Can I use my declining to put money into a 401k (for which they would match up to 5% if I did) to negotiate a...
I do not want to contribute to my 401k, however, my contracting company does offer a match of 5%. Can I use the declining of this 401k to negotiate a 5% higher (or a bit lower) salary? Is the company actually forking the bill for the match, or is it an incentive offered by the government?
I'm young and don't know how 401ks work, but am very involved in my investments. I don't like the aspect of how a 401k limits my access to both my money and my investment opportunities, plus the additional separate portfolio management. Please do not tell me I need to save, because I am, but not through my 401k.
investing 401k employer-match
edited 23 mins ago
Kat
920410
asked 7 hours ago
TrevorKSTrevorKS
1351110
|
show 4 more comments
I do not want to contribute to my 401k, however, my contracting company does offer a match of 5%. Can I use the declining of this 401k to negotiate a 5% higher (or a bit lower) salary? Is the company actually forking the bill for the match, or is it an incentive offered by the government?
I'm young and don't know how 401ks work, but am very involved in my investments. I don't like the aspect of how a 401k limits my access to both my money and my investment opportunities, plus the additional separate portfolio management. Please do not tell me I need to save, because I am, but not through my 401k.
investing 401k employer-match
edited 23 mins ago
Kat
920410
asked 7 hours ago
TrevorKSTrevorKS
1351110
2
Probably no harm in asking, but I wouldn't count on it. But perhaps you should investigate how 401(k)s work before leaving free money on the table
– Kevin
7 hours ago
I feel even a match of 5% of my salary is not enough to justify locking up my money until my near-dead years. Also, the lack of investment opportunities 401k offers, i feel i can invest my money personally, and grow my savings higher than if i had left it in a 401k, even considering the match.
– TrevorKS
7 hours ago
8
@TrevorKS Really - you can beat a 100% return on your own?
– D Stanley
7 hours ago
6
The money doesn't have to stay there until you're near-dead. As soon as you leave the employer, you can roll the money into an IRA, and invest it in whatever you want.
– stannius
7 hours ago
2
You should seriously learn about 401 plans. Even if yours doesn't offer great investment options there is a reason common wisdom is to max out your contribution or at the very least make sure you get your employer match.
– topshot
7 hours ago
|
show 4 more comments
I do not want to contribute to my 401k, however, my contracting company does offer a match of 5%. Can I use the declining of this 401k to negotiate a 5% higher (or a bit lower) salary? Is the company actually forking the bill for the match, or is it an incentive offered by the government?
I'm young and don't know how 401ks work, but am very involved in my investments. I don't like the aspect of how a 401k limits my access to both my money and my investment opportunities, plus the additional separate portfolio management. Please do not tell me I need to save, because I am, but not through my 401k.
investing 401k employer-match
edited 23 mins ago
Kat
920410
asked 7 hours ago
TrevorKSTrevorKS
1351110
I do not want to contribute to my 401k, however, my contracting company does offer a match of 5%. Can I use the declining of this 401k to negotiate a 5% higher (or a bit lower) salary? Is the company actually forking the bill for the match, or is it an incentive offered by the government?
I'm young and don't know how 401ks work, but am very involved in my investments. I don't like the aspect of how a 401k limits my access to both my money and my investment opportunities, plus the additional separate portfolio management. Please do not tell me I need to save, because I am, but not through my 401k.
investing 401k employer-match
investing 401k employer-match
edited 23 mins ago
Kat
920410
asked 7 hours ago
TrevorKSTrevorKS
1351110
edited 23 mins ago
Kat
920410
asked 7 hours ago
TrevorKSTrevorKS
1351110
edited 23 mins ago
Kat
920410
edited 23 mins ago
Kat
920410
edited 23 mins ago
Kat
920410
920410
asked 7 hours ago
TrevorKSTrevorKS
1351110
asked 7 hours ago
TrevorKSTrevorKS
1351110
asked 7 hours ago
TrevorKSTrevorKS
1351110
1351110
2
Probably no harm in asking, but I wouldn't count on it. But perhaps you should investigate how 401(k)s work before leaving free money on the table
– Kevin
7 hours ago
I feel even a match of 5% of my salary is not enough to justify locking up my money until my near-dead years. Also, the lack of investment opportunities 401k offers, i feel i can invest my money personally, and grow my savings higher than if i had left it in a 401k, even considering the match.
– TrevorKS
7 hours ago
8
@TrevorKS Really - you can beat a 100% return on your own?
– D Stanley
7 hours ago
6
The money doesn't have to stay there until you're near-dead. As soon as you leave the employer, you can roll the money into an IRA, and invest it in whatever you want.
– stannius
7 hours ago
2
You should seriously learn about 401 plans. Even if yours doesn't offer great investment options there is a reason common wisdom is to max out your contribution or at the very least make sure you get your employer match.
– topshot
7 hours ago
|
show 4 more comments
2
Probably no harm in asking, but I wouldn't count on it. But perhaps you should investigate how 401(k)s work before leaving free money on the table
– Kevin
7 hours ago
I feel even a match of 5% of my salary is not enough to justify locking up my money until my near-dead years. Also, the lack of investment opportunities 401k offers, i feel i can invest my money personally, and grow my savings higher than if i had left it in a 401k, even considering the match.
– TrevorKS
7 hours ago
8
@TrevorKS Really - you can beat a 100% return on your own?
– D Stanley
7 hours ago
6
The money doesn't have to stay there until you're near-dead. As soon as you leave the employer, you can roll the money into an IRA, and invest it in whatever you want.
– stannius
7 hours ago
2
You should seriously learn about 401 plans. Even if yours doesn't offer great investment options there is a reason common wisdom is to max out your contribution or at the very least make sure you get your employer match.
– topshot
7 hours ago
2
2
Probably no harm in asking, but I wouldn't count on it. But perhaps you should investigate how 401(k)s work before leaving free money on the table
– Kevin
7 hours ago
Probably no harm in asking, but I wouldn't count on it. But perhaps you should investigate how 401(k)s work before leaving free money on the table
– Kevin
7 hours ago
I feel even a match of 5% of my salary is not enough to justify locking up my money until my near-dead years. Also, the lack of investment opportunities 401k offers, i feel i can invest my money personally, and grow my savings higher than if i had left it in a 401k, even considering the match.
– TrevorKS
7 hours ago
I feel even a match of 5% of my salary is not enough to justify locking up my money until my near-dead years. Also, the lack of investment opportunities 401k offers, i feel i can invest my money personally, and grow my savings higher than if i had left it in a 401k, even considering the match.
– TrevorKS
7 hours ago
8
8
@TrevorKS Really - you can beat a 100% return on your own?
– D Stanley
7 hours ago
@TrevorKS Really - you can beat a 100% return on your own?
– D Stanley
7 hours ago
6
6
The money doesn't have to stay there until you're near-dead. As soon as you leave the employer, you can roll the money into an IRA, and invest it in whatever you want.
– stannius
7 hours ago
The money doesn't have to stay there until you're near-dead. As soon as you leave the employer, you can roll the money into an IRA, and invest it in whatever you want.
– stannius
7 hours ago
2
2
You should seriously learn about 401 plans. Even if yours doesn't offer great investment options there is a reason common wisdom is to max out your contribution or at the very least make sure you get your employer match.
– topshot
7 hours ago
You should seriously learn about 401 plans. Even if yours doesn't offer great investment options there is a reason common wisdom is to max out your contribution or at the very least make sure you get your employer match.
– topshot
7 hours ago
|
show 4 more comments
1 Answer
1
active
oldest
votes
The company is paying the match - it is not subsidized by the government. However, there may be other differences that don't make it a 1:1 swap with cash:
- 401(k) contributions and matches are tax-deferred, so switching to salary would increase tax costs for them.
- 401(k) matches are often vested on a schedule, meaning you might only be entitled to 25% after each year you are employed with them. So a swap to salary would cost them more unless you stayed employed with them until you're fully vested.
- There are IRS regulations that require a certain number of employees to participate in the 401(k) to ensure that the benefit is not geared too heavily towards "highly-compensated employees". If cash were an option, it's reasonable that more non-highly-compensated employees would take that option, tipping the scales in the wrong direction.
So yes, you can ask, but I would not hold my breath. I would instead be thankful for the "free" retirement funds and work harder to become more valuable so that you earn a higher salary (and more retirement benefits) in the future.
I feel I can invest my money personally, and grow my savings higher than if I had left it in a 401(k), even considering the match.
Keep in mind that a 401(k) match is essentially a 100% return on your retirement savings. If you contribute $100, your 401(k) will instantly have $200 (once fully vested as mentioned above). I don't know what you're investing in that can beat that.
answered 7 hours ago
D StanleyD Stanley
53.2k8156163
you could add a note per my comment above: as soon as you leave the employer you can roll the money into an IRA (self-directed even) and then invest it in whatever you want.
– stannius
7 hours ago
1
If what Stannius mentions is true, it would be a much more convincing idea for me then to contribute. I guess i'm being young and stubborn, i don't like the idea of not having direct access to my investments, even if there is a intensive.
– TrevorKS
7 hours ago
This answer did answer my question, Thank you!
– TrevorKS
7 hours ago
@TrevorKS What stannius mentions is true and quite common.
– D Stanley
7 hours ago
2
@trevorks you still have access to the funds, there's just a tax penalty if you withdraw them early.
– Kat
4 hours ago
|
show 4 more comments
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The company is paying the match - it is not subsidized by the government. However, there may be other differences that don't make it a 1:1 swap with cash:
- 401(k) contributions and matches are tax-deferred, so switching to salary would increase tax costs for them.
- 401(k) matches are often vested on a schedule, meaning you might only be entitled to 25% after each year you are employed with them. So a swap to salary would cost them more unless you stayed employed with them until you're fully vested.
- There are IRS regulations that require a certain number of employees to participate in the 401(k) to ensure that the benefit is not geared too heavily towards "highly-compensated employees". If cash were an option, it's reasonable that more non-highly-compensated employees would take that option, tipping the scales in the wrong direction.
So yes, you can ask, but I would not hold my breath. I would instead be thankful for the "free" retirement funds and work harder to become more valuable so that you earn a higher salary (and more retirement benefits) in the future.
I feel I can invest my money personally, and grow my savings higher than if I had left it in a 401(k), even considering the match.
Keep in mind that a 401(k) match is essentially a 100% return on your retirement savings. If you contribute $100, your 401(k) will instantly have $200 (once fully vested as mentioned above). I don't know what you're investing in that can beat that.
answered 7 hours ago
D StanleyD Stanley
53.2k8156163
you could add a note per my comment above: as soon as you leave the employer you can roll the money into an IRA (self-directed even) and then invest it in whatever you want.
– stannius
7 hours ago
1
If what Stannius mentions is true, it would be a much more convincing idea for me then to contribute. I guess i'm being young and stubborn, i don't like the idea of not having direct access to my investments, even if there is a intensive.
– TrevorKS
7 hours ago
This answer did answer my question, Thank you!
– TrevorKS
7 hours ago
@TrevorKS What stannius mentions is true and quite common.
– D Stanley
7 hours ago
2
@trevorks you still have access to the funds, there's just a tax penalty if you withdraw them early.
– Kat
4 hours ago
|
show 4 more comments
The company is paying the match - it is not subsidized by the government. However, there may be other differences that don't make it a 1:1 swap with cash:
- 401(k) contributions and matches are tax-deferred, so switching to salary would increase tax costs for them.
- 401(k) matches are often vested on a schedule, meaning you might only be entitled to 25% after each year you are employed with them. So a swap to salary would cost them more unless you stayed employed with them until you're fully vested.
- There are IRS regulations that require a certain number of employees to participate in the 401(k) to ensure that the benefit is not geared too heavily towards "highly-compensated employees". If cash were an option, it's reasonable that more non-highly-compensated employees would take that option, tipping the scales in the wrong direction.
So yes, you can ask, but I would not hold my breath. I would instead be thankful for the "free" retirement funds and work harder to become more valuable so that you earn a higher salary (and more retirement benefits) in the future.
I feel I can invest my money personally, and grow my savings higher than if I had left it in a 401(k), even considering the match.
Keep in mind that a 401(k) match is essentially a 100% return on your retirement savings. If you contribute $100, your 401(k) will instantly have $200 (once fully vested as mentioned above). I don't know what you're investing in that can beat that.
answered 7 hours ago
D StanleyD Stanley
53.2k8156163
you could add a note per my comment above: as soon as you leave the employer you can roll the money into an IRA (self-directed even) and then invest it in whatever you want.
– stannius
7 hours ago
1
If what Stannius mentions is true, it would be a much more convincing idea for me then to contribute. I guess i'm being young and stubborn, i don't like the idea of not having direct access to my investments, even if there is a intensive.
– TrevorKS
7 hours ago
This answer did answer my question, Thank you!
– TrevorKS
7 hours ago
@TrevorKS What stannius mentions is true and quite common.
– D Stanley
7 hours ago
2
@trevorks you still have access to the funds, there's just a tax penalty if you withdraw them early.
– Kat
4 hours ago
|
show 4 more comments
The company is paying the match - it is not subsidized by the government. However, there may be other differences that don't make it a 1:1 swap with cash:
- 401(k) contributions and matches are tax-deferred, so switching to salary would increase tax costs for them.
- 401(k) matches are often vested on a schedule, meaning you might only be entitled to 25% after each year you are employed with them. So a swap to salary would cost them more unless you stayed employed with them until you're fully vested.
- There are IRS regulations that require a certain number of employees to participate in the 401(k) to ensure that the benefit is not geared too heavily towards "highly-compensated employees". If cash were an option, it's reasonable that more non-highly-compensated employees would take that option, tipping the scales in the wrong direction.
So yes, you can ask, but I would not hold my breath. I would instead be thankful for the "free" retirement funds and work harder to become more valuable so that you earn a higher salary (and more retirement benefits) in the future.
I feel I can invest my money personally, and grow my savings higher than if I had left it in a 401(k), even considering the match.
Keep in mind that a 401(k) match is essentially a 100% return on your retirement savings. If you contribute $100, your 401(k) will instantly have $200 (once fully vested as mentioned above). I don't know what you're investing in that can beat that.
answered 7 hours ago
D StanleyD Stanley
53.2k8156163
The company is paying the match - it is not subsidized by the government. However, there may be other differences that don't make it a 1:1 swap with cash:
- 401(k) contributions and matches are tax-deferred, so switching to salary would increase tax costs for them.
- 401(k) matches are often vested on a schedule, meaning you might only be entitled to 25% after each year you are employed with them. So a swap to salary would cost them more unless you stayed employed with them until you're fully vested.
- There are IRS regulations that require a certain number of employees to participate in the 401(k) to ensure that the benefit is not geared too heavily towards "highly-compensated employees". If cash were an option, it's reasonable that more non-highly-compensated employees would take that option, tipping the scales in the wrong direction.
So yes, you can ask, but I would not hold my breath. I would instead be thankful for the "free" retirement funds and work harder to become more valuable so that you earn a higher salary (and more retirement benefits) in the future.
I feel I can invest my money personally, and grow my savings higher than if I had left it in a 401(k), even considering the match.
Keep in mind that a 401(k) match is essentially a 100% return on your retirement savings. If you contribute $100, your 401(k) will instantly have $200 (once fully vested as mentioned above). I don't know what you're investing in that can beat that.
answered 7 hours ago
D StanleyD Stanley
53.2k8156163
edited 7 hours ago
answered 7 hours ago
D StanleyD Stanley
53.2k8156163
answered 7 hours ago
D StanleyD Stanley
53.2k8156163
answered 7 hours ago
D StanleyD Stanley
53.2k8156163
53.2k8156163
you could add a note per my comment above: as soon as you leave the employer you can roll the money into an IRA (self-directed even) and then invest it in whatever you want.
– stannius
7 hours ago
1
If what Stannius mentions is true, it would be a much more convincing idea for me then to contribute. I guess i'm being young and stubborn, i don't like the idea of not having direct access to my investments, even if there is a intensive.
– TrevorKS
7 hours ago
This answer did answer my question, Thank you!
– TrevorKS
7 hours ago
@TrevorKS What stannius mentions is true and quite common.
– D Stanley
7 hours ago
2
@trevorks you still have access to the funds, there's just a tax penalty if you withdraw them early.
– Kat
4 hours ago
|
show 4 more comments
you could add a note per my comment above: as soon as you leave the employer you can roll the money into an IRA (self-directed even) and then invest it in whatever you want.
– stannius
7 hours ago
1
If what Stannius mentions is true, it would be a much more convincing idea for me then to contribute. I guess i'm being young and stubborn, i don't like the idea of not having direct access to my investments, even if there is a intensive.
– TrevorKS
7 hours ago
This answer did answer my question, Thank you!
– TrevorKS
7 hours ago
@TrevorKS What stannius mentions is true and quite common.
– D Stanley
7 hours ago
2
@trevorks you still have access to the funds, there's just a tax penalty if you withdraw them early.
– Kat
4 hours ago
you could add a note per my comment above: as soon as you leave the employer you can roll the money into an IRA (self-directed even) and then invest it in whatever you want.
– stannius
7 hours ago
you could add a note per my comment above: as soon as you leave the employer you can roll the money into an IRA (self-directed even) and then invest it in whatever you want.
– stannius
7 hours ago
1
1
If what Stannius mentions is true, it would be a much more convincing idea for me then to contribute. I guess i'm being young and stubborn, i don't like the idea of not having direct access to my investments, even if there is a intensive.
– TrevorKS
7 hours ago
If what Stannius mentions is true, it would be a much more convincing idea for me then to contribute. I guess i'm being young and stubborn, i don't like the idea of not having direct access to my investments, even if there is a intensive.
– TrevorKS
7 hours ago
This answer did answer my question, Thank you!
– TrevorKS
7 hours ago
This answer did answer my question, Thank you!
– TrevorKS
7 hours ago
@TrevorKS What stannius mentions is true and quite common.
– D Stanley
7 hours ago
@TrevorKS What stannius mentions is true and quite common.
– D Stanley
7 hours ago
2
2
@trevorks you still have access to the funds, there's just a tax penalty if you withdraw them early.
– Kat
4 hours ago
@trevorks you still have access to the funds, there's just a tax penalty if you withdraw them early.
– Kat
4 hours ago
|
show 4 more comments
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2
Probably no harm in asking, but I wouldn't count on it. But perhaps you should investigate how 401(k)s work before leaving free money on the table
– Kevin
7 hours ago
I feel even a match of 5% of my salary is not enough to justify locking up my money until my near-dead years. Also, the lack of investment opportunities 401k offers, i feel i can invest my money personally, and grow my savings higher than if i had left it in a 401k, even considering the match.
– TrevorKS
7 hours ago
8
@TrevorKS Really - you can beat a 100% return on your own?
– D Stanley
7 hours ago
6
The money doesn't have to stay there until you're near-dead. As soon as you leave the employer, you can roll the money into an IRA, and invest it in whatever you want.
– stannius
7 hours ago
2
You should seriously learn about 401 plans. Even if yours doesn't offer great investment options there is a reason common wisdom is to max out your contribution or at the very least make sure you get your employer match.
– topshot
7 hours ago