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Take advantage of pretax investing upto whatever amount is required for any match by the company. At 20 you can afford some risk with time on your side. The 401K is a long term investment for your retirement.
Here's a question...what should I do if I literally CAN'T contribute to a 401K? I have one available through my work, but my paycheck is pretty pathetic & I usually only have as little as $5 left over until my next paycheck comes. Before anyone says cut back on spending, I have no car payment, no cable, only a pay-as-u-go cell phone, I never eat out, haven't bought new clothes in 3 years, and almost never go out to eat (unless it's white castle, I can eat a meal there for less than $5. Internet access is probably my only "luxury" and I feel I can't live without it right now since I'd feel so cut off from the rest of the world. Other than that, I live almost like Ghandi.
I do put change (coins) I get back from purchases in a large container and never raid it, no matter what, even if I only have $10 to get me through an entire week. That's the best I can do right now
Your age has little to do with whether you can "afford to be risky".
Sorry but this is totally incorrect. Your age has EVERYTHING to do with it. If you are investing for the long haul, you can and should - generally speaking that is - go for "riskier" investments (not mean trendy off the wall gimmicky stuff, thinking more along lines of more volatile mutual funds vs slower/more stable funds - think large cap vs small cap or internationals and specialty funds).
Back to the OP and this has probably been covered but it cannot be overstated that OF COURSE you should put as much as you can afford into towards your 401K and DO NOT "CASH IT IN" in any way/shape/form. ie keep investing, even if you change how it's been invested. This is about as much of a no-brainer as deciding between whether to cash in a winning lottery ticket or rip it up and throw it out.
PS final note: DO NOT TRUST ONLINE RETIREMENT CALCULATORS FOR SQUAT. They will vary greatly in the "answers" they give you and as stated earlier often don't take a variety of things into account.
zz, if you can't, don't. As you say, what choice do you have (for now)?
Sorry but this is totally incorrect. Your age has EVERYTHING to do with it. If you are investing for the long haul, you can and should - generally speaking that is - go for "riskier" investments (not mean trendy off the wall gimmicky stuff, thinking more along lines of more volatile mutual funds vs slower/more stable funds - think large cap vs small cap or internationals and specialty funds).
Investing for the "long haul" does not make a risky asset less risky, at best it will give you more flexibility in terms of unloading the asset when things go wrong.
Investing for the "long haul" does not make a risky asset less risky, at best it will give you more flexibility in terms of unloading the asset when things go wrong.
Generally speaking, sure it does, because you can ride out the highs and lows. But we're both oversimplifying.......as I stated before, it depends what is meant by "risky asset." Very broad term.
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