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401k contribution during the internship

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travisz
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401k contribution during the internship [#permalink] New post   01 Jun 2014, 16:55
I am starting my internship tomorrow and wondering if I could/should contribute to 401k during internship.

I've always maxed out all the tax sheltered investment opportunities available to me.


I will ask the hr if I could contribute tomorrow. If I do, I am wondering I should contribute. Is there any downside of doing this. Has anyone done it before?

I have cash set aside for tuition and emergency fund.

thanks
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mgg234
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Re: 401k contribution during the internship [#permalink] New post   02 Jun 2014, 07:59
I envy how good of financial state you are in haha, paying tuition in cash, emergency fund, and have maxed out IRA's and all that...

To answer your question, it depends on your employer - but you certainly won't get employee-matching.
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IntergalacticSpace
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Re: 401k contribution during the internship [#permalink] New post   02 Jun 2014, 10:21
The downside of contributing this year is that the tax "shield" is not going to be much because your tax bracket is going to be so low (0-10%). I am assuming your only earned income for 2014 is going to be your summer internship. If that's truly the case, your benefit will be minimal and your money will be locked up in a retirement account for a long time. If you aren't getting a company match, I would forget about contributing.
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brandon432
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Re: 401k contribution during the internship [#permalink] New post   02 Jun 2014, 15:59
If I was interning this summer and was in the 15% marginal tax bracket, I would max out my Roth first, seeing as this is the last year I'll be eligible for an IRA and the lowest tax bracket I'll be in for a long time.
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travisz
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Re: 401k contribution during the internship [#permalink] New post   02 Jun 2014, 16:19
thanks guys.

my wife is working so we will be in 28% bracket.

I started the internship today and HR says I am not eligible for 401k.

oh, well...

Will max out Roth like I always do
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brandon432
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Re: 401k contribution during the internship [#permalink] New post   02 Jun 2014, 17:43
travisz wrote:

my wife is working so we will be in 28% bracket.

I started the internship today and HR says I am not eligible for 401k.


28% bracket definitely changes the math. In general, 401k is only available to full-time employees. I know one of the MBB firms makes the 401k available and provides healthcare for interns.
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Re: 401k contribution during the internship [#permalink]
02 Jun 2014, 17:43

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