Should I save more in my 401k instead of a savings/Ira?
I heard of a lot people losing money in their 401ks during the last recession in 2008. This made me uncertain on 401ks and I've been more cautious because of it.
- Anonymous1 month ago
- StephenWeinsteinLv 71 month ago
With most 401Ks, you can choose whether you want the money in a stock fund, which means you can lose a lot in a recession, or in a stable value fund (or something like that; there are various names), which doesn't grow nearly as fast, but is unlikely to lose value in a recession.
- Casey YLv 71 month ago
There really isnt a ton of difference to be honest, its all about where those investments happen to be. You can choose risky options or safe options.
Personally, I like Roth IRAs...look them up...
- JudyLv 71 month ago
Almost all 401k's have several investment options ranging from very safe to fairly risky. Also, if those people had money in the stock market, and left it there, they have likely WAY more than made their money back by now.
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- Anonymous1 month ago
All 401Ks offer very, very, very low risk funds if you are afraid of the stock market. They don't make much but it's almost impossible to lose. On the other end, they all also offer moderate up to higher risk funds. You can move your funds around any time you want. If your company does any matching, contribute at least what they will match because that is free money.
IRA's are generally stock market based so it's basically the same as a 401K. You can choose low, moderate or high risk funds. You are allowed to have both.
The highest rate I've found for a savings account is AMEX, it's not bad but right now all savings accounts are paying pennies. Good to have emergency, vacation, extra money stashed away.
- A HunchLv 71 month ago
What's the difference between your 401K vs your IRA?
- they might be different fund companies with different options available... but all in all they are pretty identical.
If 401Ks decrease across the board, so are IRAs.
And savings accounts are just there for "safe" money.
- cmac'mLv 51 month ago
Many companies will match your contributions to your 401k up to a certain point- you always want to max that out. After you max out the contributions then it's really up to you. But most investments are tied to stock market indexes.
Interest rates are very low- savings accounts are practically worthless except to keep emergency expenses for a couple of months.
Everyone should probably have an IRA and multiple investment vehicles for retirement.
You want your money working for you, you want to be invested in this current market. Markets always trend upwards over time. As you approach retirement then maybe consider less risk and more conservative investments because you don't want to take sudden losses as you stop contributing and instead start using that money.
- ALv 71 month ago
I had some losses in my 401K in 2008 and again in 2018. but I still contributed and more than made up for the losses. Remember this, if you are contributing 500 per month and the stockmarket is high- lets say ABC stock is trading at $1000 per share, you can buy half a share each month, then lets say the stock market falls and ABC shares are now trading at $500 per share, now when you make your contribution you are buying 1 whole share per month, just keep contributing looking at the long term picture. As you get older and closer to retirment age, you normally start moving money into more stable things.