Anybody that has ever had any kind of hustle understands what it means to flip your money. One of the easiest flips available is for those that work a job that offers a 401k. Unfortunately, I’ve heard the most excuses of why people don’t take advantage of their 401k.
- I can’t afford it.
- I don’t know how it works.
- I don’t know if my job offers it.
Excuse: I Can’t Afford It
This is an excuse and not even close to a valid reason. Let’s assume that your job offers a 5% match. That means that they will match everything you contribute up to 5% of your paycheck. This chart will show you what your money would look like if you invested just 5% of your paycheck into your 401k, assuming an average stock market gain of 7% after one year.
|Paycheck||You Invest||Job Invests||Total||Profit
Even without the 7% gain of the stock market, the 401k is one of the very few LEGAL opportunities that is 100% guaranteed to double your money. It’s your company’s way of giving you an incentive to save for retirement.
Excuse: I Don’t Know How It Works
Your company has an entire packet or section of their website dedicated to explaining how a 401k works if they offer it. Outside of that, we use Google and YouTube for everything else we CHOOSE to look for, so this is not a valid excuse at all in 2019.
Excuse: I Don’t Know If My Job Offers It
This is the least valid of all excuses because anyone can simply ask their supervisor if the company offers a 401k.
A 401k Is A Retirement Account
It’s important to understand that a 401k is a retirement account, which means that if you pull your money out early, you will have to pay a penalty. This penalty may vary from state to state, so make sure you ask whoever is in charge of your account BEFORE you attempt to withdraw your money.
Borrowing From Your 401k
If you can prove financial hardship, in many cases it is possible to borrow money from your 401k. It has to be paid back, but you’ll have access to emergency funds if you need them. Make sure you understand how long it will take to get access to these funds, as it may vary from program to program.