Comments on: How to get a great return in your 401k during a recession http://www.christianpf.com/how-to-get-a-great-return-in-your-401k-during-a-recession/ Christian Personal Finance - Financial help, debt help and other financial resources Sat, 21 Nov 2009 08:03:07 -0600 hourly 1 By: Carnival of Debt Reduction: It's A Marathon, Not A Sprint Edition! | Man Vs. Debt http://www.christianpf.com/how-to-get-a-great-return-in-your-401k-during-a-recession/comment-page-1/#comment-12180 Carnival of Debt Reduction: It's A Marathon, Not A Sprint Edition! | Man Vs. Debt Mon, 04 May 2009 08:10:15 +0000 http://www.christianpf.com/how-to-get-a-great-return-in-your-401k-during-a-recession/#comment-12180 [...] Christian Debt Help submitted a post called How to get a great return from your 401k in a recession. [...] [...] Christian Debt Help submitted a post called How to get a great return from your 401k in a recession. [...]

]]> By: bob http://www.christianpf.com/how-to-get-a-great-return-in-your-401k-during-a-recession/comment-page-1/#comment-12093 bob Thu, 30 Apr 2009 21:09:31 +0000 http://www.christianpf.com/how-to-get-a-great-return-in-your-401k-during-a-recession/#comment-12093 Matt I agree - the benefit of lowering monthly expenses by paying off debts is a great one - I consider it more of a protection measure against job loss, etc Matt I agree – the benefit of lowering monthly expenses by paying off debts is a great one – I consider it more of a protection measure against job loss, etc

]]> By: Matt Jabs http://www.christianpf.com/how-to-get-a-great-return-in-your-401k-during-a-recession/comment-page-1/#comment-12078 Matt Jabs Thu, 30 Apr 2009 15:28:45 +0000 http://www.christianpf.com/how-to-get-a-great-return-in-your-401k-during-a-recession/#comment-12078 I agree with Bob, Stateworker, & Pochax. Here's my spin... I am not contributing to my 401K right now, neither is my wife contributing to her 403b, although we plan to eventually...here's why: We have $12,000 in consumer debt that we need to pay off ASAP, it is costing us more money than we could save in our retirement accounts. My employer matches my 401K, but I'm only 20% vested per year after 3 years. I have been here almost 2 years, so it will be another 16 months before I am vested even 20%. At the end of that 16 months my consumer debt will be gone, and my contributions will receive some match. Sometimes paying off debt is the most important way to save for retirement, which is the case for me...at least for the next 12 months...Lord willing. I agree with Bob, Stateworker, & Pochax.

Here’s my spin…

I am not contributing to my 401K right now, neither is my wife contributing to her 403b, although we plan to eventually…here’s why:

We have $12,000 in consumer debt that we need to pay off ASAP, it is costing us more money than we could save in our retirement accounts.

My employer matches my 401K, but I’m only 20% vested per year after 3 years. I have been here almost 2 years, so it will be another 16 months before I am vested even 20%. At the end of that 16 months my consumer debt will be gone, and my contributions will receive some match.

Sometimes paying off debt is the most important way to save for retirement, which is the case for me…at least for the next 12 months…Lord willing.

]]> By: Money Beagle http://www.christianpf.com/how-to-get-a-great-return-in-your-401k-during-a-recession/comment-page-1/#comment-12076 Money Beagle Thu, 30 Apr 2009 14:53:36 +0000 http://www.christianpf.com/how-to-get-a-great-return-in-your-401k-during-a-recession/#comment-12076 My employer was matching 100% up to the first 6% that we contributed. However, the paycheck that I received today was the end of their contributions, as they are eliminating it for cost cutting purposes. I suspect this will become more and more the norm. My employer was matching 100% up to the first 6% that we contributed. However, the paycheck that I received today was the end of their contributions, as they are eliminating it for cost cutting purposes.

I suspect this will become more and more the norm.

]]> By: pochax http://www.christianpf.com/how-to-get-a-great-return-in-your-401k-during-a-recession/comment-page-1/#comment-12061 pochax Thu, 30 Apr 2009 01:09:48 +0000 http://www.christianpf.com/how-to-get-a-great-return-in-your-401k-during-a-recession/#comment-12061 two other important points about matching funds from employers: 1) some companies require that one stay with the company for a certain amount of time ("vesting time") before you actually can take that money in case you leave for another job (you will always be vested in your contributions - or at least you should be). 2) those matching funds are always considered pre-tax money even if you are contributing to a Roth 401k where your contributions are taxed (and gains are tax-free); the employer-matching money will be categorized as tax-deferred (ie. you will pay taxes when you withdraw the money in retirement). two other important points about matching funds from employers:
1) some companies require that one stay with the company for a certain amount of time (”vesting time”) before you actually can take that money in case you leave for another job (you will always be vested in your contributions – or at least you should be).

2) those matching funds are always considered pre-tax money even if you are contributing to a Roth 401k where your contributions are taxed (and gains are tax-free); the employer-matching money will be categorized as tax-deferred (ie. you will pay taxes when you withdraw the money in retirement).

]]> By: Kacie http://www.christianpf.com/how-to-get-a-great-return-in-your-401k-during-a-recession/comment-page-1/#comment-12050 Kacie Wed, 29 Apr 2009 18:26:25 +0000 http://www.christianpf.com/how-to-get-a-great-return-in-your-401k-during-a-recession/#comment-12050 My husband used to have a 100% 401k match up to 6% of his salary. It was awesome. They got rid of the match earlier this year so the company could save money. We're hopeful that it will be reinstated at some point soon. My husband used to have a 100% 401k match up to 6% of his salary. It was awesome. They got rid of the match earlier this year so the company could save money. We’re hopeful that it will be reinstated at some point soon.

]]> By: bob http://www.christianpf.com/how-to-get-a-great-return-in-your-401k-during-a-recession/comment-page-1/#comment-12046 bob Wed, 29 Apr 2009 17:06:04 +0000 http://www.christianpf.com/how-to-get-a-great-return-in-your-401k-during-a-recession/#comment-12046 Stateworker, you are right, many employers have been cutting back on raises - I know the feeling very well. I am not suggesting that any of us should "count on" raises now, or even in good times, that was actually just an aside from what the article was about. My point was that if you use increases in income - be it a raise, tax refund, second job, etc - to fund your retirements accounts, you won't notice a change in your standard of living... oh and you are right on about depending on God - we can sometimes forget that He is our true source! Stateworker,
you are right, many employers have been cutting back on raises – I know the feeling very well. I am not suggesting that any of us should “count on” raises now, or even in good times, that was actually just an aside from what the article was about. My point was that if you use increases in income – be it a raise, tax refund, second job, etc – to fund your retirements accounts, you won’t notice a change in your standard of living…

oh and you are right on about depending on God – we can sometimes forget that He is our true source!

]]> By: StateWorker http://www.christianpf.com/how-to-get-a-great-return-in-your-401k-during-a-recession/comment-page-1/#comment-12045 StateWorker Wed, 29 Apr 2009 16:50:46 +0000 http://www.christianpf.com/how-to-get-a-great-return-in-your-401k-during-a-recession/#comment-12045 Hi bob, I think I was a little harsh. My other point is, "during a recession" -- as this post is titled -- it's not enough to count on others to help you out: in this case, employers with 401(k) matches and and raises. We need to count on God, turning to Him in prayer and fasting and immersing ourselves in Scripture. And we need to make use of the gifts He's given us, finding unconventional ways to increase one's income, be it through freelancing, money-making hobbies, or finding creative ways to reduce expenses. Hi bob,

I think I was a little harsh.

My other point is, “during a recession” — as this post is titled — it’s not enough to count on others to help you out: in this case, employers with 401(k) matches and and raises.

We need to count on God, turning to Him in prayer and fasting and immersing ourselves in Scripture. And we need to make use of the gifts He’s given us, finding unconventional ways to increase one’s income, be it through freelancing, money-making hobbies, or finding creative ways to reduce expenses.

]]> By: StateWorker http://www.christianpf.com/how-to-get-a-great-return-in-your-401k-during-a-recession/comment-page-1/#comment-12043 StateWorker Wed, 29 Apr 2009 16:31:18 +0000 http://www.christianpf.com/how-to-get-a-great-return-in-your-401k-during-a-recession/#comment-12043 Hi bob, I read your site daily, enjoy it, and respect your advice, but I just wanted to point out the reality some of us live in. I work for one of the largest and most prestigious state university systems in the nation. I took a 10% pay cut a year and a half ago to come here from industry, because of the university's reputation for job security, location (near my local church), and a very forward-thinking, fun, and competent team of co-workers. Unfortunately, my employer has never matched 403(b) contributions, and raises were frozen the year I arrived (that would make this the second year without a raise for me). My point being, your advice to count on raises seems almost flippant given the cutbacks many companies and organizations are making. My wife and I live frugally (cook in bulk once a week, eat out once a week, don't own a working television, only one car, don't shop "for fun") and thank God that we together earn enough to save for an emergency fund (we should hit the "six months' expenses" mark by October), but with a desire to have children soon and a mortgage rate adjustment coming soon, it seems we'll be saving for everything BUT retirement for the next few years. Kind of bums me out since I think this is a GREAT time to invest for the long-term. Hi bob,

I read your site daily, enjoy it, and respect your advice, but I just wanted to point out the reality some of us live in.

I work for one of the largest and most prestigious state university systems in the nation. I took a 10% pay cut a year and a half ago to come here from industry, because of the university’s reputation for job security, location (near my local church), and a very forward-thinking, fun, and competent team of co-workers.

Unfortunately, my employer has never matched 403(b) contributions, and raises were frozen the year I arrived (that would make this the second year without a raise for me).

My point being, your advice to count on raises seems almost flippant given the cutbacks many companies and organizations are making.

My wife and I live frugally (cook in bulk once a week, eat out once a week, don’t own a working television, only one car, don’t shop “for fun”) and thank God that we together earn enough to save for an emergency fund (we should hit the “six months’ expenses” mark by October), but with a desire to have children soon and a mortgage rate adjustment coming soon, it seems we’ll be saving for everything BUT retirement for the next few years. Kind of bums me out since I think this is a GREAT time to invest for the long-term.

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