The company that I work for doesn't have the best benefits with one of those being that they don't match any level of 401k contribution.

Looking for advice on what the best thing to do is if putting money into my 401k is useless without them matching.

Any advice is appreciated.

you're right, definitely not useless -- I guess I'm just wondering with that being the case if there is a better route for me to go

I'm at a small startup without match still max it every year cus I'd rather put 23K into it than try to find something better to do with closer to like 15K, though also max Roth and a few K per month into taxable, would be all over Megabackdoor if was capable

If I was in OPs situation I would max out HSA (and invest it, not use it) and Roth IRA before putting money into the 401k. Most advisors recommend saving 15-25% of your income for retirement so once you get into the 6 figures of household income you will still need to save more after maxing those tax advantaged accounts out and that's when the 401k would come into play. Also once your income gets into those ranges it might make sense to take the tax deferral that the 401k would allow for.

Put in a smaller percentage like 4-5% in your 401k and then invest everything else in a taxable brokerage account.

Remember… 401K investing is tax deductible. If you itemize.

knoxtom said:

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There is no way I would ever lock up my money into a 401k without a match.

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I agree with this. I don't put money in a 401k because no match.

Might be worth it with no matching if you live in a state with high state income taxes though.

Brian Earl Spilner said:

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I would just max all retirement accounts regardless of a match.

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This is bad universal advice. It really depends on your goals and needs.

You can put too much in tax advanced accounts and end up worse off.

EliteZags said:

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I Am A Critic said:

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knoxtom said:

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There is no way I would ever lock up my money into a 401k without a match.

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Why?

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hear this commonly from people that are not aware of the Roth Conversion Ladder

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Or SEPP / 72(t). Lots of ignorance in hurr today.

Max a personal roth, then max HSA if eligible, then contribute to 401k last

RangerRick9211 said:

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Fredd said:

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Remember… 401K investing is tax deductible. If you itemize.

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Ugh. Huh. Hmm. Ok.

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yep you can deduct 100% of all the taxes you pay on your 401K contributions from your taxes

Here's the issue I have with un-matched 401k... At least in my case. Smaller company so in addition to not having a match the plan as a whole wasn't very good. The fund selection wasn't the greatest and the fees were high.

I put a little in just so management would see I was participating. Figured participation was important or they might get rid of it vs improve it. A couple years later we went through an acquisition and a match followed. Plan is a little better, but not much.

Taxable brokerage account is far out performing the 401k

bmks270 said:

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Brian Earl Spilner said:

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I would just max all retirement accounts regardless of a match.

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This is bad universal advice. It really depends on your goals and needs.

You can put too much in tax advanced accounts and end up worse off.

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Well I guess that's true, if your goal is to have less money the older you get.

double aught said:

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Fredd said:

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Remember… 401K investing is tax deductible. If you itemize.

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Isn't it a pretax deduction?

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Sorry I misspoke. Duh

Only a few people knows pretty well about 401k and the pretax deduction thingy, come let me lecture you

vaqueroag said:

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The company that I work for doesn't have the best benefits with one of those being that they don't match any level of 401k contribution.

Looking for advice on what the best thing to do is if putting money into my 401k is useless without them matching.

Any advice is appreciated.

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Buy real estate. Start in single family, generate additional cash flow, and grow from there.

Plenty of places to learn how to do it.

vaqueroag said:

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The company that I work for doesn't have the best benefits with one of those being that they don't match any level of 401k contribution.

Looking for advice on what the best thing to do is if putting money into my 401k is useless without them matching.

Any advice is appreciated.

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It is not useless. My company does not match for 1 year. I just joined last week. Same story for my wife's company and she's competed 6 months.

What it is good for is to shield up to $23500 a year from taxes. So you save on taxes overall. You can invest the $23.5k in funds your plan allows. I put all money in an index fund, I don't split them up. I change funds every month if needed.

The other thing I do is since they don't match. I want my money in the market asap so I put my 401k allocation to the max (75%) of my paycheck. It takes out a lot and I will hit the 23.5k within a few paychecks. Then it goes to zero money taken out. Money will be in the market the most time to grow. This makes sense only if you have no match so distributing it across the year does not make sense. I have enough saved up and don't live paycheck to paycheck so I can make this possible.

Brian Earl Spilner said:

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I would just max all retirement accounts regardless of a match.

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That is what I do. A good tax shield for some part of my paycheck. Then when I switch jobs, I move the money to an IRA which I invest aggressively.

JSKolache said:

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Max a personal roth, then max HSA if eligible, then contribute to 401k last

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I think I remember reading that after a certain income level, you become ineligible for a Roth?

AI is all the rage and it is power hungry. Put your money in energy; preferably in something that spreads across uranium. Something has to power all of these AI data centers that spring up. Wind and solar aren't going to cut it.

Just my $.02

TTUArmy said:

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AI is all the rage and it is power hungry. Put your money in energy; preferably in something that spreads across uranium. Something has to power all of these AI data centers that spring up. Wind and solar aren't going to cut it.

Just my $.02

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Yep, you have multiple states and municipalities forecasting production needs they can't currently meet after factoring all of the planned energy demand from data centers. Green energy is a farce and only worthwhile as a supplementary production.

The latter doesn't necessarily impact my decisions on certain stocks because you can make some money on the speculation and political emphasis on some of this farcical crap, but nonetheless bets on real energy are probably pretty sound.

infinity ag said:

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The other thing I do is since they don't match. I want my money in the market asap so I put my 401k allocation to the max (75%) of my paycheck. It takes out a lot and I will hit the 23.5k within a few paychecks. Then it goes to zero money taken out. Money will be in the market the most time to grow. This makes sense only if you have no match so distributing it across the year does not make sense. I have enough saved up and don't live paycheck to paycheck so I can make this possible.

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obvs depends on personal philosophy/comfort level, and I know the numbers that support earlier better in the long run, but volatile years ie 2020 (& 22) DCA'ing across the year would def be beneficial

I don't prefer auto investing from taxable income, so since my 401K is easier to DCA and I max backdoor roth early in the year, like to throw most of my taxable on market and stock dips

RangerRick9211 said:

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Ragoo said:

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bmks270 said:

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Brian Earl Spilner said:

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I would just max all retirement accounts regardless of a match.

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This is bad universal advice. It really depends on your goals and needs.

You can put too much in tax advanced accounts and end up worse off.

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don't ever discount compounding. You max everything from the start you can reduce and pivot later because you will have ridiculous compounding advantage.

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The math will never support not doing so because it's literally more money invested and compounding over time. You're taking taxes owed, pocketing them, compounding them, then paying the tax-man down the road and keeping the difference.

Sure, RMDs are a thing, but you can plan for that. There is no barrier to accessing IRA or 401(k) early via Roth conversion or SEPP.

To demonstrate, same income, same expenses and same income tax (though likely to be lower in retirement) assumptions:

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You're assuming here that the tax savings are being invested over the same time frame as the 401k. If you spend your tax savings every year on a cruise then it doesn't work.

One of the reasons why I like Roth.