401k questions

[NedFlanders]

Ive been a full time driver for over year now and need to start thinking about signing up for the 401k plan. I am in my mid 20s, no kids, still live w/ my parents. I have the usual bills to pay (minus rent, but including student loans)
Im currently trying to save up to get my own place.

About how much should i be setting aside into the 401k? Does this money get invested or does it just sit there in an account? Does UPS match 401k contributions? anything else i need to know? This is totally different then the pension plan, correct?




thanks for any help

 

[evilleace]

The maximum amount that you can afford should be set aside

 

[wyobill]

Ive been a full time driver for over year now and need to start thinking about signing up for the 401k plan. I am in my mid 20s, no kids, still live w/ my parents. I have the usual bills to pay (minus rent, but including student loans)
Im currently trying to save up to get my own place.

About how much should i be setting aside into the 401k? Does this money get invested or does it just sit there in an account? Does UPS match 401k contributions? anything else i need to know? This is totally different then the pension plan, correct?




thanks for any help

I would do 35%. The money gets invested and you should go to a financial Advisor to help you diversify within your options. UPS does not match and this does not have anything to do with your pension.

Dont count on a pension or SS. Plan on doing it all yourself. Id also take advantage of payroll deduction and buy UPS stock at a discount. If you can do this you will be very happy in 20 yrs but most young people cant see past their nose let alone make this kind of financial sacrifice. Good luck!

 

[Ms Spoken]

I started at 8% when I was PT and would raise it every year by 1% and I'm now at 20%.

 

[mxguy]

Now is the time to start planning for retirement. I would contribute has much as possible. Remember You will not have to pay Federal Tax on contributions.You will pay taxes when you withdraw. You should diversify according to your tolerance of risk. Being that you have 30-40 years till retirement I would go pretty agressive Maybe something along the lines of
55% in a Growth fund
20% in an International Fund
10% in a Small Cap fund
10% in a Mid-cap fund
5% in a bond Fund
Rebalance your porfolio once a year. This is a sure way to buy low and sell high.
not sure what kind of funds your 401k has but you get the jist Good Luck.

 

[Joopster]

I am pt and 10% goes each check, I have only been doing it a couple years but already have a nice little chunk of change. I actually made money on my last statement. I was in bonds and mutual funds, no stock for me.

 

[UpstateNYUPSer(Ret)]

Wouldn't you think the fair thing to do would be to help your parents out financially? Food, cable, phone and a mortgage ain't cheap. I'm sure they will probably tell you "thanks, but no thanks" but the offer would most certainly be appreciated.

Save up money for you place, get settled and then worry about your 401k.

 

[pickup]

Wouldn't you think the fair thing to do would be to help your parents out financially? Food, cable, phone and a mortgage ain't cheap. I'm sure they will probably tell you "thanks, but no thanks" but the offer would most certainly be appreciated.

Save up money for you place, get settled and then worry about your 401k.

I was waiting for this thread to take this turn, thanks for not disappointing, upstatenyuper. Maybe he buys his own food, maybe they don't have cable, maybe he has his own cell phone and maybe they decided they aint paying their mortgage but waiting for obama to do it

 

[drewed]

Now is the time to start planning for retirement. I would contribute has much as possible. Remember You will not have to pay Federal Tax on contributions.You will pay taxes when you withdraw. You should diversify according to your tolerance of risk. Being that you have 30-40 years till retirement I would go pretty agressive Maybe something along the lines of
55% in a Growth fund
20% in an International Fund
10% in a Small Cap fund
10% in a Mid-cap fund
5% in a bond Fund
Rebalance your porfolio once a year. This is a sure way to buy low and sell high.
not sure what kind of funds your 401k has but you get the jist Good Luck.

Arent traditional 401ks taxed at investment and not later?
And for the UPS stock purchase thing, Id buy it outright, what theyre doing now is what the cost of the stock on the last day of the quarter example stock was at about 46 at the 4th quater anncouncement yesterday it was at 38.10 so 8 bucks doesnt make up the 5% discount you get

 

[Catatonic]

Arent traditional 401ks taxed at investment and not later?

Nope, other way around. Less AGI now but you pay taxes when withdrawn at the Ordinary Income rate.

Roth IRA which is within UPS 401k works the other way. After tax investment but no taxes upon withdrawal. At least for now...

 

[NedFlanders]

Wouldn't you think the fair thing to do would be to help your parents out financially? Food, cable, phone and a mortgage ain't cheap. I'm sure they will probably tell you "thanks, but no thanks" but the offer would most certainly be appreciated.

Save up money for you place, get settled and then worry about your 401k.

That is the fair thing, you are right. Im going to start chipping in some money every month. I just signed up for 6% and put it in the s&p 500 index fund for now. I'll see how that goes. thanks

 

[1989]

Arent traditional 401ks taxed at investment and not later?
And for the UPS stock purchase thing, Id buy it outright, what theyre doing now is what the cost of the stock on the last day of the quarter example stock was at about 46 at the 4th quater anncouncement yesterday it was at 38.10 so 8 bucks doesnt make up the 5% discount you get

Yesterday I was going to buy 300 share. But wanted a discount so I sold 3-$40 March puts at $260. Now the stock is above $40. Come March 20 I maybe sitting with my $780 and no shares.

 

[drewed]

Nope, other way around. Less AGI now but you pay taxes when withdrawn at the Ordinary Income rate.

Roth IRA which is within UPS 401k works the other way. After tax investment but no taxes upon withdrawal. At least for now...

I was pretty sure my 401k contributions were taxed...

 

[trplnkl]

I'm pretty sure that was the main selling point to get people interested in the 401Ks.
Do you do your own taxes?

 

[barnyard]

I would put the maximum you can afford into your 401k. At your age, I would also do a mostly stock mix.

The axiom is "buy low, sell high."

Guess what. Right low, prices are low. Stocks are literally, ON SALE. Many are way more than 50% off.

If you buy stocks now (or an index fund), I would expect that within 15 years, it will at least, double.

Your smartest play though, would be to do 2 accounts. Your Teamster 401k and a Roth IRA. Take all the Teamster options to your Roth IRA adviser and ask for his/her advice. I have an Edward Jones account and my guy has no problem looking over my Teamster stuff and advising on how much should go where.

You have an opportunity to set your retirement up right, get some professional help.

TB

 

[UpstateNYUPSer(Ret)]

I was pretty sure my 401k contributions were taxed...

401k contributions can be both pre-tax and after-tax. The amount that you contribute each year comes right off of the top of your gross income, which, as Tex noted, was one of the main selling points of the 401k. Your withdrawals are then taxed at the income tax rate at the time of the withdrawal, which will most likely be lower than your current tax rate, when you turn 59 1/2 (why the 1/2--I have no clue).

 

[Catatonic]

401k contributions can be both pre-tax and after-tax. The amount that you contribute each year comes right off of the top of your gross income, which, as Tex noted, was one of the main selling points of the 401k. Your withdrawals are then taxed at the income tax rate at the time of the withdrawal, which will most likely be lower than your current tax rate, when you turn 59 1/2 (why the 1/2--I have no clue).

Mgt 401k has a Roth IRA as an option and as such would be taxed in the year of contribution.
That is what dewed is referring to.
Not good for me at 55 but very good for dewed at 16 years old.

 

[UpstateNYUPSer(Ret)]

The part of this thread that I found upsetting was that we finally found a topic which Drewed not only doesn't know what he is talking about but actually admits it.

 

[Catatonic]

The part of this thread that I found upsetting was that we finally found a topic which Drewed not only doesn't know what he is talking about but actually admits it.

You sir, by appearances, are a creature of habit.
Deviation from the normal is no reason to get upset.

 

[dilligaf]

Wouldn't you think the fair thing to do would be to help your parents out financially? Food, cable, phone and a mortgage ain't cheap. I'm sure they will probably tell you "thanks, but no thanks" but the offer would most certainly be appreciated.

Save up money for you place, get settled and then worry about your 401k.

I think I have to agree with Upstate. Think?..............nah, I do agree with him. If you are at home you should be helping your parents. At least make the offer. You have alot of yrs and it won't hurt to put some of the money in something that you can have access to without penalties until you get into a home. Then start investing into something that you aren't going to touch.