Re: 401K good/bad?


Protagonist wrote:
Last 401K I lost lot of money, because invested all into the company
stocks, it went bankrupt.
My new employer offers 401K now, they match 50% of the first 5%
contribution. What a deal!
Previous company matched 100% up to 6%.
My question is, what stake/interest a company has to match 401K
contributions?
Can they use that money in the 401K account for their own purposes?
I know, in profit sharing plans they can to some time period!
Thx, Js

Most decent companys offer (and sometimes match) as a way to get talent
to stay. It's a win-win if done right.

Of note, the company MUST put your contribution into the investment
within 7 days. If they tell you different, don't contribute. As others
here know, I lost some (but through a slow legal system got most of it
back). They were using our money to pay the bills of their fat
lifestyles.

In addition to the excellent points John made... The other thing I
would add is some employers require you to invest a portion of your
contribution into the company stock for them to even make a match. Add
to this lopp-sided plan, the company contribution is yet even more
company stock. Not a good in thing my book. Luckily, since Enron, many
employers have stopped this practice and match you with third party
investment choices.

Bottom line, if f the company matches some amount into a choice of
investing vehicles then that's fine. Check your account from time to
time to make sure the company is putting your money in in a timely
fashion though.

--
Bill

.

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