Quote:
Originally Posted by Maestro
First, Op you inadvertently told everyone what you make.
As everyone said, bad idea to use 401K for anything but your retirement.
Next, I will give you the best advise given to me when I first starting working and was presented with a 401K, had no idea what it was since I came from a Union and government/company paid pension family.
My uncle told me to max out the 401k and put in what I could (at the time that was $5000/yr today it is $19,000/yr). He also said that I would never miss it since I never had it and learn to live without that income. I have tried to max it ever since and i have never missed it.
The other piece of advise I would give you and this is what I have done for last 30 yrs which is to move your 401K to a rollover IRA when you leave a company. Most companies' 401K investment selection suck which sounds like your company's 401K falls into or you are putting your money into a money market not mutual fund considering even the worse investment are paying more than a money market.
In an IRA you can invest in the entire market not just the things your company has chosen to offer you.
I can tell you my Rollover IRA has done far better than any 401K I was in. I tend to invest in individual stocks verse Mutual funds, Mutual funds suck, the go up slow and crash quickly and take forever to recover when market tank. Most Mutual funds have a few good investment and many okay and number of bad.
I would recommend upping your contribution and look at what investing you have the money going into and see what you can do to improve the returns. In the last 5 yrs in decent investment returning half the what market did you should be up at least 50% from where you are.
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The first bold part I am in 100% agreement with. You can certainly find funds with much lower expense ratios as well as ETF's and individual stocks you cant get in a 401k plan.
The second part is a blanket generalization and is of course not true. All managed funds are not created equal and will vary greatly depending on the funds objectives, investments, and management.
One thing I have learned though is unless you are a sophisticated investor with the dedicated time to manage a portfolio and/or very lucky, its hard to beat the market. I have done MUCH better simply leaving my retirement money in overall stock market and/or sector funds/ETFs. I can dollar cost average in over time and dont need to worry about any individual companies which would require a watchful eye. I have used Vanguard as my brokerage for years which offers a slew of ETFs with minuscule expense ratios.