My daughter is starting a job working for a good size company that offers 401K that matches up to 6% and the company pays 4% whether you contribute or not. It "vests" in 3 years. My questions are...What does vesting mean? Does a person control the investments of a 401K or does your employer control what gets invested in? Should a person contribute the 6% to 401K or invest 6% of earnings on your own? The 6% match seems hard to ignore...but if the investment only returns 5-6% returns per year.....would you be better off going on your own with the 6% and forget the match? Can you take your contributions out of a 401K anytime without penalty or is it locked in for long haul?
Just a few questions she asked me and I don't have a clue. I have Roth IRA's and have never had a 401K.
Thanks for any advice you all have.
Just a few questions she asked me and I don't have a clue. I have Roth IRA's and have never had a 401K.
Thanks for any advice you all have.