As the saying goes, not so fast! Last week I talked about how many employers match your contributions to a 401(k) plan—often dollar for dollar or 50 cents on the dollar. This is free money. But it’s not the most important part of a 401(k)—it’s the dessert not the main course.
Like I said last time, the two most important things about a 401(k) plan are 1) it is simple and automatic and 2) it is tax-deferred. None of that changes if the plan lacks a match. So in my view, for the vast majority of Americans who have one, the 401(k) is the place to start.
I want to flesh out why the simple and automatic is important. Say you take a new job and they have a 401(k) with no match. If you fill out the paper work, sign up to contribute 6%-8% of your before tax salary, and pick investments, it is set it and forget it. After that you’ll be investing a little bit at a time—usually every two weeks or once per month. The pros call that dollar cost averaging, and it helps you buy more when the market is low and less when the market is high.
On the other hand, if you don’t fill out the 401(k) paper work and think, “Instead I will do this on my own,” you are going to have to set everything up by yourself. For most people, that’s like starting a diet or redoubling their exercise. We want to do it, but often we don’t or we procrastinate.
Also On Black America Web:
This Week’s Celebrity Instagrams (11/26-12/2)
30 photos Launch gallery
1. Little Legend and Puddy 😍😍😍😍
1 of 30
2. "You on point Phife?" "all the time,Tip". 💥 #bannedfromnormal
2 of 30
3. Vegan! The Impossible burger at Crossroads
3 of 30
4. Lawrence #BeforeandAfterEpisodes 1-4: 184lbs 13% body fatEpisode 8: 196lbs 8% body fat S/O @coachdaveboxing with the works outs and @kildareriordan with the nutrition
4 of 30
5. Jus haaaanngin out
5 of 30
6. Meanwhile back at home in Atlanta GA someone mad they not on the 🛳. 😳
6 of 30
7. No limits... Photo cred: Chris Bridges @ludacris
7 of 30
8. new new
8 of 30
9. Apparently my 260lbs is too much for the actual vines in the Hawaiian jungles to hold me without breaking and me falling hundreds of feet. So for safety purposes, I'm forced to swing thru #Jumanjj on wires strong enough to hold 12 adult buffaloes and 1 adult Rock. #OnSet #Jumanji #IronicallyIEatBuffaloDailyForLunch #MoreManThanNatureKnowsWhatToDoWith
9 of 30
10. hey ma! 🎎#wcw 💙
10 of 30
11. Surprise visit to our factories!!! #GoodAmerican #USA
11 of 30
12 of 30
13. Peachy Keen 🔥✨⚡️
13 of 30
14. If this don't look thankful I don't know what does. Happy Thanksgiving to you and yours. #UltraBlessed #24kMagic #SweetPotatoFly
14 of 30
15. Late nights @nbcmarlon with the writers... we in here!!!
15 of 30
16. There goes my baaaaaaaaabbbbyyyyy #QueenKingMagic!!! We're up to something! Ira BIG!!! Stay out our buisness -
16 of 30
17. You want to win every game you play but when you come home to these faces... who cares. #ILoveYouGirls best part of my day, everyday!
17 of 30
18. Steady,steady..... full size jenga.. "I got this one "???? Or do I ?
18 of 30
19. Cornrows kind of day 😉@dontaysavoy2 you convinced me and I love. ❤️️
19 of 30
20. #BrotherlyLove #tbt
20 of 30
21 of 30
22. #basel #TeamLOVE @kingcombs
22 of 30
23. Just introduced a special screening of @directher 's groundbreaking (must see) documentary @13thfilm with my brother @themichaelealy | @unitedblackout #blackoutblackfriday
23 of 30
24. Me & Vanessa Williams giving #DuckLips #Pose on the set of #DaytimeDivas @vh1 - Coming Soon to a tv near you. Lol. - My make up done by @makeupsurgeon
24 of 30
25. This picture just makes me wanna praise the Lord, you hear me!!!!!! Yes Lord brotha #TEDDYCAMPBELL What a #man !!! You are everything right on this picture husband ......... #gorgeous #stylish #classy #strong #masculine #king #sexy #debonair #gentlemenstyle And that #bible in your hand just seals the deal for me (probably cause i know that, that is what helped you become just as amazing as you look😘). While my heart and mind experiences the goodness of God at #church on Sundays, my eyes experiences the goodness of Teddy😍. Amen somebody🙌🏽. "Bless the Lord oh my soul and all that is within me bless his holy name" #myman #myhusband #goodman #blackman #dapperman #godlyman #goodfather #mybestfriend
25 of 30
26. Yesterday was my mama's 53rd birthday!!!!! Got to celebrate with her all day. If this is what I have to look forward to I can't wait. Looking like a soft bucket a cocoa butter. Yaaaaaaaaaas! 😍😍😍 love you mommy!
26 of 30
27. "Shout out to @PureAtlanta for getting the family right"....I'm loving this jogger. 😍😍
27 of 30
28. This pic warms my heart ❤️ #myLogiebeans and aunt aunt umba @itowandabraxton 😘
28 of 30
29. You will always be my baby😜. #HappyBirthdayReginae #mybaby18
29 of 30
30. GC "Gods Child" Red on Red SweatSuit available now at www.MonicaApparel.com ... Take Your Crown wherever you go!! I'm pictured in a Medium... Go to the site now for other options ... cc: @trukernell
30 of 30