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First check to see if your company matches on bonus payouts. If they do, then go for it, but don't switch back to zero. If you get any kind of match it's like free money - no reason not to contribute. My company uses Fidelity and we can choose whether or not we want our bonuses to be eligible for the 401K contribution, but they don't match anything on the bonus itself - just on the basic salary.
Even if they do not match the bonus, you can probably justify jacking the whole amount into your 401K and having the ability to actually manage / direct the money toward something likely to have a measurable return.
I mean more than one person has gotten frustrated seeing some tiny weekly contribution buy only a fraction of share a week and eventually giving up. When you put a big chunk into your 401k all at once there is a psychological boost that tends to make you want to check your fund performance on a regular basis (even though the statistics would suggest that 'dollar cost averaging' is a better strategy the habits of the mind say most people get bored with that -- I think maybe this is same kind of reason that stocks do better after a split, even though the 'rational investor' models would say this ought not happen. People are human, and in just about every aspect of life "more is better" and "faster beats slower", so having a whole lot more in your 401K all at once ought to make you watch it more closely.)
I would switch to a 6% contribution rate and keep it there. You are passing up free money for retirement in the form of a company match. It is pretty foolish not to take advantage of that.
I would switch to a 6% contribution rate and keep it there. You are passing up free money for retirement in the form of a company match. It is pretty foolish not to take advantage of that.
Sorry, I should have said, I just became eligible for the 3% match. You have to be a full-time employee for over a year.
I wanted to wait until my pay increase happens so my paycheck isn't a whole lot smaller with the 401k being taken out.
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