Talk to me about 401ks.... About This Page:

[graygables]

I know nothing about a 401K, what it is, what it does for me. I'm eligible for Disney's and am strongly considering it. Advice? I'm extremely nervous and not excited about putting money in an uninsured situation, if that helps...

[CinderAbby]

401k are great only if the employer matches contributions IMO. Some people like them because they do lower your taxable income, but you get taxed on the money later when you start taking it. The luck I've had with them hasn't been good so whatever my contribution would be through work (if I participated), I try to put that aside in some sort of savings account or CD that I don't get penalized or taxed on when I take the money (meaning it's mine free and clear from day one).

[mom2twingirlies]

I believe that there are similar in nature to our RRSP (Registered Retirement Saving Plans). You put money away now, which you can deduct off of your taxable income, and save taxes now. You save them for retirement when you income is likely to be lower and you are taxed when you take them out, which means your taxes are overall lower.
If they are not like RRSP's, someone else please correct me.

[mom2twingirlies]

Sorry, for some reason that posted before I finished.

The idea of them is:
1. savings for retirement
2. tax savings

[wheatenwalker]

Whats their match and when are you vested?

[CinderAbby]

[QUOTEwhen you income is likely to be lower and you are taxed when you take them out, which means your taxes are overall lower.
][/QUOTE]

I think here in MA this kind of income is taxed at 12% versus the regular rate of 5ish. Federal taxes it might be the same though.

[tkm1005]

I would wait until they offer you the full time gig after the internship to start using the 401k.

Otherwise if you put money in there you will need to either roll it to another employers plan if you don't get the full time position or it will be sitting somewhere and if you take it out you will be taxed quite highly on the money.

However once you are full time I would highly recommend it. Its a great way to save money for retirement and matching contributions are great. I would also enroll in the employee stock purchase plan too.

[jimmymac]

It can be a great plan depending on what percentage they match

[mom23k9s]

401k plans are different from employer to employer, so you might want to talk to Disney's 401k administrator. Our company uses Fidelity Investments but Disney may use someone else. If you really don't know anything about 401k's, they'd be the people to ask.

[Cheriemek]

Who cares what the match is - have you put ANY money away for retirement???? If not, you better start.