should i open a 401k even if i dont plan on staying at this company too long?

[jayk2k3]

should i open a 401k even if i dont plan on staying at this company too long? I will not get the benefit of company match if i dont stay 5years.

[disneysteve]

Sure. You still get the tax benefits of paying less in taxes now and tax-free growth of the money in the account. If and when you leave the company, you can roll the money over into an IRA.

[dgcoupe]

will u get to keep the company match even if u didn't stay till certain number of years where you've earned the match?

[disneysteve]

I will not get the benefit of company match if i dont stay 5years.

will u get to keep the company match even if u didn't stay till certain number of years where you've earned the match?

dgcoupe, OP answered that in the original post. Most companies have a vesting period. At my wife's job, it was 2 years. Some places do have a tiered vesting schedule so that it may take 5 years to be fully vested but you might get 20% after 1 year, 40% after 2 years, etc.

[Like2Plan]

will u get to keep the company match even if u didn't stay till certain number of years where you've earned the match?

You have to be vested in order to take the company match away with you. The policy for how long it takes to be fully vested is set by the company.
Still, it is always a good idea to participate if the tax benefits work out to be favorable. A comparison between a roth and the 401k should be done.

[jIM_Ohio]

How do you know you will not be there long? You should use the 401k, and take advantage of the match. You never know what curve life does or does not throw you, and if you work there 5 years, you have a match you would not otherwise have had.

Do not use short term events to make long term decisions.

[jpg7n16]

I will not get the benefit of company match if i dont stay 5years.

Correction: you will not get the full benefit of company match if you don't stay 5 years.

By law, in a cliff vesting plan you must be fully vested after 3 years.

Cliff vesting: After 1 year- 0%, 2 years- 0%, 3 years- 100%

So in order to get to 5 years, you must be on a graded schedule.

Graded: After 1yr- 0%, 2yr- 20%, 3yr- 40%, 4yr- 60%, 5yr - 80%, 6yr- 100%


And if your's is 5 years, then it likely just gets you 20%/yr (20,40,60,80,100)


So if you leave the company after 3 years, you will get 60% of the company match + its growth. (You will always get 100% of your own contributions + their growth)

(source: 401K Vesting Schedules - Know the Impact of Your 401K Vesting Schedule)

[cypher1]

How do you know you will not be there long? You should use the 401k, and take advantage of the match. You never know what curve life does or does not throw you, and if you work there 5 years, you have a match you would not otherwise have had.

Do not use short term events to make long term decisions.

I was just going to state the same. In my early 20's I thought the same about a particular company and didn't contribute. I thought I'd be there for only 12-18 months, and ended up staying for 4 years, before a better opportunity was offered. Just shows you time goes by quick, and might as take advantage of tax savings while contributing to your long term future at the same time.

[jIM_Ohio]

I was just going to state the same. In my early 20's I thought the same about a particular company and didn't contribute. I thought I'd be there for only 12-18 months, and ended up staying for 4 years, before a better opportunity was offered. Just shows you time goes by quick, and might as take advantage of tax savings while contributing to your long term future at the same time.

LOL
right

when in school, 1 year seems like a LONGGGG time.... once working, 4-10 years can FLY by and you don't even realize it- life gets busy when 10 hours of your day is dedicated to just one endeavor (a job) to point where even something like a job search (which might take 5 hours per week) takes "forever" to find a job to replace the job you have.

[jayk2k3]

Thanks for explaining the vesting thing to me. i will open the 401k