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401k employer match -- vesting?
8/27/2011 9:07:36 PM
I just got a new job a little over a month ago. I'm relatively young (25) and this is the first place I've worked that has offered retirement benefits.
Reading through the info on how our 401k is managed (through Fidelity, btw), it appears that the employer contribution to my 401k will vest at 25% per year until it is fully vested.
Being new to all this 末 is this normal?
As a side note, the employer matches "50% of the first 6% (pre-tax and / or after-tax) of employee payroll deferrals." We can defer up to 25% of our paychecks. I am reading it like this:
Me: 3%, employer: 1.5%
Me: 6%, employer: 3%
Me: 15%, employer: 3%
etc.
Is this correct?
Thanks for any insight from the hive mind.
Reading through the info on how our 401k is managed (through Fidelity, btw), it appears that the employer contribution to my 401k will vest at 25% per year until it is fully vested.
Being new to all this 末 is this normal?
As a side note, the employer matches "50% of the first 6% (pre-tax and / or after-tax) of employee payroll deferrals." We can defer up to 25% of our paychecks. I am reading it like this:
Me: 3%, employer: 1.5%
Me: 6%, employer: 3%
Me: 15%, employer: 3%
etc.
Is this correct?
Thanks for any insight from the hive mind.
8/27/2011 9:32:32 PM
to my understanding the vesting part is pretty standard.. some places I think may run it out to 5 or 7 yrs instead of your 4..
Unless im missing something your employer contributions seem accurate.. Take advantage of any 'cash match' your employer offers, compound interest is a GREAT thing over the next 30 yrs of your employment..
congrats on the new job
Brian
Unless im missing something your employer contributions seem accurate.. Take advantage of any 'cash match' your employer offers, compound interest is a GREAT thing over the next 30 yrs of your employment..
congrats on the new job
Brian
8/27/2011 11:06:40 PM
Originally Posted By thatguy:
to my understanding the vesting part is pretty standard.. some places I think may run it out to 5 or 7 yrs instead of your 4..
Unless im missing something your employer contributions seem accurate.. Take advantage of any 'cash match' your employer offers, compound interest is a GREAT thing over the next 30 yrs of your employment..
congrats on the new job
Brian
to my understanding the vesting part is pretty standard.. some places I think may run it out to 5 or 7 yrs instead of your 4..
Unless im missing something your employer contributions seem accurate.. Take advantage of any 'cash match' your employer offers, compound interest is a GREAT thing over the next 30 yrs of your employment..
congrats on the new job
Brian
Thanks for the info.
I'm not surprised to see that my company apparently vests quicker than some others 末 I would have been surprised had it been the other way, since all my other benefits have thus far been fantastic ( and I plan to take full advantage of them).
8/28/2011 2:43:04 AM
Originally Posted By SparticleBrane:
We can defer up to 25% of our paychecks.
We can defer up to 25% of our paychecks.
For 2010 and 2011, the IRS caps employee 401K contributions at $16,500 per year unless you're over 50. Over 50 gets to bump it another $5,500.
8/28/2011 9:46:44 AM
The vesting may also depend on whether you get laid off or whether you leave voluntarily. I'd been at one job for only a year when I got laid off. The vesting period was 4 years, but since I wasn't leaving voluntarily I got 100% of what my employer had contributed to my 401k.
Some employers vest immediately, the longest I've seen was 5 years.
Some employers vest immediately, the longest I've seen was 5 years.
8/28/2011 10:04:32 AM
My girlfriend has the same 50% up to 6% deal.
She's meeting her 15% annual goal like this:
6% 401k
3% Employer Match
6% Roth IRA
––––––––––––––––-
15% Total
She's meeting her 15% annual goal like this:
6% 401k
3% Employer Match
6% Roth IRA
––––––––––––––––-
15% Total
8/28/2011 12:11:17 PM
The math looks right to me and pretty normal. My company vests over 5 years, but matches better at 1:1 for the first 6% and then a 4% profit sharing every year. So I put in 6% and they put in 10%. Just set your contributions to 6% for the maximum match, pick some long term growth funds and look at it once a year.
8/28/2011 12:25:22 PM
Originally Posted By brutal:
For 2010 and 2011, the IRS caps employee 401K contributions at $16,500 per year unless you're over 50. Over 50 gets to bump it another $5,500.
Originally Posted By SparticleBrane:
We can defer up to 25% of our paychecks.
We can defer up to 25% of our paychecks.
For 2010 and 2011, the IRS caps employee 401K contributions at $16,500 per year unless you're over 50. Over 50 gets to bump it another $5,500.
Thanks 末 I won't be anywhere close to putting that much away.
Originally Posted By Bubbles:
The vesting may also depend on whether you get laid off or whether you leave voluntarily. I'd been at one job for only a year when I got laid off. The vesting period was 4 years, but since I wasn't leaving voluntarily I got 100% of what my employer had contributed to my 401k.
Some employers vest immediately, the longest I've seen was 5 years.
The vesting may also depend on whether you get laid off or whether you leave voluntarily. I'd been at one job for only a year when I got laid off. The vesting period was 4 years, but since I wasn't leaving voluntarily I got 100% of what my employer had contributed to my 401k.
Some employers vest immediately, the longest I've seen was 5 years.
Good point; I will need to read up on the company policies regarding that.
8/28/2011 12:25:35 PM
Yup, and you should put in 6% at a minimum though I would recommend more. Maybe start at 6% and up it 1% every year come raise time.
9/4/2011 4:57:22 PM
I believe this years' maximum is 19%.
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9/7/2011 12:14:41 AM
Originally Posted By brutal:
For 2010 and 2011, the IRS caps employee 401K contributions at $16,500 per year unless you're over 50. Over 50 gets to bump it another $5,500.
Originally Posted By SparticleBrane:
We can defer up to 25% of our paychecks.
We can defer up to 25% of our paychecks.
For 2010 and 2011, the IRS caps employee 401K contributions at $16,500 per year unless you're over 50. Over 50 gets to bump it another $5,500.
But with deferrals, match, etc, it is possible to contribute 25% of your income, up to $49K in a defined contribution plan.
9/11/2011 1:05:38 PM
Originally Posted By woodsie:
My girlfriend has the same 50% up to 6% deal.
She's meeting her 15% annual goal like this:
6% 401k
3% Employer Match
6% Roth IRA
末末末末末末末末-
15% Total
My girlfriend has the same 50% up to 6% deal.
She's meeting her 15% annual goal like this:
6% 401k
3% Employer Match
6% Roth IRA
末末末末末末末末-
15% Total
Your GF is doing it right!
9/20/2011 3:09:28 AM
Originally Posted By bobapunk:
Your GF is doing it right!
Originally Posted By woodsie:
My girlfriend has the same 50% up to 6% deal.
She's meeting her 15% annual goal like this:
6% 401k
3% Employer Match
6% Roth IRA
末末末末末末末末-
15% Total
My girlfriend has the same 50% up to 6% deal.
She's meeting her 15% annual goal like this:
6% 401k
3% Employer Match
6% Roth IRA
末末末末末末末末-
15% Total
Your GF is doing it right!
+1
10/1/2011 12:59:26 PM
Originally Posted By SparticleBrane:
Thanks for the info.
I'm not surprised to see that my company apparently vests quicker than some others 末 I would have been surprised had it been the other way, since all my other benefits have thus far been fantastic ( and I plan to take full advantage of them).
Originally Posted By thatguy:
to my understanding the vesting part is pretty standard.. some places I think may run it out to 5 or 7 yrs instead of your 4..
Unless im missing something your employer contributions seem accurate.. Take advantage of any 'cash match' your employer offers, compound interest is a GREAT thing over the next 30 yrs of your employment..
congrats on the new job
Brian
to my understanding the vesting part is pretty standard.. some places I think may run it out to 5 or 7 yrs instead of your 4..
Unless im missing something your employer contributions seem accurate.. Take advantage of any 'cash match' your employer offers, compound interest is a GREAT thing over the next 30 yrs of your employment..
congrats on the new job
Brian
Thanks for the info.
I'm not surprised to see that my company apparently vests quicker than some others 末 I would have been surprised had it been the other way, since all my other benefits have thus far been fantastic ( and I plan to take full advantage of them).
That's not a bad deal.
Mine vested after you had worked there a year. If you remained employed after that it was immediate.
I haven't looked to see if that's changed.
10/3/2011 9:30:10 PM
I did the 50% of up-to 6% thing for many years. Not bad.
I also interviewed for a place that had a MANDATORY 2% employee contribution after your first year, and it went up 1% every year till it hit 6% (with a 100% match i believe) after Year 1. Didn't like the mandatory part, but the 100% match was kinda nice, as were some of the other benes (like 100% insurance coverage at certain medical facilities and free generic meds). The pay was low enough i would have had to pick up a 2nd job regardless. Didnt go work for them.
I also interviewed for a place that had a MANDATORY 2% employee contribution after your first year, and it went up 1% every year till it hit 6% (with a 100% match i believe) after Year 1. Didn't like the mandatory part, but the 100% match was kinda nice, as were some of the other benes (like 100% insurance coverage at certain medical facilities and free generic meds). The pay was low enough i would have had to pick up a 2nd job regardless. Didnt go work for them.
10/5/2011 10:21:04 PM
Does this make sense-
Employer contributes 2:1 up to 5%, I have my contribution set at 19%, This started in March, and by my calcs I won't be hitting the 16.5k limit by year end.
Do I effectively have 29% or am I missing something here?
Im obviously new to this, so I maxed it out, but it never occurred to me that I may be screwing myself.
Thoughts?
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Employer contributes 2:1 up to 5%, I have my contribution set at 19%, This started in March, and by my calcs I won't be hitting the 16.5k limit by year end.
Do I effectively have 29% or am I missing something here?
Im obviously new to this, so I maxed it out, but it never occurred to me that I may be screwing myself.
Thoughts?
Posted Via AR15.Com Mobile
10/5/2011 10:46:23 PM
Originally Posted By SparticleBrane:
I just got a new job a little over a month ago. I'm relatively young (25) and this is the first place I've worked that has offered retirement benefits.
Reading through the info on how our 401k is managed (through Fidelity, btw), it appears that the employer contribution to my 401k will vest at 25% per year until it is fully vested.
Being new to all this 末 is this normal?
As a side note, the employer matches "50% of the first 6% (pre-tax and / or after-tax) of employee payroll deferrals." We can defer up to 25% of our paychecks. I am reading it like this:
Me: 3%, employer: 1.5%
Me: 6%, employer: 3%
Me: 15%, employer: 3%
etc.
Is this correct?
Thanks for any insight from the hive mind.
I just got a new job a little over a month ago. I'm relatively young (25) and this is the first place I've worked that has offered retirement benefits.
Reading through the info on how our 401k is managed (through Fidelity, btw), it appears that the employer contribution to my 401k will vest at 25% per year until it is fully vested.
Being new to all this 末 is this normal?
As a side note, the employer matches "50% of the first 6% (pre-tax and / or after-tax) of employee payroll deferrals." We can defer up to 25% of our paychecks. I am reading it like this:
Me: 3%, employer: 1.5%
Me: 6%, employer: 3%
Me: 15%, employer: 3%
etc.
Is this correct?
Thanks for any insight from the hive mind.
Just thought I'd throw something out since you're just getting started - The standard rule of thumb is to maximize the employer match on your 401(k), then move to Roth, maximize that and then move back to 401(k) or traditional IRA as your savings allow.
Doing that, you would want to put the first 6% into your 401(k), and then contribute up to the $5k max into a Roth IRA before you go back to contributing to the 401(k).
10/6/2011 8:48:56 PM
Just thought I'd throw something out since you're just getting started - The standard rule of thumb is to maximize the employer match on your 401(k), then move to Roth, maximize that and then move back to 401(k) or traditional IRA as your savings allow.
Doing that, you would want to put the first 6% into your 401(k), and then contribute up to the $5k max into a Roth IRA before you go back to contributing to the 401(k).
Doing that, you would want to put the first 6% into your 401(k), and then contribute up to the $5k max into a Roth IRA before you go back to contributing to the 401(k).
Thanks for the advice.
Right now though, I won't be maxing anything out unless I get a raise. Paying down student loans is my #1 priority for the next 2-3 years.
10/18/2011 8:25:50 PM
Originally Posted By Cole2534:
Does this make sense-
Employer contributes 2:1 up to 5%, I have my contribution set at 19%, This started in March, and by my calcs I won't be hitting the 16.5k limit by year end.
Do I effectively have 29% or am I missing something here?
Im obviously new to this, so I maxed it out, but it never occurred to me that I may be screwing myself.
Thoughts?
Posted Via AR15.Com Mobile
Does this make sense-
Employer contributes 2:1 up to 5%, I have my contribution set at 19%, This started in March, and by my calcs I won't be hitting the 16.5k limit by year end.
Do I effectively have 29% or am I missing something here?
Im obviously new to this, so I maxed it out, but it never occurred to me that I may be screwing myself.
Thoughts?
Posted Via AR15.Com Mobile
The IRS limit is $16,500 for Employee contributions. Employer contributions are around 47k a year.
Not sure where the 19% came from ? Maybe that is your employers max contribution
Employer contributes 2:1, probably means for every 2% you contribute, they match 1%. If so, you effectively have 24%.
10/18/2011 9:00:33 PM
No, they double what I apply up to 5%. I put in 5, they put in 10.
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10/18/2011 9:04:30 PM
Originally Posted By Cole2534:
No, they double what I apply up to 5%. I put in 5, they put in 10.
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No, they double what I apply up to 5%. I put in 5, they put in 10.
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Heck of a deal.
Puts you at %29%, But remember the $16,500 IRS limit is for YOUR contributions.
10/31/2011 12:35:40 PM
Yes, I keep my tin foil tight, but...
Something to keep in mind, is that you dont necessarily have access to this money, uless the fed says you can.
With an IRA, if it is money you put in, you can get it back out pretty much penalty free. However, with the 401K you can only take out a loan against it (and pay it back + intereset), or withdraw for certain qualifying situations, or roll it over if you quit/lose your job. Personally, I dont like anyone else telling me that I cant touch my money, but that is just me.
Not trying to say 401K's are not a good idea, just want to make sure you consider all of this before you get a load of money in there and potentially cant use it.
Something to keep in mind, is that you dont necessarily have access to this money, uless the fed says you can.
With an IRA, if it is money you put in, you can get it back out pretty much penalty free. However, with the 401K you can only take out a loan against it (and pay it back + intereset), or withdraw for certain qualifying situations, or roll it over if you quit/lose your job. Personally, I dont like anyone else telling me that I cant touch my money, but that is just me.
Not trying to say 401K's are not a good idea, just want to make sure you consider all of this before you get a load of money in there and potentially cant use it.
10/31/2011 12:37:50 PM
Mine will match 100% up to $15k in a calendar year.
And you get vested in that after 7yrs.
And you get vested in that after 7yrs.
