I say absolutely do it! Is it a regular 401K, or a ROTH 401K? Does the employer provide any sort of matching?
At most, you'll put 5% of your income into the 401K. Short term, it won't seem like much. But that money will grow long term to be a substantial amount. Reasonably, you can expect that money to double about every 8 years. So, the sooner you let it start, the more you'll have when you reach retirement. You start it here, and just roll it over to your 401K account from your next job.
Any growth you have on it will not be taxed. You'll be taxed at ordinary income rates when you start taking that money out after age 59 1/2. But a 401K is a great way to start your retirement planning.
If you decide not to, another great option at your age is to open a ROTH IRA. You can put up to $4500 a year into it for retirement.
Does the business you work for have any kind of matching program? With a matching program, they take some percentage of what you put into your 401K - and they match it. Where I currently work, if you put 4% of your paycheck in your 401K, they add an additional 1% on their dime. That's free money.
If you work doesn't have any matching program, then I wouldn't feel compelled to start saving in a 401k. If you wanted to start putting something away for retirement, maybe start a Roth IRA, which has some extra tax benefits different from a 401K, but also has a cap; you can't add more than $5,500 a year. When you put money in a Roth Ira, you cant take it out until you are 59.5 years old - unless you want to get taxed pretty heavily on it. The benefits of a Roth, is that you invest the money you have in the IRA, and when you do reach 59.5, you have access to it completely tax free.
Personally, I really wouldn't, but take my advice with a grain of salt. You're making $210 a week. You could just put that in a regular bank account or buy US Savings Bonds, if you honestly don't need to spend it. I think the savings bonds have some kind of a college savings thing (can't remember the details, go to the website for more information).
The bad thing about a 401k is, if you pick a bad investment (which is very easy to do), you actually do lose your money, with no guarantee that you will get it back. Regular savings are very pokey and boring, but at least you don't lose your money,even if you don't gain much.
Plus, with a 401k, you're pretty well locked in. If you take your money out before the time, you pay penalties. I think you can borrow from them, but that's kind of self defeating.
Does your employer offer matching funds? If yes, definitely do it.
The bottom line is that you can't afford NOT to contribute to a retirement plan, even if it's only a little bit at the start.
If the plan has a Roth option, do that.
ETA: I've been an employer for 22 years and I can't tell you how many employees have said, "I can't afford it until I graduate." And then it's "I can't afford it until I buy a car." Then it's, "I can't afford it until after the wedding." And then it's "I can't afford it until after we buy a house." Then it's, 'I can't afford it until the kids are out of daycare." And before you know it, these folks are 40 with zero retirement. You are going to need about 5 mil to retire with a basic middle class lifestyle. It's so much easier if you start as young as possible and just get used to retirement planning being a bill you will pay every single paycheck from now until you retire.
I honestly think t is a good idea to start...so you get a grip on your money and budget...
think about it you more than likely live at home and do what you want with your check..saving some of that money weekly and managing it s important now
in the future when you want to buy some cloths or go to the mall ask yourself do you really need it....do you really need to coffee or jumba juice...
if you do not do the 401 k then open a savings and save a 1/3 of your check weekly..this will help whn you go away to college
good luck
personally I would not do it at this time. the interest rates are too low and the market stock levels are too high. besides the 401k trustee may force you to take the money and you wouldn't have the 401k anyway (they do this if you leave your job and have less than $5,000 or so in the 401k, for example)
but feel free to set aside a rainy day fund for security and do go full ahead with the 401k in a year or two with the regular job
that might depend on your tax situation right now, if you enlist in the 401(K) it will reduce your taxable income at this time, and maybe you don't actually need to take advantage of that provision if you don't really have any tax liability(2015 for a single person is $10250 non taxable)
if this job appears to be one that you will stay in for any number of years, yes then building up this 401(K) is probably a wise choice
bear in mind if you leave this company you might be required to take distribution which will be taxable to you and this might not be a good thing at the time
however you can always roll it over to an IRA(within 60 days) and not be taxed on until you might some day down the line take distributions from the IRA
the IRA does have some exemptions that apply to avoid the early distribtution penalty that will apply to the 401(K)
are you even eligible to join the 401k as a part-timer? if yes - just start with 2% - the company will probably add a match of 1% to that, so you will already make 50% on your investment
I say it is better to use current money to pay current bills at this time. Why earn a few percent on your money while paying 18% on credit cards. You will have time enough in the future to set aside retirement money. Do not let people scare you with math gymnastics re: how much you need to retire. Having a paid for house and social security will cut that amount down to size.
Yes. Do it.
Especially do it if your employer has any sort of matching plan.
That's my advice.
