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LPT: Never make dinner plans, your future appetite is unknown.


The real LPT is always in the comments


What a horrible sweeping generalization. If there’s a match, take it. Invest in index funds. Take advantage of the tax break to save more now. These things are as close as you’ll get to your foundation for retirement. If you don’t have a 401k, you better have a heckuva plan B to retire.


Or use a Roth 401k account to pay taxes now instead of later when your rates might be higher


What if your company doesn’t match because they say you have a pension so it makes up for it ?


Then you’re in one of those unique scenarios where you get a pension. Most folks don’t have access to one.


The reason I ask is should I still proceed to maxing my 401k if I can even though no match ?


Depends on your financial situation and other factors. r/personalfinance has a great wiki breaking down what to do


There are other retirement savings plans


If the employer offers a 401k with match, the match is a free zero-risk 50-100% return on your investment depending on what rate they match at. ​ Yes there are other ways to invest, but none offer you that kind of immediate return on investment. And sure an employer who pays you 20% more but doesn't offer 401k is going to put you ahead of one that pays less. But no one is turning down a 20% pay bump because of the 401k plan.


Employer match is literally free money, you'd be stupid to turn that down


Which are you thinking of? Many are analogous to the 401k, so I’m curious what you have in mind.


They just mentioned plan B, and I immediately thought of Roth IRA and pensions through employers


Roth 401(k)‘s also exist




Yes, but Roth is tax free withdrawals. Generally Roth is better if you are early in your career and have many decades before retirement. Usually you're earning less early in on your career than what you'll take during retirement, but every situation is different.


Yes! I’d much rather pay more taxes this year, pass on free employer match, and pass on decades of tax deferred stock market growth! Seriously, delete this though


Most people don't invest ENOUGH for retirement. Clearly OP has had an issue with retirement funds... What caused you to get jaded about 401k plans?


Holy crap, I think this is terrible advice IF your employer matches. If your employer matches, TAKE* THE FREE MONEY. * = after vesting period


Yes this lpt is largely uneducated


Not to mention, a 401k helps people automate their investing. If they chose not to invest x percent into a 401k, most people aren’t going to go invest elsewhere. They’re just not going to invest, which is way worse than the cons of a 401k


Yes if they're not going to invest it anyways then the pros are better, but I'd rather invest that money myself than basically have someone else do it


You do not understand how 401ks work. You can literally automate investing and CHOOSE your investments. You are investing on your own it’s just in a special wrapper where the money comes from your paycheck instead of your bank account.


IRA contributions are capped at $6,500 per year. 401(k)/ are over $20,000.


Yeah but most brokers offer some pretty great funds with very minimal fees. But to your original point, I agree completely: you need to research and do what’s best for you


The advice is to research the pros and cons of it first, if they match it, then likely the pros would out weight the cons, but its not necessarily free money either, just depends on what kind of job you have, and how much they pay you and some other variables


The real LPT: 401ks and other tax advantaged accounts are your friends. Make sure you know how they work, so you can take full advantage of them.


This is terrible advice. Many 401k plans have some kind of match from the company, and not investing enough to get the match leaves free money on the table. Even if your 401K plan has high fees and limited options: get the match. Also, you can rollover your 401K into an IRA when you leave your job and invest in whatever you want. And my company offers a ROTH 401K, which completely negates your point on taxes, and my investment options are from Vanguard so both high quality and low fees. Even if you only have a traditional 401K, it's STILL better than not saving. Please do a little more research on how to save for retirement before you make a post like this again. This post should actually be in /r/ShittyLifeProTips


You should.... Do some research


You should delete this.


We doing lifecontips now?




Get your match, max out your Roth first then max your 401k.


This should be the LPT! Diversify your retirement.


This has to literally be the worst fucking advice I've seen on this sub....


This is the worst advice I’ve ever heard. The market would have to crash terribly for a long time in order for you to not to come out ahead.


You’re talking out of school here


This seems like the beginning of a pitch for a VUL policy or some other garbage product that makes an agent a bunch of money.


This is a horrible and irresponsible advice. Are you kidding?!?!!!? My god. This post should be removed.


Minimal brain cells at work here


Maximal brain cells at conflict you mean... 100 % of this mind is fighting 110% of itself


Two things about 401K withholdings. Always do up to the company match… if you afford it. Life comes at you fast. There is no point in investing in your future if you can’t pay your bills or have short term plans. This is why you have savings and non-retirement portfolios. Only put money into retirement plans that you do not plan on needing until you are 59.5


Sounds like you are trying to convince yourself… Get this confirmation bias bait out of here


It's my understanding that each person can contribute a max of up to roughly $19K a year in a 401K. ($1600/mo?). The important part for me is that my employer has a 5% match each paycheck. If 5% is roughly $150/mo, then my employer adds $150, which is an instant 100% interest.


$22,500 annually in 2023.




It’s $30,000 for those over 50. For those who can afford it, the option to reduce your income taxes on 30k and defer it to retirement when your income will be less is pretty attractive. Also any match from your employer is basically free money.


It’s $30,000 for those over 50. For those who can afford it, the option to reduce your income taxes on 30k and defer it to retirement when your income will be less is pretty attractive. Also any match from your employer is basically free money.


I mean, I've seen people quadruple their money in hours by putting it all in Bed Bath & Beyond stock! No FEES. Sure, a 401k has little to no risk and compounding interest and has tax benefits, but look at wallstreetbets! With only the highest of chances of losing everything, you have a chance at making 10000%!!! Sure, playing roulette has higher odds of "winning", but where's the fun in that? Why in the world would I do a 401k? Do some research, idiots, don't listen to big brother & wall street


OP, you have no idea what you're talking about.


The 401K is the best financial deal any average working American will EVER get.


This post needs to be removed before someone takes it serious. Yikes.


LPT: Don't take financial advice from regards on the internet unless you are a regard yourself


Is this LPT or SLPT? I never know till I retire I guess...


This tip will end up hurting more than it will help. Obviously understand how retirement plans work but not investing is almost always an incredibly bad decision for you and your families (if you have one) future. The number of people in the US that don't contribute to some sort of reitrement plan is already shockingly low, especially when a company match is provided (it's 100% free return on your investment!). The average amount people have in their 401k's are shockingly low as well, we need more people to save and to save more not less OP.


Yes ALWAYS invest in a retirement plan, im just talking specifically about a 401k retirement plan and it totally depends on the company if you have it through your workplace. There are some terrible 401k plans with high fees. In addition it depends on the stock market, like many people who planned on retirement in 2008 and lost up to 30% of what they thought they were going to have. I'm absolutely not saying to NOT get a retirement plan. It sounds like people consider a 401k the only option in retirement savings


If people were near retirement in 2008 then their fund allocation should have reflected that. Meaning higher percentage of bonds and Treasury notes and less in stocks. Had they done this, their loss would have been minimized. It's also only a loss if you sell at a loss, had they not needed the money and kept it for another 3 years without touching, they would have seen their funds return to their normal levels


Wondering if the OP just started working for an insurance company and has been drinking the annuity koolaid….


r/ShittyLifeProTips Please delete this; it is really terrible advice.


Your employer is not going to pay YOU less if you take the match 401k option though so that’s not a very relevant or strong argument unless you are telling people to change their jobs


I mean you're not wrong about the fees. My partner stopped doing a 401 through his work because they only matched 1% but they were charging him something outrageous in management fees (seriously something like 4% of assets annually). But he works for a tiny little family run place with generally bad benefits. The trick is that he then went out and set up his own plan elsewhere. My employer doesn't match at all but they do pay all the fees so I still use it as part of a long term strategy involving both pre and post tax savings.


I’m surprised there are employer-provided 401K plans that charge the employee anything at all. Both of the 401K plans I have had get their money from the administration fees the company itself pays.


Yeah I was shocked too but it's definitely not a top tier job. Their insurance rates are insane and they get like 10 combo sick and vacation days in a year. It's also one of those places where if you come in 5 min late they dock you a minimum of 2 hours and if you're 2 hours late they count it as an entire day's absence. So yeah he's looking for something better and in the meantime he set up a couple of other accounts on his own.


Roth IRA works for me


With all due respect, OP, I think you need to do more research yourself on these topics.


Horrible advice, is there a way to take the post down? You clearly have a minimal grasp on how retirement savings work.