401k or PM's

bestmr · November 13, 2012 5:04AM

So I just hit my year with my new job and am getting the option to do a 401k. I had one previously with my last job. When I left my old job, it was at $17000. Saw it rise to over $32000 but then drop down to $23000 where I had to cash it out. So am kinda leary of the market. Now, where I work, my company only matches 50 cents of every dolar up to 3%. So not very good. I was thinking instead of just doing a PM purchase every 2 weeks(when i get paid) of that 9-10% instead. Dumb or not?

derryb · November 13, 2012 5:20AM

Not dumb at all.

If it were me the determining factor would be what the investment options in the 401 are and what I view as the long term future for metals. Keep in mind that taxes are deferred on everything YOU contribute to the 401, giving you a lower taxable gross income each year. Bottom line is "where can I expect the biggest long term gains INCLUDING the tax expense of those gains" (physical metal gets taxed at the collectible rate when sold). Crunch the numbers, but they will have to be guesstimates.

mariner67 · November 13, 2012 5:22AM

Dumb.
You cannot match or beat an automatic 50% immediate gain on the first 3% you get from your company.
You should at least do that.
Your previous gain did not seem too bad...what was the ultimate annual % gain on the 401K you cashed out?
Did you pay an early withdrawal penalty?
I vote go with and stay with the 401K.
Don't cash this next one out until you retire.
JMHO.
Best.

Pokermandude · November 13, 2012 5:33AM

50% match is still free money. Even if the markets the money goes to are breakeven, you're still way ahead of the game.

I'd contribute up to the 3% cap, then do precious metal purchases on top of that.

tneig · November 13, 2012 5:47AM

I'd suggest to at least take the 401k matching amount. It is instant profit. It will come out of salary automatically and be a steps away from easy spending. It will lower your taxes at the end of the year as well. It has many advantages. You can generally pick where the money goes like in a slighty less fluctuating account or fund.

I would suggest PMs as well, which has many advantages too, and risk.

Its not an easy or set answer. Investments of most kinds fluctuate, especially these days, including retirement 401 funds, stocks, and PMs.
A Lot of it has to do with how its Managed, risk tolerance, when and how taking it out, etc. This stuff is at least as much, or more important than what you invest it in, applying to 401ks or PMs too.

guitarwes · November 13, 2012 5:48AM

<< I'd contribute up to the 3% cap, then do precious metal purchases on top of that. >>

This. Contribute 3% to the plan, take the other 7% you were gonna buy PM's with and do just that. OR, set that 7% aside for 5-6 months and buy a bulk deal to maybe save on premiums. OF course the price could rise in that amount of time OR you could be tempted to spend that money on something else. Get a SDB and make a monthly "deposit" with your pm's so they'll kinda be out-of-sight out-of-mind.

LowBudget · November 13, 2012 5:50AM

stick with the employer match if you can....I have kept mine in cash, not stocks or anything else..my boss matches 25% of my contribution

derryb · November 13, 2012 5:58AM

<< I'd contribute up to the 3% cap, then do precious metal purchases on top of that. >>

This, gives you the best of both worlds. build the extra cash and buy metal at the right times. Don't put yourself on a set schedule when it comes to buying.

Way to go Pokerman.

guitarwes · November 13, 2012 6:00AM

<< ...my boss matches 25% of my contribution >>

HOLY CRAP!!!!!!!!! AWESOME!!!!

derryb · November 13, 2012 6:02AM

<< 

<< ...my boss matches 25% of my contribution >>

HOLY CRAP!!!!!!!!! AWESOME!!!!

>>

Keep in mind there are limits to what the account holder can contribute and some matching employers do so at high rates because the 401 investment is in the company itself. but then again, free money is free money (as long as the company is still there upon retirement and the 401 is invested in it).

guitarwes · November 13, 2012 6:08AM

Nevermind my last outburst. I was thinking 25% matching, not 25% of what YOU contribute. That's still good though.

My company matches dollar for dollar up to 4% of my salary (this is how I read your comment as being the first time).

I put 5% in and they match it with 4%. So 9% of my gross salary. I guess that's a little better than a 25% contribution match.

bestmr · November 13, 2012 6:42AM

I had to sell my first because when my dad died last november, he had no life insurance and with no income coming into for my mom, I had to step up and do something. I figure taxes will be around $4k next year, it's what I've set aside anyways, leaving me with a gain of around $2k over 4 years.
Now, ideally, I'd love to do the 401k and then also get some metals. But, that's not possible atm. Doing the minimum of 6% is about $100 a month leaving me with little to no room for anything PM wise. Once my mom hits 60 and gets retirement, things should change financially and I might be able to do both but atm, it's one or the other.

gsa1fan · November 13, 2012 7:55AM

Do 401K at work, free $$ do it/that. Most are before taxes so you never feel a hit. Then buy a 1oz ASE or 1/10 oz AGE every pay check or both

JMHO, it's your $$ so never apologize WTF you do with it

tneig · November 13, 2012 9:47AM

Be sure of the taxes and penalties. It could be more.
$1700 - 10% early withdrawal penality.
Plus taxible as income amount added to your total income.

cohodk · November 13, 2012 11:08AM

50 cents of every dolar

Guaranteed 50% return. VERY STUPID not to take it.

Baley · November 13, 2012 2:12PM

Agree with those who say to at least put into your 401k enough to get the match, and yes, it's a guaranteed 50% return as of the day each payment goes in, however that does Not guarantee that what you put it into will not go down sometimes, as you've seen, if you're forced to cash it out at a particular time, it may be worth more or less than it was on the day you put it in or any day in between. The markets will fluctuate, over the long term they average up though

LowBudget · November 13, 2012 3:15PM

<< Be sure of the taxes and penalties. It could be more.
$1700 - 10% early withdrawal penality.
Plus taxible as income amount added to your total income. >>

thats the only catch to all of the 401k's

pursuitofliberty · November 15, 2012 1:11PM

Lots of peope are scared of the market (this week especially), but I think the answer is ...

do both ...

Sounds like you are thinking of 9-10% total towards a future ... and frankly, IMO, any match is a good match

So, along that line, maybe go with 4 to 5% on the 401K; at 4.5% from you, the 1.5% (50% match of your first 3%) gives you 6% total, and insures you a 33.3% gain on the day of entry ... 6% isn't huge, but it's nothing to scoff at either.

Then you could put the rest in PM's. If the 4-5% per month is too small to make you feel like you're getting a lot, rethink stacking. Buy 90% quarters and fill up rolls. Pretty soon it's a bag.

bestmr · November 15, 2012 1:33PM

Ended up doing 6% with 3% match. I'll see how that affect my paycheck and go from there. Still buy silver or gold when i can of corse. Ty for all the pushing saying it was a stupid ideanot to do it. Lol

fishcooker · November 16, 2012 9:55PM

derryb · November 16, 2012 10:58PM

<< Ended up doing 6% with 3% match. I'll see how that affect my paycheck and go from there. Still buy silver or gold when i can of corse. Ty for all the pushing saying it was a stupid ideanot to do it. Lol >>

What they got ya invested in? do you have any choices?

401k or PM's

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