- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Winter Olympics
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
401k company match question
Posted on 11/29/22 at 3:58 pm
Posted on 11/29/22 at 3:58 pm
My wife started a job that offers a 3% company match on the 401k. I told her she should turn on her 401k contributions since the company is offering the match. She set her 401k contributions to just 1% for the time being.
She gets a statement in the mail showing she's put in $1481.13 and the company match is $44.43.... I do the math and they matched 3% of what she contributed to her 401k instead of matching her contributions up to 3% of her salary.
That means they will match up to 0.09% of your salary
3% company match on 401k is pretty common but I've never heard of a company matching 3% of your contributions.. I told her to get a copy of her 401k benefits explanation because it sounds like either they screwed up the company match or did it this way so they can say they do a 3% company match without really doing a 3% company match.
Also I get that alot of companies offer no match, so what would be the purpose of offering up to 0.09% match on your 401k? If you made $100k and did max contributions you'd get $90 matched by the employer.
She gets a statement in the mail showing she's put in $1481.13 and the company match is $44.43.... I do the math and they matched 3% of what she contributed to her 401k instead of matching her contributions up to 3% of her salary.
That means they will match up to 0.09% of your salary
3% company match on 401k is pretty common but I've never heard of a company matching 3% of your contributions.. I told her to get a copy of her 401k benefits explanation because it sounds like either they screwed up the company match or did it this way so they can say they do a 3% company match without really doing a 3% company match.
Also I get that alot of companies offer no match, so what would be the purpose of offering up to 0.09% match on your 401k? If you made $100k and did max contributions you'd get $90 matched by the employer.
This post was edited on 11/29/22 at 4:09 pm
10
Posted on 11/29/22 at 4:16 pm to umrebel2009
The only thing I could think of adding for discussion is whether they match every time she contributes or they do an annual match once a year and at the time they did their annual match she hadn't contributed much.
I have seen it both ways. A company matching once per year and a company matching every pay check.
I have seen it both ways. A company matching once per year and a company matching every pay check.
Posted on 11/29/22 at 5:54 pm to lsu13lsu
quote:
The only thing I could think of adding for discussion is whether they match every time she contributes or they do an annual match once a year and at the time they did their annual match she hadn't contributed much.
I'm guessing this is what's going on. Many companies make the match payment once a year. It may even be contingent on the employee working for the company for the entire year. If you leave before Dec. 31, no match. If you work through Dec. 31, the matching contribution is made some time in the next month or two.
Posted on 11/29/22 at 7:26 pm to jfw3535
My company pays the match once every year in January. Pisses me off 
Posted on 11/29/22 at 7:44 pm to umrebel2009
I looked at her 401k paperwork and it says they will match $0.12 for every dollar you put in up to 6%. Also the employer contributions aren't fully vested for 4 years.
The numbers still don't really make sense, but regardless it's a pretty terrible setup.
Also her office manager was pretty clueless about it too, she told my wife that if you put 6% in you get a 50% match... which is also a common 401k setup but not how's theirs is
The numbers still don't really make sense, but regardless it's a pretty terrible setup.
Also her office manager was pretty clueless about it too, she told my wife that if you put 6% in you get a 50% match... which is also a common 401k setup but not how's theirs is
Posted on 11/29/22 at 8:07 pm to umrebel2009
My match vest over 5 years and deposited annually
Kind of low rent tbh
Kind of low rent tbh
Posted on 11/29/22 at 9:46 pm to umrebel2009
The purpose would be to get you to agree to employment based on the lure of a false carrot, ie fraud.
Shady as hell if that’s the case. I’d find another job.
Shady as hell if that’s the case. I’d find another job.
Posted on 11/29/22 at 9:58 pm to umrebel2009
I get a 7% match every pay period and then an additional 10% match at the beginning of the year for the prior year base/bonus. It’s nice.
Posted on 11/29/22 at 10:02 pm to MSTiger33
Damn. Good for you.
Posted on 11/30/22 at 4:35 am to umrebel2009
(no message)
This post was edited on 1/30/25 at 8:08 am
Posted on 11/30/22 at 6:04 am to umrebel2009
My company matches once a year to save on third party administrative fees. That’s probably all there is to it.
Posted on 11/30/22 at 8:00 am to teambooyah
I work for a small family company that does offer a 401k, but hardly anyone participates because there is no match. The investment choices are pretty limited, and the administrator charges ~1% fees on top of what fees are charged by the funds inside the 401k. I'm thinking of stopping my contributions and investing that money in an after-tax brokerage account, but the thought of passing up tax free growth goes against everything I was taught about investing. I already max out my ROTH, so a traditional IRA isn't an alternative.
Does it make sense to not contribute to a non-matching 401k so I can get better returns and investment options elsewhere, even if it means I'm paying the tax up-front?
Does it make sense to not contribute to a non-matching 401k so I can get better returns and investment options elsewhere, even if it means I'm paying the tax up-front?
Posted on 11/30/22 at 8:25 am to MSTiger33
quote:
I get a 7% match every pay period and then an additional 10% match at the beginning of the year for the prior year base/bonus. It’s nice.
If there's 1 thing I've learned working in finance as long as I have now companies either have great 401k plans/matches or pretty pathetic or even on existent ones. There isnt a ton of middle ground
My wife's small company (<50 employees) does a 3% safe harbor contribution once a year, and profit sharing is through 401k contributions by them as well (take forever to vest though). So it's not 'bad' but only 3% guaranteed is still kinda meg.
My medium sized company (200-250 employees) is private equity owned so we get screwed over pretty bad in 401k. When I first started almost 10 years ago the match did not exist, almost 10 years later our match is 50% up to 4% now (so 2% of your salary if you put in at least 4%). Its taken years to get here. For the last several years it was 50% up to 3%. So basically a match hasnt really existed much.
But then in talking with so many other people you hear people like you whose company gives them the lunch pail in their 401k. It seems like almost never I hear about something like 4-5% match which I would consider kind of middle ground area. Match is either 3% or less or like yours extremely high.
Posted on 11/30/22 at 8:47 am to thunderbird1100
My company is at up to 4% of your salary every pay period. We have about 50% of the staff contributing to our 401k, and all but 1 person makes sure they hit the 4% match
Posted on 11/30/22 at 9:30 am to thunderbird1100
Yeah, I was in private practice forever and had little to no match. I go in house and now it’s turbo charged. I get pissed thinking about all these kids that start at the company in their early 20s. They will be 401k millionaires in their 30s.
Posted on 11/30/22 at 10:31 am to thunderbird1100
quote:
If there's 1 thing I've learned working in finance as long as I have now companies either have great 401k plans/matches or pretty pathetic or even on existent ones. There isnt a ton of middle ground
Yep. And it is rarely considered when job searching/interviewing and it should be. A great 401k plan is huge.
Posted on 11/30/22 at 12:31 pm to lsu13lsu
My company does 6% match and an additional 5% that vest 20%/year until you hit 5 years. I guess the extra 5% replaced a pension plan
Posted on 11/30/22 at 12:33 pm to Bacchus
quote:
The investment choices are pretty limited, and the administrator charges ~1% fees on top of what fees are charged by the funds inside the 401k.
That’s a harsh situation.
quote:
Does it make sense to not contribute to a non-matching 401k so I can get better returns and investment options elsewhere, even if it means I'm paying the tax up-front?
In light of the above fee (and limited options) scenario, I certainly understand your dilemma. One question I’d have is how long do you plan to stay with this company? What I’m thinking is, if it’s only going to be a few more years, it *might* make sense to take advantage of the pre-tax benefits (while suffering the fees and limited investment options), build the account up as much as possible and have a larger tax advantaged account to roll into a better IRA of your choosing.
There are certainly other considerations. But I mentioned the above because that’s what I’m doing right now. I’m leaving my current employer around the middle of next year. And I’m plowing the maximum into a less than great 401K, just to get the tax advantages and have more to roll into my IRA.
Posted on 11/30/22 at 8:15 pm to Jag_Warrior
quote:
In light of the above fee (and limited options) scenario, I certainly understand your dilemma. One question I’d have is how long do you plan to stay with this company? What I’m thinking is, if it’s only going to be a few more years, it *might* make sense to take advantage of the pre-tax benefits (while suffering the fees and limited investment options), build the account up as much as possible and have a larger tax advantaged account to roll into a better IRA of your choosing.
There are certainly other considerations. But I mentioned the above because that’s what I’m doing right now. I’m leaving my current employer around the middle of next year. And I’m plowing the maximum into a less than great 401K, just to get the tax advantages and have more to roll into my IRA.
I could see myself retiring with this company in the next 10 years or so, so you make a good point about continuing to put money in so I'll have more to rollover to a tax deferred account when I retire.
quote:
That’s a harsh situation.
It gets a little trickier. It's a small company, and I'm one of only a few highly compensated employees (HCEs). As such, there are limits on how much I can contribute more than non-NCEs. Well, since there's no match and hardly anyone else contributes, and when they do, it must not be a whole lot, each year I fail some discrimination testing because I'm contributing more than others at the company. So, not only can I not come anywhere near maxing out the account (which might be a blessing considering the fees and limited investment options), but I have to juggle how much to contribute each year because some years I get a hefty "refund" of my contributions back to me. So I can't even reliably predict how much money I'll be able to put in to this stupid thing...
Posted on 11/30/22 at 10:31 pm to Bacchus
quote:
I have to juggle how much to contribute each year because some years I get a hefty "refund" of my contributions back to me. So I can't even reliably predict how much money I'll be able to put in to this stupid thing...
Hopefully they pay you well enough to put up with that. If not, I don’t think I could deal with that for 10 more loooong years.
Page 1 of 2
Popular
Back to top
Follow TigerDroppings for LSU Football News