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  1. #1
    Join Date
    Mar 2008

    Is 401k COMPULSORY by law?

    Hi everyone, I'm in New York. The company said that 401K is compulsory by law and everybody MUST join. I am only 24 and I really do not need it.....while the company contribution will be deducted from yearly bonus! I dont know what I can do now...
    Could anyone give me some advise?
    Thank you.

  2. #2
    Join Date
    Feb 2006
    Philadelphia, PA
    I don't know whether they are allowed to require you to participate, but I can tell you that it's a very good idea to start contributing now. It doesn't matter that retirement is a long way off, the earlier you start, the more time your money has to grow. Don't think of the money as a deduction, it's still going into your account.

  3. #3
    Join Date
    Aug 2007
    With Capt'n Hook
    They changed the requirements so that people are automatically opted in, unless they go and sign papers to opt out.

    OP - you much better off starting your retirement savings NOW. Start with 2-3%, and slowly get to 15%. You'll be way ahead of the game when you get older.

  4. #4
    Join Date
    Nov 2001
    There is no LAW that requires an employer to provide a 401k plan.

    There is no LAW that makes it mandatory for an employee to participate in a 401k plan if the employer chooses to provide one.

    However, it is possible, and if this is the case it is legal, that your employer has a plan under which everyone is automatically enrolled unless they actively take steps to decline coverage. If that is the case, then nothing you can do will get back what has already been contributed as long as you are employed by this employer, and that is Federal law. Depending on the plan, you may or may not be able to drop participation now; you will have to read the plan document to see when and under what circumstances you can drop.

    You may not think it necessary now, but I promise you that if you do not participate, when you are my age you will fervently wish that you had. If you have the opportunity to participate at 24, it is criminally stupid to pass up the opportunity.

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