Ha ha--first paycheck!

[bailey]

401k is still playing the gamble of the stock market and I have also seen people loose everything thay had from it.
you might as well go to vages and invest in the slot machine too.
at least that is the way I see it

[mbossman2]

the big advantage of 401k's is that allow you to tkae the money out of your pay pre-tax, basically deferring the tax collection until you are 60. the reasoning is that the tax bracket you are in now is higher than the tax bracket you will be when you retire. So why pay the tax man 35% now, when you can pay him 20% later.

Now for you young 'uns that tax break is minimal (or non-existent) as early in your working lives you are more than likely in the lowest tax bracket possible (and will probably never be in that tax bracket again). In your case you are not paying 15% taxes to pay 20% taxes later. For you, I would look into what is called a Roth IRA, this allows you to contribute post tax dollars in to an investment account which will grow completely tax free withdrawable when you retire.

http://www.fool.com/money/allaboutiras/allaboutiras.htm

Originally Posted by bailey 401k is still playing the gamble of the stock market and I have also seen people loose everything thay had from it. you might as well go to vages and invest in the slot machine too. at least that is the way I see it

not necessarily. most companies offer a wide range of investments from money markets (basic savings accounts) all the way up to an including foreign market penny stocks (they make the lottery look like a good investment).

The stock market can hurt you if (1) you don't know the rules and (2) if you bet on one thing and one thing only. The best way to invest is to spread your money across as many companies as possible (via mutual funds when you 1st start out) and do what is called dollar cost averaging (http://invest-faq.com/articles/strat-dol-val-avg.html). Over the long term, the stock market as a whole will give you a good solid return on your dollar (the market has, since its inception, averaged approx 10% annual growth...the key part there is averaged..it will go up and it will go down...on the whole it will go up)

[sdkfz]

I am the 401K advisory business - if the firm offers a match it is like someone walking up to you and asking "Hey you want this 100.00 bill? No Strings" Free money! How it works (If it is offered) is for every dollar you save the comapny gives you some too. Sometimes as much as a one for one match up to say 5% of your annual income. So you save 1.00 and the firm at a match of 50% puts in another .50 for 1.50 total. 50% interest in other words.

Investing the money - you are almost guaranteed a range on investments from money market (ie savings account) to the previously mentioned really crazy foreign stuff. You MUST invest in some stocks and bonds else you are losing money. If inflation is say 4% and you earn less than that in interest then your dollar and less then 4 cents in a year can not buy what the dollar could today.

Anyway, sure you will lose money in the short run, but the stock market is always going UP, you just need to be patient. Check out these charts.
http://www.stockcharts.com/charts/historical/
In the short run it has its ups and downs but you are investing for 45 years here (Assuming you are young) and when you start getting closer to retirement you shift from the risky stuff to the safer stuff when you no longer have the time to wait for the upswing.

Social Securty will not go away (it can not since it takes your taxes and pays them right back out - if they saved your money and gave it back to you in retirement then they could end it and just give you what ever you have paid into the system back - but it was a depression fix it and they never thought people would stop having so many kids) but it will not buy you anything when you get there - take a 401K if is offered and increase the contributions when you get a pay raise splitting the raise up.

Oh - never ever take the money out - unless you are eligible to take it out without penalties - the penalties are about 50% of the amount you take.

End ramble....