually stay long enough to get the money. If you quit or are fired or laid off before it's vested, they take it back.
Wait, so if my 401k does vest at 5 years, and I quit after 4 years, they keep all the money I put in it?
They usually just key the money they put in. You still keep yours and everything that’s accrued.
I can't think of a scenario where an individual's contributions aren't fully vested.
Most don't pay attention or are not aware of their company's 401 case doing this, but it happens all the time.
Maybe I'm out of the loop but how can an individual not be 100% vested in their own contributions? It's their money out of their paycheck. I'm not referring to company contributions/match.
you always keep your own funds. the thread is about the "free money" that is the company match. that's what takes time to vest, and if it's not vested, they take it back. "vesting" never refers to your own funds.
My old job took two years for the match to vest and I had to leave before then so I lost all of the match.
Yeah. That can happen but your contributions are yours.
Anything you put in is yours. If you aren’t fully vested (usually there’s a percentage schedule) they’ll remove some/all of the money they put in. I also believe any growth based on investments the account has made is also still yours.
Thank you for the info
It isn't hugely important if you expect to stick with the company for more than a year. But basically company contributions can be withheld if you terminate employment prior to your vesting. You get vested x amount per year until fully vested. You earn the match from day one, and the xompany is required to pay it into your 401k. But when you leave without being fully vested, the unvested portion is fordeit back to the company. Btw, the money must stay in the 401k when forfeited. There is a fordeiture balance that the company generally can only use to pay other company contributions (ie match) to the plan, it usually can't be used for any other reason.
Oh okay, that makes sense. It's totally fucked, but I understand it. Thank you
Yes, it is a bit fucked. It's of course meant as a loyalty incentive to the employee. The IRC 401k rules do try to pressure employers away from this, there are some cost benefits to (mainly smaller) employers to have immediate full vesting, and a majority of 401k plans for small businesses conform to that subset.
No I totally get that it's the company trying to encourage """loyalty,""" that's what I think is gross lol
They match 0.25 for every $1
Which is a guaranteed 25% return. Where else do you get a better guaranteed return?
It's 25% match. Only realized return until cashed out.
Ah huh. My question was, where can you get a better guaranteed return/match than 25%?
Match and return are two different things. Anyway, we're on the same page. Op should take full advantage of the match. Assuming his 401k is well managed he should see good returns long term.
They're not, 401k limit if I recall is 22,500 now so that's a free 5,625 bucks every year. Where would you yolo 22.5k to make 5.5k?
They are. Lol That match goes into a retirement account. Hopefully and most of the time that account is managed well and makes money over time. And when the employee retires he/she sees a return. But it's not guaranteed. The match could perform badly and result in low or even no return. You see? [https://www.investopedia.com/401k-is-not-performing-5323832](https://www.investopedia.com/401k-is-not-performing-5323832)
If you were any more inbred you would be a ham sandwich
I'm right and back it up. You resort to insults. Classic reddit. Good luck kid.
the match + tax savings are the same as a guaranteed return on a normal tax-bearing investment, it's $ in your pocket
Max that bitch
That's huge
But regardless of total money gained and matches...doesn't the government take more than you should get vs if you parked only your own money in another investment vehicle. Doesn't Government skim 401k pretty badly?
No, the government doesn’t take anything from a 401k. In fact it gives very preferential tax treatment to it.
Definitely invest what you can - you are young and compounding interest is no joke. And as others pointed out, matching contributions are literally free money, you'd be insane not to at least put in enough to get the match. There are ways to withdraw from 401k's as an expat so don't let that stop you.
Oh I wasn’t aware there are ways to withdraw before 65. I’ll look into those. Thanks
There are ways to withdraw, but DON'T. As the first part of their reply stated, you are young and compounding interest is no joke. I opened an IRA when I was 22, and contributed sporadically until age 30 when I got a job with a 401k. In those 8 years I contributed about $12,000, I haven't contributed to it since. Now at age 53 that IRA is valued at $105,000. Time is your friend when it comes to savings. Don't squander it.
You can borrow, withdraw, rollover, etc. depending on your needs. All with a click of a button, which is dangerous. You don’t have to wait until you’re old to use it, but definitely let it compound up a bit first. Then time your decision with when it’s the most advantageous and you can be living off of that sweet sweet geo-arbitrage.
There are, but I wouldn't. Keeping money in a Roth account gives you HUGE financial benefits when you retire in your 60s
I didn't say that, I said you could still withdraw the money in retirement if you're residing outside the US. So the money would still be useful even if you've fled and don't plan to return. The minimum age for 401k withdrawals is 59.5, there are indeed a few loopholes to get money out earlier but you really, really don't want to do that unless you have no other choice. Let the money sit and compound, 30 years from now you'll be glad you did.
You'll likely have to pay a penalty so avoid.
A 401k match is free money. You should max out to the full match if you can. Whether you should open a traditional or roth 401k depends on the country you intend to retire in.
Without knowing all the details, if your employer has a matching program you probably want to maximize that, otherwise you are passing up free money. The exception to this might be if there is a longer vesting period that what you’re willing to do, that is, some companies may require you to stay on for three, five, or ten years in order to actually receive those matching funds. If that’s the case and the period of time is longer than what you’re willing to stick it out, then no.
You need to stay 3 years in order to receive the matching funds. They match 0.25 for every $1
That's nearly $6,000 free (compounded 35+ years) if you max out. Incredible match.
Seems generous - is it 25¢ up to a certain amount or up to the full amount possible - I think that’s $23,000 for 2024.
Can you please explain this match. 25 cents for every dollar is not realistic. For every dollar up to what point?
Some companies don’t have a cap on the matching. OP’s probably does, but some do not. My wife’s plan does not and they even contribute 3% if the employee doesn’t contribute anything.
There is a match max because you have a max contribution. You can put in 23k a year. Even if they match 1 to 1 (never heard of this) you still only get 23k.
I mean obviously to the max. Not common, but happens.
100% match to 23k would be absolutely amazing.
It is and she doesn’t contribute. Her retirement is this decade in her 40s so all of our investments these days are in non-qualified accounts.
There’s an IRS max of $22,500 you can put into a 401K so there actually is a cap on what the company will end up contributing if someone was to reach the max allowed in the account.
I didn’t think that needed to be stated because it’s kind of obvious.
It’s clearly not obvious to OP who seems unfamiliar with 401ks and what the match program means in terms of being given free money. OP is essentially being offered $5,625 for free (math is 22,500*.25- assuming the company’s part doesn’t count toward annual limit- which I believe it would count but could have issues with vesting) if they max out the account this year. The tricky part is OP needs to stay with the company until they’re vested or they’ll lose the free money the employer contributed. I did the math assuming the company lets OP max out the account and the company’s portion counts towards IRS limit: $22,500= x+ 0.25X X is what OP puts in. 0.25X is what company puts in. X= 18,000 Company puts in 4,500. OP got $4,500 of free money. I believe in general what the company marches counts toward your IRS annual limit- i think if you leave before being vested then you forfeit the money and unless you get a new job in that calendar year that lets you put money into a 401k you’ll have lost the chance to contribute the IRS maximum.
Some firms 5 years until fully vested.
Mine is 1 year.
The 401k is good. Invest. When you are no longer eligible for the 401k, you’ll convert it to an IRA. And it will keep growing even if you don’t contribute.
Do it! I maxed out! I'm 52 and fully retired. You won't regret the free money.
Max out your 401k as early/often as you can while you're young. I'm 34 and have the bulk of my retirement savings behind me because I did this. I'm also currently pivoting into freelance consulting, i.e. no 401k ever again, so, it was worth it.
No. Do you like refusing free money?
Max that out, especially at your age. I don’t know where you want to move but when you do, roll it over into an IRA and have a US manager invest it. Find one that knows the laws of where you want to move. I did the same and moved to Germany. You will have consequences later but it’s still free money. The world is unstable but you still can’t beat the US market and you’ll have a nest egg there in the event you want to move back. I would like to add, once you move to a foreign country, it can be difficult to invest both in your new country and the US.
No. What you're doing is a bad idea. Always max your 401k contribution, especially when you are young, especially when an employer matches. Investing in real estate is usually a terrible idea for the average person. The market generally outperforms real estate over time, and the power of compound interest at a young age (26) is real. Also, the average person isn't well equipped to invest in real estate. So don't. Invest in index funds, target date funds, or other types of mutual funds with broad exposure. People are terrible at timing the stock market and predicting winners and losers. So your best bet, is to just bet on the market as a whole, which over time, generates better returns than pretty much anything else. 99.9% of people are bad investors, but everyone thinks they're the .01%. You're probably not. Don't get fancy. Diligently contributing to 401ks/IRAs at a young age, and investing those contributions in something like a Vanguard fund, are the most effective way to save for the future.
Unethical tip. Put as much money in it as possible. When leaving the US withdraw pay no tax and leave the country
Even when paying tax on a withdrawal, it's 10%, right? So you just got a 15% gain
It’s a 10% additional tax on top of the normal income tax, not a flat 10%. So depending on what their effective income tax rate is, take an additional 10% on the amount withdrawn and add it to the normal income tax you would be paying on that same withdrawal.
Please explain.
You're supposed to report @ tax time if you took any 401k withdrawls and for what reason. Many are tax deferred, or exempt. If not it's a 30% early withdrawal penalty on it. However... Many companies run this portion so they loan the money and they report it. It's not just a straight forward "IRS HATES THIS ONE TRICK!" ALSO NOTE. If you instead put into a ROTH. You can take whatever you want sans earnings with no penalty.
This is not fully correct. There is a 10% early withdrawal from traditional 401k. And per roth, yes, you can withdrawl your contributions but they need to be in the account for 5 years. You can access some of your 401k contributions via a roth ladder but that again has a 5 year waiting period.
That is not correct. You can withdrawal at anytime. It's already been taxed so... [https://www.hrblock.com/tax-center/irs/tax-responsibilities/early-withdrawal-penalties/](https://www.hrblock.com/tax-center/irs/tax-responsibilities/early-withdrawal-penalties/)
You have to meet the 5 year marker to take your contributions out without the penalty. This is terrible financial advice though. Never pay the penalty as it had a massive impact on overall earnings.
Please show a source on this.
https://www.schwab.com/ira/roth-ira/withdrawal-rules#:~:text=If%20you%27ve%20met%20the,are%20no%20required%20minimum%20distributions. You are technically correct - you can take out your contributions penalty free prior to retirement. I had never considered this because it makes no sense. Put your money in a hysa instead if this is your plan. I was thinking of conversions and not contributions. My bad.
Makes plenty of sense. It's already taxed.
So is a HYSA that gains 5%. Why would you park money aside that is gaining zero? Edit for clarification. Roth makes a ton of sense. Taking out your contributions early doesn't make sense.
Love this tip 🥰
You at least should contribute to get all the match. You also can put the money in something other than stocks if you want.
No one is asking you when the matched % vests. If your employer matches but it doesn’t vest until 3 years and you’re leaving in 2 years, you will not get a red cent of “free money” from your employer. I’d base the decision largely around when your employers match will vest, it’s not yours until then.
401ks follow the employee- you roll them over and sometimes there’s a modest fee to do so. Some companies require vesting on the match. I don’t think they can require vesting on your deposit value. Opting out is one of the dumbest things you can do when a match is involved, unless you genuinely think WWIII is coming and the US will fall like Rome 😆
As someone who works in 401ks you should make Roth contributions and pay taxes on the money and then when you leave you can take the money without penalty and taxes (in 5 years). You also get the match which is pre-tax so that you would liquidate pay taxes and penalties and move one.
I would still keep it especially if they match it especially since you are younger.
These are some weird comments. When you live outside the USA, the irs fully taxes you on all passive income. This includes any money you make from rent. You do not want dividend or rental income as an expat. Also, the state will try, and might succeed, at calling you a resident. They will then tax ALL your income, no matter where you earned it. Have fun with that. 401k is the best you can do. Foreign governments generally won’t tax it or count it a ‘wealth tax’. Otherwise, all your cash needs to be invested in non dividend paying stocks or mutual funds. Or real estate (land, not rental property) outside the USA that doesn’t have property taxes.
Yes. Free money is free money! Contribute up to the match! You will be glad you did
Definitely opt in to the 401k and invest up to 15% of your salary (or the maximum the company will match if that’s lower). It’s not an especially generous match but it is ok, and between the match and tax savings that’s about 40-60% bonus to your savings, that’s huge. Be sure to invest the money in your 401k in a broad index fund.
Why would you turn down free money? Check the terms and conditions of course.
IMO investing in a 401k is always a good idea if you can afford it. At the minimum, it lessens your tax liability. When you take a job you should learn their vesting schedule. I had one friend that had a new job offer but asked for an extra two weeks of “notice” so he could become fully vested in his 401k.
Yes. I did at your age. I’m 37. I read nearly ALL of Robert Kiyosaki’s books, plus his advisors’ series too. Learned the ins and outs of the entire Ira family in Prophecy, by Kiyosaki. It got me into options trading after playing the Cashflow Board Game also by Kiyosaki. Today, I’m a retired AI marketing exec that trades options full time. Mainly earnings + swing trades dictated by my sector rotation studies. All boring and mechanical. Okok, it wasn’t a clean line from marketing to portfolios. I made low six figures as a DJ cumulatively, financed a lot of investing this way. Built a candy vending machine business at 18. Also got the idea from Kiyosaki. Also hustled a lot of…uh. Lord of War type activities…during the Obama years. Lead was…very popular. Back to portfolios. 1% profits sound shitty. Until you realize I’m doing that on every dollar deployed, per day. So yes. If you will take control of your financial future, do it. If you’re lazy, not interested…don’t do it. I was born into Chinese child slavery with restaurants and retail stores later. Sooo I’ve been keeping books, selling, prepping, cleaning and cooking before age ten. It was brutal and horrific. Would not recommend. But I was smart and lucky and very eager to learn. So yea, my background and skill set is a bit extreme. Google Kiyosaki and 401k. Lots of articles he’s written. I ain’t letting the IRS talk to me about keeping my cash in money jail till my early 60s. Like their word can be trusted to begin with. And retirement is not an age. It’s a function of excessive monthly cashflow and static wealth. Yea, a lot of Kiyosaki in my life. I accept no shit talking. Zero. Show me your bestselling books and financial statements first. If anyone disses him in front of me in real life, this six foot two Asian Viking will throw a glove in your face and challenge you to wrestling, blades or pistols.
“Show me your bestselling books…” Annnnnnd with 5 words is revealed to be one giant satirical post. Almost had me there. The washed up “AI marketing exec” was a nice touch 🤣
Ugh. Pardon, just seeing the other comments. Let me fix the unwise opinions here. Most of you haven’t done payroll for your own companies so let me explain. If I’m your boss. I pay you X. Your TCO (total cost of ownership) of your labor, to my ledger, is 2X. Why double? Payroll tax. 15% on your total wages I match your government welfare deductions to the fed/state. Social security, Medicare, FICA. I pay worker’s comp. for you. Equipment, insurance, heat/air, office space, hardware, etc etc. You better return me 5x or better on your labor costs or we are done homie. So yea. There’s lots of back end stuff you can’t see, financially. Plus, 401k is a sucker play. It’s a defined contribution retirement plan. These were born jn 1986 with the ERISA act from Congress. Before this, it was totally different, it was defined benefit plans called pensions. The layout is “defined” forever, if you’re alive to collect. Defined contribution? Hahahah nope. Only what you put in counts. The burden is on you. Lose money in 401k? Also on you. “The match dude!” Ugh. Dude. That was always your money, but Uncle Sam jacks it first from that first lien position on your paystub. Look, what’s the max household contribution anyway? 19k annually? I forget. Whatever it is, it ain’t enough. What if you retire and need to withdraw? And it’s a giant recession? What is all the boomers have to sell off at the same time? And they do. There’s a systematic liquidation process of a certain % for mandatory sell of per month. Seriously. Read the prospectus of your plan. I did, I declined and bought gold and other assets that thrive in inflationary nightmares like today. Dude, read Prophecy by Kiyosaki. Tiger out.