401k alternative?

Question

I make roughly 1,000 a month after taxes. My company offers a 50% match of the first 3% of my income. I dont plan on being here more than a few months. Should I go with the 401k or should I just open up an IRA?

Answer 1

I would do both, if you can. Even a few months would be worth the company match. However, check out how easy it would be to roll that 401K to another. That may be a problem.

Answer 2

well, that really depends on what a "few months" means.  Alot of time you do not get fully invested in a 401K unless you're there a certain amount of time.  Which means you will not get the full growth of your 401K.  Check to see how long it takes to be fully vested, if you plan on being there that long, it might be a good idea to have the company match to get you more money.

On the other hand, you have to be careful with 401Ks now because of the fluctuating stock market.  You could possibly end up losing more than you put in ...which won't happen with an IRA.  You just really have to weigh your options, and get details on each plan.

Answer 3

If you are really going to leave in a few months, starting the 401(k) is not worth it.  You will not get to keep the employer match unless you stay long enough to become vested (check the plan rules).

Answer 4

That depends on whether or not you are vested in the company match from day one.

"Vesting" means how much of the employee match they will let you take out if you leave your job.

If you are partially to fully vested on you contributions, I would go with the 401(k) because you are getting free money (the match).  Then roll the 401(k) over to an IRA after you leave the company.

Otherwise, go with the IRA.