When can you start contributing to the 401k

TheKid99

Well-Known Member
Is it after a year?
or when you get hired in?

Union sent me a card from prudential

I want to contribute 30% when I start seasonal driving.. is there a cap out?

Thx and I know this may be a stupid topic.. I'm just curious.
 

Mrhardy88

New Member
Is it after a year?
or when you get hired in?

Union sent me a card from prudential

I want to contribute 30% when I start seasonal driving.. is there a cap out?

Thx and I know this may be a stupid topic.. I'm just curious.

Immediately. I was hired in for package handler in June I signed up for 401k after orientation and it was taken out in my very first check. Not sure about the cap.
 

UpstateNYUPSer(Ret)

Well-Known Member
You can learn all about the 401k by visiting retirement.prudential.com.

There is a cap-----you cannot contribute more than 45% combined with an annual limit of $17.5K with an additional $5.5K for us older folks over 50. These limits are set by the IRS. There is no company match----they pay our administrative fees rather than offer a match.

You can choose between the traditional and Roth 401k's. The traditional is funded with pretax dollars while the Roth is post-tax. Withdrawals from a traditional are taxed while those from a Roth are not. You get the tax break now with a traditional and when you retire with a Roth.

I would like to see a mandatory 401k with a 3% starting contribution unless the employee opts out in writing.

My son is starting his new job 9/2 and among the benefits are a mandatory 401k with a 3% starting contribution rate and a full company match to 4% with an additional 1% if he contributes 6%. Company matches are free money and he would be foolish not to take advantage of them.
 
Not a stupid topic. don't be afraid to ask questions. Sign up for 401k asap.
Even if you can only afford 1 or 2% right now.
The when you go driving,you can increase your percentage.
 
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purplesky

Well-Known Member
Is it after a year?
or when you get hired in?

Union sent me a card from prudential

I want to contribute 30% when I start seasonal driving.. is there a cap out?

Thx and I know this may be a stupid topic.. I'm just curious.

Try and keep your overhead low at your young age. YOU WILL BUILD WEALTH THIS WAY.

Stay away from car payments and credit cards.

If you buy a house make sure you are debt free and the house payment is no more than 25% of your take home pay.

BASICALLY LIVE BELOW YOUR MEANS! Good job on 401k contributions.
 

purplesky

Well-Known Member
Agreed....but,most people wont do It. That's why the 401k is a good option for many people.

Very easy to set up and auto deduction from your paycheck.

Out of sight out of mind.

The 401k cannot be touched until 59half so its definitely a great way to save.

Unfortunately some people take out 401k loans which is a REALLY bad idea.
 

UpstateNYUPSer(Ret)

Well-Known Member
Unfortunately some people take out 401k loans which is a REALLY bad idea.

Do you have any kids? If so, any of them planning on going to college? Borrowing from your 401k is an ideal way to pay for college. Yes, you lose the compounding, but the interest rate is really low and you are basically repaying yourself.
 

purplesky

Well-Known Member
Do you have any kids? If so, any of them planning on going to college? Borrowing from your 401k is an ideal way to pay for college. Yes, you lose the compounding, but the interest rate is really low and you are basically repaying yourself.

I don't like 401k loans because you use after tax money to pay back the loan.

I think a combination of cash flowing college and government loans is a better way to go for funding college.
You can always just throw money at a student loan and pay it off fast.

Plus if you lose your job you have to pay off a 401k loan almost immediately to avoid penalties.
 

purplesky

Well-Known Member
Do you have any kids? If so, any of them planning on going to college? Borrowing from your 401k is an ideal way to pay for college. Yes, you lose the compounding, but the interest rate is really low and you are basically repaying yourself.

I think you can do a early withdrawal for college costs before age 59half without the 10% penalty.
Atleast, the UPS plan,Is very stingy on what you can take a loan out for!

Thats a good thing. I am so glad I can't touch my 401k because I would be so tempted to go buy a toy.:biggrin:
 

UpstateNYUPSer(Ret)

Well-Known Member
The key is to keep the repayment term as short as possible. Our 401k limits you to no more than 2 loans going at the same time. I think I had 8 short term loans to pay for my share of our daughter's tuition and had them all paid off before she walked. I also co-signed for a private loan ($3K) that she took out to pay for a few courses at a community college----this has since been paid off.
 

bleedinbrown58

That’s Craptacular
Agreed....but,most people wont do It. That's why the 401k is a good option for many people.

Very easy to set up and auto deduction from your paycheck.

Out of sight out of mind.
Exactly. ....it's money that I would otherwise spend....and I have to say I'm surprised how quickly it all adds up. I wish I'd done it 5 years ago!
 

purplesky

Well-Known Member
The key is to keep the repayment term as short as possible. Our 401k limits you to no more than 2 loans going at the same time. I think I had 8 short term loans to pay for my share of our daughter's tuition and had them all paid off before she walked. I also co-signed for a private loan ($3K) that she took out to pay for a few courses at a community college----this has since been paid off.

Your kids are fortunate to have such a helpful dad.

I guess if your going to do a 401k loan, helping your kids with college is a worthwhile reason.
 
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