Assuming it’s a 1:1 match and is immediately vested they would technically still gain more money by contributing, immediately withdrawing all of it, and paying the associated taxes and fees.
So it’s definitely possible they’re leaving money on the table either way.
Assuming it’s a 1:1 match and is immediately vested they would technically still gain more money by contributing, immediately withdrawing all of it, and paying the associated taxes and fees.
So it’s definitely possible they’re leaving money on the table either way.
Interesting, didn’t know of that possibility. Is it also possible to withdraw just a part and save some “for free”?
I’m not from the US so the exact workings of your pension system is a bit beyond my expertise 😊
No.
– employer matches typically have a vesting period where it’s not yours to withdraw
— actual withdrawal means paying the taxes you skipped plus a penalty
– loans can be useful, but you have to pay yourself back and meanwhile that money is not invested.
– loans have a low interest rate, so your loan to yourself is making almost nothing compared to if it was left in an investment
– loans need to be payed back immediately if you leave the company for any reason, otherwise it’s an early withdrawal with all those taxes and fees