401k

Apr 27, 2019 24 Comments

My company Matches 3% for my 6% contribution.
Is it worth to enroll in 401k if I am guaranteed that I will withdraw money after 3 years ? I will need to pay 10% penalty in addition to the tax.

Let’s say I have 30k(including employer contribution) at the end of 3 years in my 401k.
If I withdraw I will be paying 30% tax + 10% penalty so I get 18k ?

24

comments

Want to comment? LOG IN or SIGN UP
  1. TOP
  2. RECENT
  3. OLD
 TOP 24 Comments
  • Tesla
    uhhyhhgh

    Go to company page Tesla

    uhhyhhgh
    The penalty will be more than your company’s match. Doesn’t make any sense.
    Apr 27, 2019 5
  • SAP
    $AP

    Go to company page SAP

    $AP
    Why do you want to withdraw your money 3 yrs later? Just keep it till you turn into 59.5 then no tax for withdrawal.
    Apr 27, 2019 3
  • Google
    3/2=1

    Go to company page Google

    3/2=1
    If you are leaving out of country in 3 years then definitely. Your current tax of 30% is way more than the 10% penalty you pay. Matching upto employer contribution always makes sense
    Apr 27, 2019 6
    • Google
      3/2=1

      Go to company page Google

      3/2=1
      Haha not really. Using upper case to help you to actually read what I wrote since you seem to have problem with that.
      Apr 30, 2019
    • VMware
      SweetPease

      Go to company page VMware

      SweetPease
      I got to be honest- I read OPs question and totally skipped your previous comment... gotta get back to reading getting more TC threads
      Apr 30, 2019
  • VMware
    SweetPease

    Go to company page VMware

    SweetPease
    The only way to win it to withdraw it when your tax rate is very low. So if you take a few years off, withdraw some then to get the lower tax rate. Mother wise, just wait until you are old.
    Apr 27, 2019 3
  • New
    adxm

    New

    adxm
    Always Max our your contribution to assure the company match.
    If you wish to save more, max out your Roth IRA first, then Max out the traditional IRA, and if you still have more money to save go back and Max out the 401k.

    The penalty of 10% applies only if you withdraw money before you’re 59.5 years old, which you really shouldn’t, unless there’s force majeure
    Dec 17, 2019 0