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Started By
Message
Is This a Good 401K Plan?
Posted on 4/30/12 at 8:32 am
Posted on 4/30/12 at 8:32 am
I've been at my employer for a few months and will be eligible to start contributing soon. They match .50 cents on every dollar up to 4%. I know it's not great but it is average or below average?
Vested at:
1 Year - 20%
2 Years - 40%
3 Years - 60%
4 Years - 80%
5 Years - 100%
Vested at:
1 Year - 20%
2 Years - 40%
3 Years - 60%
4 Years - 80%
5 Years - 100%
6
Posted on 4/30/12 at 8:33 am to CQQ
My fiance has a terrible one. It's they match 10% of the first 5% you put in. 
Posted on 4/30/12 at 8:40 am to CQQ
Pretty standard. Not a bad plan. Like a Simple IRA light
Posted on 4/30/12 at 8:40 am to wegotdatwood
quote:
My fiance has a terrible one. It's they match 10% of the first 5% you put in.
Can she get a 10% return by putting the money in a savings account?
Free money is free money. If an employer is stable enough and willing to match a percentage of funds it's a good deal.
Posted on 4/30/12 at 8:54 am to CQQ
As far as a 401k goes, it's about average. As far as an investment goes, it's a no brainer.
Posted on 4/30/12 at 8:58 am to CoolHand
Oh yeah, I'll definitely be participating and maxing it out. Just curious 
Posted on 4/30/12 at 9:07 am to CQQ
somewhere around average probably.
Posted on 4/30/12 at 10:08 am to CQQ
I would say the low side of average, but not terrible. It still beats hell out of a regular savings account.
Posted on 4/30/12 at 10:11 am to CoolHand
quote:
As far as a 401k goes, it's about average. As far as an investment goes, it's a no brainer.
+1
Not amazing, not terrible. But any match is free money. At least go to the 4%
Posted on 4/30/12 at 10:27 am to ZereauxSum
Wife has 100% for the first 1% then 50% to 6%. That's pretty good, right?
Posted on 4/30/12 at 11:14 am to CQQ
Ok, to put actual numbers to it:
DOL statistics
As you can see, a lot goes into the comparison. For your variables:
Earnings matched:
10% matched > 6%
41% matched 6%
49% matched < 6%
Employer match
36% matched 100%
39% matched 50%
14% matched <50%
Not sure about remaining 11%
DOL statistics
As you can see, a lot goes into the comparison. For your variables:
Earnings matched:
10% matched > 6%
41% matched 6%
49% matched < 6%
Employer match
36% matched 100%
39% matched 50%
14% matched <50%
Not sure about remaining 11%
Posted on 4/30/12 at 11:19 am to CoolHand
quote:
CoolHand
Thanks for the stats, that is really cool.
quote:
Not sure about remaining 11%
presumably, they are >100%
For instance, my company:
gives 3% no matter what, 100% match on the first 3%, 50% match on the next 3%.
That's a total "match" of 7.5% on 6% contribution.
Posted on 4/30/12 at 11:31 am to TheHiddenFlask
quote:
That's a total "match" of 7.5% on 6% contribution.
For me, "effective total match" would be a better stat to compare. Mine would me 3.5%. 100% of first 1%, 50% of next 5%.
I'd rather have 50% match on 6% than 100% on 1%.
Posted on 4/30/12 at 11:40 am to CQQ
quote:
Wife has 100% for the first 1% then 50% to 6%. That's pretty good, right?
I'd say it's a little better than average. From what I've seen at different companies, 50% match to 6% was the pre-recession norm.
Posted on 4/30/12 at 11:55 am to CQQ
Much better than the plan my employer offers, which is nothing.
Posted on 4/30/12 at 7:19 pm to El Josey Wales
Love my company. 100% to 6%. But yours is pretty standard. Same my company offered before my job switch.
Posted on 4/30/12 at 8:02 pm to El Josey Wales
quote:
Much better than the plan my employer offers, which is nothing.
My employer before the last didn't start matching until 6 months before I quit. I was baffled by all the people who still didn't contribute after they started matching 50 to 6.
I'll never take an employer match for granted. My current one is nothing your first year, 100% to 6% after that and you're immediately vested in all of it. Hope I retire here.
This post was edited on 4/30/12 at 8:04 pm
Posted on 4/30/12 at 8:24 pm to ZereauxSum
You guys with 100% of 6% are rockin it. That's 12% towards your retirement right there. Awesome.
Posted on 4/30/12 at 8:33 pm to ZereauxSum
quote:
50% match to 6% was the pre-recession norm
thats what im working with
Posted on 4/30/12 at 11:53 pm to TheHiddenFlask
quote:
presumably, they are >100%
Yeah, my company puts in 7% of our earnings if we put in 6%. Maybe we are in that 11%?
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