Amazon's 401(k) Plan Is Pretty Brutal, Too

Re:Amazon's 401(k) Plan Is Pretty Brutal, Too by jaworrom on Monday August 24, 2015 @12:41PM (#10111095)

Why anyone would invest in a 401k now is beyond me.

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Re:Amazon's 401(k) Plan Is Pretty Brutal, Too by jrbancel on Monday August 24, 2015 @01:52PM (#10111700)

1) Taxes

For example, an average software engineer making $150,000, contributing 10% to her 401k will reduce her taxable income to $135,000. At a 28% marginal tax rate, she will save $4,200 on taxes.

2) Free money

If the employer matches 50% of the contributions, the employee will end up with an additional $7,500 on her 401k account.

3) Very few constraints

It depends on the employer but she could be free to invest the 401k money as she wants. She doesn't have to put it in a specific set of funds.

In a nutshell, she would get $11,700 more than if she hadn't used her 401k and is free to invest as she pleases.

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Re:Amazon's 401(k) Plan Is Pretty Brutal, Too by parsnips on Monday August 24, 2015 @12:59PM (#10111259)

I would think nowish would be the time to get money into equities.

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Re:Amazon's 401(k) Plan Is Pretty Brutal, Too by toephu2 on Monday August 24, 2015 @01:38PM (#10111592)

what do you think a 401k does behind the scenes?

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Re:Amazon's 401(k) Plan Is Pretty Brutal, Too by parsnips on Monday August 24, 2015 @02:33PM (#10112034)

Depends. I have a money market option in my 401k account, for example.

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Re:Amazon's 401(k) Plan Is Pretty Brutal, Too by calbear81 on Monday August 24, 2015 @04:49PM (#10112850)

You should probably not put too much in that money market option (maybe as a rainy day fund).

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Re:Amazon's 401(k) Plan Is Pretty Brutal, Too by thearn4 on Monday August 24, 2015 @02:55PM (#10112218)

Assuming you're young: far better now than later.

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