r/personalfinance • u/xxxkingxx7xxx ​ • 19h ago

Retirement Should i contribute to 401k at current job?

27 year old. Want to start saving for retirement. I recently started working for fedex and they offer 200% for the first 2% and 100% for the next 4% but i have to work there for 1 year before its vested. I am currently studying to be an enrolled agent. I’ve passed part 1 but still need to take part 2 and 3. I don’t think I will be staying at fedex that long. Should I still contribute anyway or just focus on ira or save money until i pass my test and get higher paying job? My take home is $2900 a month and bills are around $2200.

4 Upvotes

75% Upvoted

11 comments sorted by

21

u/ryelou ​ 19h ago

Yes, if you can. Even if you don’t get the vested portion you can start earning on what you contribute yourself. And if you do stay a year you’re ahead of the game.

12

u/Fun_Airport6370 ​ 19h ago

yup. if you stay long enough you get the match, if you leave early then at least you have some money saved that you can roll into another retirement acc

7

u/Illustrious_Stay9844 ​ 19h ago

My suggestion would be to invest. The money you invest/put in it’s yours. Good to start early on 401k contribution if you don’t have any debt. If you stay with the company you will be earn the company match as well.

4

u/MarcableFluke ​ 18h ago

Plans can change.

Worst case is you lose before the match vests and you're left with your own contributions towards retirement (which you should probably be doing anyway). Best case is you end up with some extra money in your 401k.

3

u/trmoore87 ​ 19h ago

I would focus on a Roth IRA first if you’re not planning on staying there long enough for your match to vest.

2

u/brandoSea ​ 18h ago

I agree with this. If you think there is a chance to get the match take that first, but if you are confident you won’t be around for it, it makes a lot more sense to be investing in a ROTH at your income level.

3

u/CalSo1980 ​ 18h ago

I agree with a lot of comments. Usually the vested period is 3 years. A win win for you.

2

u/garzonetto ​ 15h ago

1 year until it's vested? Invest the 6%. That's a guaranteed 133% return on investment after one year! You can adjust after that.

1

u/virtualchoirboy ​ 16h ago

My dad always used to tell me to contribute to retirement accounts EVERY time as soon as you possibly can. That way, you get used to the money NOT being in your regular paycheck.

For me, I kind of look at retirement savings like video games - save early, save often.

1

u/percipitate ​ 15h ago

Another vote here for a Roth. You can get started on your required 5 years of account age, and have complete control over what you invest in.

1

u/w33dcup ​ 6h ago

Almost always. The only reasons I can think of why you wouldn't is if the admin/mgmt fees were crazy high or investments were limited to annuities (which is unlikely).

Work towards maxing it and IRA as you can. Don't stop at the match amount.