Check question

[Dracula]

Paying down a mortgage at current interest rates vs. investing the money is a topic of much debate... but I was thinking more about people with interest-only and 7% loans (who can't refi - and there's many out there).

And even a 2%, or 1%, contribution will lower your take-home pay.

OK, call me stupid, but isn't that kind of the idea behind saving? Taking from now to get later? Of course it will lower your take home pay. Saving isn't free...

 

[Bagels]

[/B]

Simply not true.

It is true, and a 10-second Google search will bring you to an array of online calculators that backs me up.

OK, call me stupid, but isn't that kind of the idea behind saving? Taking from now to get later? Of course it will lower your take home pay. Saving isn't free...

I agree; I'm merely pointing out Brownslave688's math error to those who may read it and get fooled into thinking that their paycheck won't be effected if they contribute 2%. Any money's a lot of money when you just don't have it.

 

[brownmonster]

So the company just automatically set me up a 401k? Odd.

If they didn't would you have? Too many don't.

 

[uber]

UPS auto enrolls you. How this is legal I have no clue.

Why w[SUB]ould they do this though?[/SUB]

 

[brownmonster]

Google automatic enrollment 401K. Many companies are doing this. Many people would never bother setting this up on their own. Instead of opting in you now have to opt out. Kind of eliminates the "I'l sign up next week" mentality.

 

[Dracula]

Still not legal.

 

[oldngray]

I think they can set up a 401k account for you as long as they don't divert any of your money into it. Its like they created it for you if you want to use it.

 

[Indecisi0n]

I think they can set up a 401k account for you as long as they don't divert any of your money into it. Its like they created it for you if you want to use it.

They do invest your money. It's a small amount but the way I see it, it's my money. I don't think they should even legally be able to invest a penny from my pay without my consent.

 

[Dracula]

I think they can set up a 401k account for you as long as they don't divert any of your money into it. Its like they created it for you if you want to use it.

No, they can't. Last I checked, this is still America. You can't be forced to open an account, especially against your own will.

 

[Ms.PacMan]

No, they can't. Last I checked, this is still America. You can't be forced to open an account, especially against your own will.

It looks like the IRS says they can
IRC 401(k) Plans - Operating a 401(k) Plan

and this


Before the plan can deposit the first contribution, you must provide employees with an automatic enrollment notice describing the plan’s automatic enrollment process and participant rights. The notice must specify the deferral percentage, the participant’s right to change the automatic percentage, his or her right to opt out, and the default investment information. After the first notice you’ll need to send out this notice annually

source

Not everything is junk mail......I'm sure we will now hear how the op never received a notice, etc., etc..

 

[Dracula]

It looks like the IRS says they can
IRC 401(k) Plans - Operating a 401(k) Plan

and this


Before the plan can deposit the first contribution, you must provide employees with an automatic enrollment notice describing the plan’s automatic enrollment process and participant rights. The notice must specify the deferral percentage, the participant’s right to change the automatic percentage, his or her right to opt out, and the default investment information. After the first notice you’ll need to send out this notice annually

source

Not everything is junk mail......I'm sure we will now hear how the op never received a notice, etc., etc..

Search Automatic Enrollment on the IRS site, and you come across this:

If you’re an employee, your employer must give you the option, before any deferrals are withheld from your wages, to have none withheld or to have a different amount withheld.

 

[Ms.PacMan]

Search Automatic Enrollment on the IRS site, and you come across this:

If you’re an employee, your employer must give you the option, before any deferrals are withheld from your wages, to have none withheld or to have a different amount withheld.

I saw that and then found what I quoted last - that they just have to send you a letter and the employee needs to....I guess, un-enroll before the deferrals begin.

I do think saving is a good thing but can see how a part-timer might not have room in his budget for it.

 

[yeldarb]

No talk on the 401k Roth that we have an option for now? It's post tax money, but any gains on it are not taxable when you withdraw it at retirement age. Who is to say that in 20 years, taxes won't be double what they are now? 3% is a great start and it adds up. My center manager encouraged me to do it back in the day and I continue to increase how much I put in based with our raises so that my check stays the same. I don't want to need to work in retirement. I want to be able to choose to work if I see something that I enjoy doing anyways.

 

[brownmonster]

I saw that and then found what I quoted last - that they just have to send you a letter and the employee needs to....I guess, un-enroll before the deferrals begin.

I do think saving is a good thing but can see how a part-timer might not have room in his budget for it.

Everyone has room in their budget for savings.

 

[Bagels]

Everyone has room in their budget for savings.

No, not everybody. Now that my hours have been cut to the minimum (17.5/week - I use to average 24), and I've made the decision to return to school, I bleed several hundred dollars each month. And I watch every penny -- I take 30-minutes to get to work instead of 20-minutes through the freeway since it saves me about $10/month (at $3.50/gallon) on gas.

No talk on the 401k Roth that we have an option for now? It's post tax money, but any gains on it are not taxable when you withdraw it at retirement age. Who is to say that in 20 years, taxes won't be double what they are now? 3% is a great start and it adds up. My center manager encouraged me to do it back in the day and I continue to increase how much I put in based with our raises so that my check stays the same. I don't want to need to work in retirement. I want to be able to choose to work if I see something that I enjoy doing anyways.

Probably because most people within these forums are older; status quo, Roth options are best for younger employees. As always, consult with a financial adviser before making the commitment.