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Someone once told me that if you invest $2000 in an IRA every year for ten years from the time you are eighteen to the time you are twenty eight and then stop, you will have $1,000,000 by the time you are sixty five. That is why I wish I invested when I was one. The reason I want to participate in a 401k when I am under 40 is so that I don't have to save as much when I am over 40. It is by the magic of compound interest. Also there is the chance that my employer will give me some money (for me it is three percent of my pay if I put in six percent). I also don't like giving Uncle Sam any more than I have to and if I can legally avoid paying taxes, I'm all for it. The next time you are considering a 401k plan, please look at the investment options. Some are riskier than others. Even if you are young, if you don't expect to be invested in the fund for more than a few years, you might want to consider choosing a more conservative alternative. When you have more than $5,000 in an account no one can hound you to take out the money. Finally, is there anything you can learn from this? If so, it might be the most well spent $1,000 of your life. If you are under 40, your retirement alternatives are not going to be that great. They keep increasing the social security retirement age and talk about cutting back the benefit. Good luck.
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