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401k

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NorthShoreBuck

NorthShoreBuck

True Madness Requires Significant Intelligence
Maybe we can keep this one off the political board.
You can invest up to $14,000 this year with a $4,000 kicker if you are over 50.

The only gotcha is if you make more than $95K. You are then considered a highly compensated employee and the rest of the employees need to kick in to theirs or your amount is cut.

So do you have a 401k?
Does your company match? How much?
How much are you putting in?
I know teachers and the self employed are covered under other programs so what are your options?
How about investment options?

My company is matching 50%.
Last year they bumped it up to 65% in a one time deal.
I may try to max out, $21K a year for the next 20-25 years and I should not have to worry about Social Security.
Nice diversified funds, smallcap appreciation, midcap value, large cap G&I, foreign stocks, bonds and some natural resources.

Just don't get divorced or die young!
 
I am 25 and just started my 401k about 7 months ago. I am amazed at how I have over 2k already in their. I kick in 6% and my company matches that. Once I get my annual raise of 4% I am going to bump that 6% I kick in to 10% however my company only matches up to 6% I dont know much about 401k but the funds I picked have done quite well.
 
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I don't want to get too technical with you, however your above "gotcha" statement is false.... Highly comped folks would take advantage of safe harbor plans to get around the highly comp rule...

Also your limits are only for 401(k),403(b), and 457 (there are actually different types of 457 plans, too deep for this discusion) plans... (there are also other plans you may or may not be able to take advantage of... the max for qualified plans is $42,000 (can go higher for non-qual plans... usually for exec. comp though). The SEP earnings limit for '05 is $210k ... SIMPLE IRA plans are falling off the face of the earth so no sense in discussing them :tongue2:

403b and 457 plans are EE money (well the most common type of 457 is... executive comp is a different story, however I doubt anybody on this board falls into that category...), however you can contribue to both plans ($18k each if over the age of 50) plus the EE and ER contributions to the pension/savings plan (which for the State is 8.35% EE and 8.35% State dollar for dollar... is mandated), so long as the total into all plans is $52k or less...

There are also corporate pension plans (some a gimmie, some a matching), qualified cash balance pension plans (and non-qual), profit sharring plans, stock purchase plans, stock option plans, etc. etc. etc.

We have a 401k plan with up to a 6% dollar for dollar match. We also have a cash balance pension plan (weighted for years of service and pay... no match all company $$$), and non-qual cash balance pension plan (general obligation of company...if company goes under so does your non-qual plan... again no match all company $$$), a discounted stock purchase plan (buy shares of the common stock at a discount), an employee stock option plan (gimmies usually long vest schedules though), executives get a reg. pension plan (golden parachute... not too long of service and all company $$$), great insurance (life, health, vision, dental, disability, death and dismemberment, accidental death, etc. etc. all on spouse and kids as well)... the investment options are good (one could argue some of the funds... by and large good selection and funds though), sm value, sm growth, mid value, mid growth, large value, large growth, a couple international and global options, some short, med, and long duration bond funds, a gic, money market, company stock, and some sector plays...

I max everything I can (the stock purchase plan allows for up to $50k of stock to be purchase at a discount... that is really the only benefit I don't max to the limit)...
 
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FKAGobucks877 said:
I don't have any type of retirement fund. My son, however, is going to be a professional football player. He will take care of me.
Click to expand...
I'm glad to see I'm not the only one on that plan. :p
I currently have a Simple IRA that my company matches up to 3%. I'm hoping to get back into the state retirement system before I get too old for 30 years to be too long. I was already in PERS for a year and a half during college, so hopefully that will help a little.
 
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gbear
I was trying to keep it simple; you are you are correct it does depend on the plan. Ours is simple and we do have some employees that opt not to particpate at all. For me it is an issue.

Wise choice not to max out in the company stock.
There are too many IBM, Enron and Lucent stories out there.

If you are young, the magic of compounding, along with the companies match, will give you some astounding results over the long term.

Next year the 401K goes up to $15K, does the over 50 catch up go up to $5K? I'm not fifty yet and with two kids far from college age I need to balance my investments. I do like the idea of the catch up.

I have a "defined pension" from a company I worked at long ago. Based on my income and years of service I believe I will get $250-$275 a month from them. Might be able to buy a burger with that in 20 years.
 
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We've got a 401(k), and I put in 10% of my salary. The company matches 50% of what you contribute on the amount up to 6% of your salary. So if you don't put in at least 6%, you're a dope.

My wife also puts 10% into her plan, and then we put another 10-12% into a personal investment account.
 
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Government employee here (Go ahead and get the negative comments out of your system now) and we have a 401A, government equivalent of 401K. Employer match is 9% and a required 3% employee match. We also have available to employees a 457 plan, but there is no employer match.

Personally, my wife and I max out our Roth every year as her retirement sucks (private sector) and then I hold back as much as I can for 457.

I figure I should be able to retire at 60 and if things go as projected actually make more than I do now, even when adjusted for inflation. Of course, I am sure it will all go to health insurance costs :)
 
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Nola,

for diversification sake it isn't a good idea... however the $50k is an annual limit. So in theory you could get the account up to $50k... sell it after the required holding period, then buy it back (be careful of wash rule if you took a loss on any portion of the sale) at the discount... Repeat each year, and you basically wind up with the discount as another form of income. Of course the stock could fall and wash the income away... however the discount is large, and the dividend is high... currently much more than the yearly trading band. If you bought at the top and sold at the bottom you would still come out on the plus side due to the discount and dividend earned over the course of the year... I'm slowly but surely building the account to the point I can take advantage of this (I still buy/sell each year to take advantage of the discount, just not the $50k max).
 
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