With the recent news about the corporation discontinuing the match starting Oct 1, I have considered reducing my contribution to 0% to invest elsewhere and have more access if I need the funds in the immediate future. It says we would have to wait “at least 6 months” if we decide to recontribute... does anyone know the details on this policy?
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Login to your VOYA account and look for the "summary plan description" it will give you a more detailed accounting of how the plan works. Strictly as a savings vehicle the 401k is still very good even without the match. You can do a Roth IRA (might have to do a backdoor contribution depending on your magi). However, doing that in addition to the 401k is probably optimal, but if you need more access to the money you might consider a more liquid, non tax advantaged account. It really all depends on your personal financial plan and current situation.
401k is a scam.
The reason to keep going is to max the Contribution at 19.5k for tax reasons. That 19.5k isn’t taxed as long as you are not contributing to the Roth portion of the 401k the amount you add comes right off the top. So if you make 150k your taxable income is lowered to 130500.
Also there are no income limits for traditional IRA’s only tax deductible ones. Which if you work properly can use the iRA loophole and contribute to a traditional IRA and the next day convert it to a Roth. This works well if you have a low balance/zero balance in a traditional IRA as there are tax implications if you convert earning or accounts that you may have taken a tax deduction on.
https://www.fidelity.com/retirement-ira/ira-rules-faq
https://www.nerdwallet.com/blog/investing/backdoor-roth-ira-high-income-how-to-guide/
If you think you may lose your job in 2021, focus on getting six to a year of living expenses saved in a taxable account (there are penalties with early withdrawal of IRA or Roth). Stopping your contribution to Savings may be a very wise move for low performers who survive PIP this year, but may be exposed to job loss next year. Start cutting your living expenses now to get to 6 months of living expenses saved. From facebook accounts i see, you guys spend an a lot on travel, restaurants, gyms, designer handbags and fancy cars
Most of you make too much to contribute to IRA or Roth outside the XOM savings plan. If you invest it will be in a taxable account.
Agree with poster above. Do contribute at least 6% in a tax-deferred account, sound planning. You can contribute to an IRA, but keep in mind that 1- the max tax-deferred contribution for IRA is $6k vs. $19.5 k for 401k with current employer, and 2- if you are 55 or older, you get penalty-free access to the 401k with current employer, vs 10% penalty for IRA. All these federal laws, nothing to do with Exxon
Your contribution to the retirement is for tax benefits and for sound finances when you retire. It is usually not wise to remove your contribution unless you cannot feed your family without removing it. Just saying
Reactivating is disabled for 6 months. After that you can start contributions again. I’ve heard of people transitioning to Ernst and Young. It’s your money so if there isn’t a match to keep you in place, check what else is out there and invest.