Contributing to a temporary employer's 401(k) with respect to vesting periods
I am 23 and just graduated from college. My current employer will let me start contributing to its 401(k) in September or October. It matches 50 cents to each $1 contributed up to 6% of my income. However, the vesting percentage for less than 2 years of work for the company is 0%, and I only plan on staying with the company for a year at least and maybe 2 years if I get a return offer. The vesting percentage for 2 years is 20%.
For reference, they are paying me $40k (pre-tax) by late June 2018, which includes a severance package of sorts. I am still a dependent of my parents, and they support me financially. I have around $18k in holdings (counting savings and checking accounts as well as my place's hefty security deposit) and plan on contributing $800 to a BarClays Dream account every month. I have no outstanding debts and budget such that I spend less of my own money than I make. I also have $5.5k invested in Roth IRA this year split between FFNOX and a target date fund.
The investment options as of 3 years ago follow divided up into index funds and other funds.
Index funds: Fidelity U.S. Bond Index Fund Premium Class (FSITX) Fidelity Global ex U.S. Index Fund Premium Class (FSGDX) Fidelity International Index Fund Premium Class (FSIVX) Fidelity Emerging Markets Index Fund Premium Class (FPMAX) Fidelity Real Estate Index Fund Premium Class (FSRVX) Fidelity 500 Index Fund Premium Class (FUSVX) Fidelity Total Market Index Fund Premium Class (FSTVX) Fidelity Extended Market Index Fund Premium Class (FSEVX) Fidelity Mid Cap Index Fund Premium Class (FSCKX) Fidelity Small Cap Index Fund Premium Class (FSSVX)
Other funds: Fidelity® Low-Priced Stock Fund Delaware Small Cap Value Fund Institutional Class Fidelity® Large Cap Stock Fund Fidelity® U.S. Government Reserves Fidelity® Government Income Fund Baird Core Plus Bond Fund Class Investor PIMCO Real Return Fund Administrative Class Fidelity® Capital & Income Fund Fidelity® Puritan® Fund Invesco Diversified Dividend Fund R5 Class RidgeWorth Mid-Cap Value Equity Fund Class I Fidelity® Contrafund® Neuberger Berman Mid Cap Growth Fund Trust Class Janus Triton Fund Class T Artisan International Fund Investor Class Invesco International Growth Fund R5 Class Thomas White International Fund Investor Class Glenmede Small Cap Equity Portfolio Class Advisor
Given all this (and assuming the options from 3 years ago still apply), is it worth contributing to its 401(k), or should I just save more aggressively to emergency fund and Dream account? I can comfortably contribution up to 30% thanks to my parents' support, and I still plan on maxing out my Roth IRA next year.
Posted Aug 17, 2017, 8:28 PM UTC