Author Topic: 401k comedy  (Read 10127 times)

M5

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401k comedy
« on: December 20, 2018, 03:10:41 PM »
My wife is starting a new job at the beginning of the year and has been filling out all her HR paperwork. She's going from a place with virtually no retirement benefits to one with a 401k and 7% match, 4% of which is automatically vested. She elected to contribute 20% of her salary and was caught off guard when HR called here to verify that she did indeed mean 20%. Still shocking that most people don't save much or anything!

slugline

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Re: 401k comedy
« Reply #1 on: December 21, 2018, 08:16:38 AM »
Better watch out -- they might take it as a obvious sign that they're paying too much! LOL

SquirrelStache

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Re: 401k comedy
« Reply #2 on: December 21, 2018, 08:36:24 AM »
Sounds like she's in a sweet spot!

At my company they automatically enroll you in 3% unless you specifically opt out of it. The fact that anyone would opt out of only 3% is beyond me, especially as we have a company match.

MasterStache

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Re: 401k comedy
« Reply #3 on: December 21, 2018, 08:56:31 AM »
Ha, that is pretty funny. I am sure their facial expressions were priceless.

dude

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Re: 401k comedy
« Reply #4 on: December 21, 2018, 09:45:56 AM »
My wife runs HR at her company, and most of the folks there are above average to very high earners, and she said besides her and like 4 other people (3 of whom are managing partners), nobody else maxes their 401k contributions.

patchyfacialhair

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Re: 401k comedy
« Reply #5 on: December 21, 2018, 09:50:29 AM »
There was uproar at my company because now you have to opt out of the 401k each year, not just when hired. I get that times are tough for the lower earners, but 8% matched dollar for dollar is hard to pass up. Turns out a lot of people do.

boyerbt

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Re: 401k comedy
« Reply #6 on: December 21, 2018, 10:24:47 AM »
Sounds like she's in a sweet spot!

At my company, they automatically enroll you in 3% unless you specifically opt out of it. The fact that anyone would opt out of only 3% is beyond me, especially as we have a company match.

We had a quarterly 401k meeting recently and I was discussing with our internal management partner and some employees that our company should start an opt-out program to get more participation. The partner has already addressed this with our CEO to no avail and several employees thought that this would be illegal.

35andFI

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Re: 401k comedy
« Reply #7 on: December 21, 2018, 10:29:35 AM »
7% match, wow! I hope her coworkers contribute ≥7% as well.


Just Joe

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Re: 401k comedy
« Reply #8 on: December 21, 2018, 02:51:57 PM »
Could it be that investing in a 401K might have higher fees than just dumping money directly into something like VSTAX? That is the question I want to answer this year during our holiday vacation while I have time.

My idea is get the employer match and leave that money in that account - and then dump the rest of the money we can spare directly into VSTAX. I don't have anyone I can factually discuss it with so I'll chase the topic elsewhere here at MMM.

I have a small number of coworkers who won't retire b/c they seem to have nothing else to do but come to work. Or perhaps they don't have enough money? Hard to tell. I already found one coworker dead at (beside) their desk.

patchyfacialhair

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Re: 401k comedy
« Reply #9 on: December 21, 2018, 03:01:55 PM »
Could it be that investing in a 401K might have higher fees than just dumping money directly into something like VSTAX? That is the question I want to answer this year during our holiday vacation while I have time.

My idea is get the employer match and leave that money in that account - and then dump the rest of the money we can spare directly into VSTAX. I don't have anyone I can factually discuss it with so I'll chase the topic elsewhere here at MMM.

I have a small number of coworkers who won't retire b/c they seem to have nothing else to do but come to work. Or perhaps they don't have enough money? Hard to tell. I already found one coworker dead at (beside) their desk.

The general consensus is that the tax savings from contributing to a 401k up to the max (19k) far outweighs the drag from crappy fund choices in said 401k. People far smarter than me have ran the numbers to come up with that.

MrsWolfeRN

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Re: 401k comedy
« Reply #10 on: December 21, 2018, 03:33:27 PM »
Could it be that investing in a 401K might have higher fees than just dumping money directly into something like VSTAX? That is the question I want to answer this year during our holiday vacation while I have time.

My idea is get the employer match and leave that money in that account - and then dump the rest of the money we can spare directly into VSTAX. I don't have anyone I can factually discuss it with so I'll chase the topic elsewhere here at MMM.

I have a small number of coworkers who won't retire b/c they seem to have nothing else to do but come to work. Or perhaps they don't have enough money? Hard to tell. I already found one coworker dead at (beside) their desk.
Not always, my 403b has Vanguard institutional shares with a .02% ER. I'm sorry about your coworker.

TexasRunner

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Re: 401k comedy
« Reply #11 on: December 21, 2018, 04:13:22 PM »
Could it be that investing in a 401K might have higher fees than just dumping money directly into something like VSTAX? That is the question I want to answer this year during our holiday vacation while I have time.

My idea is get the employer match and leave that money in that account - and then dump the rest of the money we can spare directly into VSTAX. I don't have anyone I can factually discuss it with so I'll chase the topic elsewhere here at MMM.

I have a small number of coworkers who won't retire b/c they seem to have nothing else to do but come to work. Or perhaps they don't have enough money? Hard to tell. I already found one coworker dead at (beside) their desk.

The general consensus is that the tax savings from contributing to a 401k up to the max (19k) far outweighs the drag from crappy fund choices in said 401k. People far smarter than me have ran the numbers to come up with that.

+1

I have researched that quite a bit on here about 2 years ago due to crappy choices for 401k at my current employer.  Everything is 1% to 2.2% and up.  The only time it doesn't make sense is if there are high-ish front end fees that hit every time you contribute (basically every paycheck).  Those ought to be illegal...

But the tax-free growth and deposit makes it still worth it even with the drag.

Here are the threads I read:
https://forum.mrmoneymustache.com/investor-alley/using-a-high-fee-401k/
https://forum.mrmoneymustache.com/investor-alley/finally-dug-into-my-401k-fees/

and the "best" one IMO

https://forum.mrmoneymustache.com/investor-alley/high-fee-tax-deferred-401k-vs-low-fee-taxable-index-fund/



(Also good to know, search the forums like this:  https://www.google.com/search?q=site%3Aforum.mrmoneymustache.com+401k+fees+participate&rlz=1C1CHBF_enUS725US726&oq=site%3Aforum.mrmoneymustache.com+401k+fees+participate&aqs=chrome..69i57j69i58.13743j1j7&sourceid=chrome&ie=UTF-8 with "Site:" in front of the search.  Google is pretty good at finding the best threads because it can analyse the visitation to that specific thread instead of simply keywording).

35andFI

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Re: 401k comedy
« Reply #12 on: December 21, 2018, 04:49:39 PM »
Could it be that investing in a 401K might have higher fees than just dumping money directly into something like VSTAX? That is the question I want to answer this year during our holiday vacation while I have time.

My idea is get the employer match and leave that money in that account - and then dump the rest of the money we can spare directly into VSTAX. I don't have anyone I can factually discuss it with so I'll chase the topic elsewhere here at MMM.

I have a small number of coworkers who won't retire b/c they seem to have nothing else to do but come to work. Or perhaps they don't have enough money? Hard to tell. I already found one coworker dead at (beside) their desk.

I'm assuming that you mean VTSAX in a taxable account.

If the 401k options have high fees, why not contribute just enough to get the match, then max out an IRA before looking further at 401k vs taxable?

And you found a dead coworker at work? Oh my goodness, I can't even imagine!

MilesTeg

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Re: 401k comedy
« Reply #13 on: December 22, 2018, 03:31:56 PM »
Could it be that investing in a 401K might have higher fees than just dumping money directly into something like VSTAX? That is the question I want to answer this year during our holiday vacation while I have time.

My idea is get the employer match and leave that money in that account - and then dump the rest of the money we can spare directly into VSTAX. I don't have anyone I can factually discuss it with so I'll chase the topic elsewhere here at MMM.

I have a small number of coworkers who won't retire b/c they seem to have nothing else to do but come to work. Or perhaps they don't have enough money? Hard to tell. I already found one coworker dead at (beside) their desk.

With a match, you instantly double your money (or as I prefer to say, receive all your cash compensation instead of the company keeping some).

That will far,far out weight crappy fees

Just Joe

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Re: 401k comedy
« Reply #14 on: December 22, 2018, 03:46:36 PM »
Thanks for the guidance. I'll be studying this over the holidays in the quiet moments.

The coworker incident was a long time ago. The benefit of the experience was it kick started our thoughts about how I didn't want myself or DW to work until we were old and unable.

I now return the thread to funny anecdotes and eye rollers.
« Last Edit: December 22, 2018, 03:48:25 PM by Just Joe »

Kronsey

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Re: 401k comedy
« Reply #15 on: December 22, 2018, 05:07:10 PM »
Could it be that investing in a 401K might have higher fees than just dumping money directly into something like VSTAX? That is the question I want to answer this year during our holiday vacation while I have time.

My idea is get the employer match and leave that money in that account - and then dump the rest of the money we can spare directly into VSTAX. I don't have anyone I can factually discuss it with so I'll chase the topic elsewhere here at MMM.

I have a small number of coworkers who won't retire b/c they seem to have nothing else to do but come to work. Or perhaps they don't have enough money? Hard to tell. I already found one coworker dead at (beside) their desk.

The general consensus is that the tax savings from contributing to a 401k up to the max (19k) far outweighs the drag from crappy fund choices in said 401k. People far smarter than me have ran the numbers to come up with that.

+1

I have researched that quite a bit on here about 2 years ago due to crappy choices for 401k at my current employer.  Everything is 1% to 2.2% and up.  The only time it doesn't make sense is if there are high-ish front end fees that hit every time you contribute (basically every paycheck).  Those ought to be illegal...

But the tax-free growth and deposit makes it still worth it even with the drag.

Here are the threads I read:
https://forum.mrmoneymustache.com/investor-alley/using-a-high-fee-401k/
https://forum.mrmoneymustache.com/investor-alley/finally-dug-into-my-401k-fees/

and the "best" one IMO

https://forum.mrmoneymustache.com/investor-alley/high-fee-tax-deferred-401k-vs-low-fee-taxable-index-fund/



(Also good to know, search the forums like this:  https://www.google.com/search?q=site%3Aforum.mrmoneymustache.com+401k+fees+participate&rlz=1C1CHBF_enUS725US726&oq=site%3Aforum.mrmoneymustache.com+401k+fees+participate&aqs=chrome..69i57j69i58.13743j1j7&sourceid=chrome&ie=UTF-8 with "Site:" in front of the search.  Google is pretty good at finding the best threads because it can analyse the visitation to that specific thread instead of simply keywording).

For those of you with terrible 401k options, have you considered approaching management/ownership with the idea of switching providers?

I use www.guideline.com for our small biz (just my wife and I are employees) and encourage all of my small business clients to do the same. Amazing investment choices and rock bottom fees (all paid by the employer FYI).

It would at least be worth a shot. Try approaching them higjlighting the benefits to them (lower out of pocket expenses to the biz, better for their own retirement, etc). Unfortunately many small business owners don't give a crap about their employees' retirement savings options, so pitch it as better for them (and you will be handsomely rewarded if they agree to switch).

TomTX

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Re: 401k comedy
« Reply #16 on: December 22, 2018, 05:56:08 PM »

For those of you with terrible 401k options, have you considered approaching management/ownership with the idea of switching providers?

I was successful at getting the medium fee target date funds swapped out for low fee target date funds. Sent a nice letter with terms like "fiduciary duty".

Just on principle. I don't actually use those funds. I use VIIIX at 0.02% ER.

cawiau

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Re: 401k comedy
« Reply #17 on: December 24, 2018, 12:21:27 PM »
My wife employers does:
1% - 5% salary match
2% - 7.5% salary match
3% - 10%  salary match

Even with such generous match, a lot of people don’t even bother and yes when my wife elected to max it she also got a call from HR wanting to make sure she elected the right amount...


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MDM

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Re: 401k comedy
« Reply #18 on: December 24, 2018, 02:06:02 PM »
Could it be that investing in a 401K might have higher fees than just dumping money directly into something like VSTAX? That is the question I want to answer this year during our holiday vacation while I have time.

My idea is get the employer match and leave that money in that account - and then dump the rest of the money we can spare directly into VSTAX. I don't have anyone I can factually discuss it with so I'll chase the topic elsewhere here at MMM.

I have a small number of coworkers who won't retire b/c they seem to have nothing else to do but come to work. Or perhaps they don't have enough money? Hard to tell. I already found one coworker dead at (beside) their desk.

The general consensus is that the tax savings from contributing to a 401k up to the max (19k) far outweighs the drag from crappy fund choices in said 401k. People far smarter than me have ran the numbers to come up with that.
True in many (most?) cases, but there is a limit.  See To 401k or not to 401k? That is the question and links therein for details.

DaMa

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Re: 401k comedy
« Reply #19 on: December 25, 2018, 11:23:58 AM »
At my last job, HR called to confirm my contribution of $18k.  I bet there weren't more than 4 people out of 300 that maxed out.  Also, the management company added 1% to the fees for the Vanguard index funds that it offered.  I was so disgusted.  But it was a small company with what we called "friends and family" vendors.  Luckily I wasn't there long.

phildonnia

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Re: 401k comedy
« Reply #20 on: January 02, 2019, 04:48:22 PM »
She elected to contribute 20% of her salary and was caught off guard when HR called here to verify that she did indeed mean 20%.

I started a new job in mid-October, and with only two-and-a-half months to go in the year, I elected 75% for my 401(k).  I got no call from HR, not so much as an email. 

Still shocking that most people don't save much or anything!

If you're curious, you can request the annual report from your 401(k) administrator to get some general statistics.  I had a look at mine, and it looks like we have about a 40% participation rate, with an average of 6.5% contribution. 

peeps_be_peeping

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Re: 401k comedy
« Reply #21 on: January 02, 2019, 05:49:27 PM »
I became eligible to join my firm's 401(k) on May 1, 2018. So I set my contribution rate at $2,312 per month in order to max out my contributions for the year (close enough). My December contribution just posted and it was only $816, making my yearly amount only $17,000. I have asked our accounting staff person if this can be fixed but she's not sure it can, though she is looking into it. I'm annoyed! WTF?!?

TexasRunner

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Re: 401k comedy
« Reply #22 on: January 02, 2019, 07:46:51 PM »
I became eligible to join my firm's 401(k) on May 1, 2018. So I set my contribution rate at $2,312 per month in order to max out my contributions for the year (close enough). My December contribution just posted and it was only $816, making my yearly amount only $17,000. I have asked our accounting staff person if this can be fixed but she's not sure it can, though she is looking into it. I'm annoyed! WTF?!?

Sounds like someone hasn't updated the "maximum" rules in a while....  lol

peeps_be_peeping

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Re: 401k comedy
« Reply #23 on: January 03, 2019, 12:31:21 PM »

Sounds like someone hasn't updated the "maximum" rules in a while....  lol

If that's true, then I must be the only person in my firm of ~50 people who had maxed out her 401(k) in the last 6 years...

thesis

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Re: 401k comedy
« Reply #24 on: January 06, 2019, 04:28:28 PM »
Daaaang. Hopefully there is a fix.

Yeah, it's funny how people say it's impossible to max out, which may have lead to the attitude that "we don't have to update this". I can just imagine it being a little value  that gets set for each year in their database! I'm glad that on these forums, loads of people are living proof that it is quite possible, sometimes quite easy to do.

Comedy, for sure. Again, I hope they can fix that.

Dicey

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Re: 401k comedy
« Reply #25 on: January 07, 2019, 11:30:31 AM »
There was uproar at my company because now you have to opt out of the 401k each year, not just when hired. I get that times are tough for the lower earners, but 8% matched dollar for dollar is hard to pass up. Turns out a lot of people do.
That's why they can afford to give an 8% match. Wowza!

TexasRunner

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Re: 401k comedy
« Reply #26 on: January 07, 2019, 11:50:21 AM »
There was uproar at my company because now you have to opt out of the 401k each year, not just when hired. I get that times are tough for the lower earners, but 8% matched dollar for dollar is hard to pass up. Turns out a lot of people do.
That's why they can afford to give an 8% match. Wowza!

Holy crap I missed that the first time!  8% dollar for dollar is the same as an 8% raise.  Holy crap thats good!  I'm jealous over here at 3% with 0.15 cents on the dollar...

patchyfacialhair

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Re: 401k comedy
« Reply #27 on: January 07, 2019, 12:28:18 PM »
There was uproar at my company because now you have to opt out of the 401k each year, not just when hired. I get that times are tough for the lower earners, but 8% matched dollar for dollar is hard to pass up. Turns out a lot of people do.
That's why they can afford to give an 8% match. Wowza!

Holy crap I missed that the first time!  8% dollar for dollar is the same as an 8% raise.  Holy crap thats good!  I'm jealous over here at 3% with 0.15 cents on the dollar...

Yep, very thankful for it, and has certainly helped us speed up our retirement clock when we both had $40k+ student loans to start our careers with!

thebrowze

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Re: 401k comedy
« Reply #28 on: January 07, 2019, 04:02:20 PM »
There was uproar at my company because now you have to opt out of the 401k each year, not just when hired. I get that times are tough for the lower earners, but 8% matched dollar for dollar is hard to pass up. Turns out a lot of people do.
That's why they can afford to give an 8% match. Wowza!

Yeah, I now have first hand experience with this.  We just started a 401k at my company (over 100 employees).  Number that signed up? 13.  With a full match to 3% and then half match to 5%.  And I can count on one hand the number of people who signed up to contribute >$100 per check.  I think we need to start using the line that they are leaving part of their compensation in the company's bank account.

peeps_be_peeping

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Re: 401k comedy
« Reply #29 on: January 07, 2019, 04:18:56 PM »
Daaaang. Hopefully there is a fix.

Yeah, it's funny how people say it's impossible to max out, which may have lead to the attitude that "we don't have to update this". I can just imagine it being a little value  that gets set for each year in their database! I'm glad that on these forums, loads of people are living proof that it is quite possible, sometimes quite easy to do.

Comedy, for sure. Again, I hope they can fix that.

Unfortunately they cannot fix it. An accounting person at my firm mistakenly set my contribution limit at $17,000 back when I signed up in May of 2018. After December 31 there are no backsies. At least this is a problem I'm happy to have - enough money to max out my 401(k) and only missed out on $1,500.

Davey Crockett

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Re: 401k comedy
« Reply #30 on: January 07, 2019, 11:45:22 PM »
There must be more aggressive savers at my company because I received an email today from our HR folks letting everyone know the new 401k contribution limits, and at the end of that message it said once you max out your 401k you can start contributing to the 457b... I thought I was fairly knowledgeable about my retire,ent but I didn't realize my company did a 457b. I wonder why they made it an option only once the 401k is maxed. Currently my wife and I are maxing both of our 401ks as well as her 457b, so I'm not sure I have enough money left over to take advantage, but I thought it was an interesting email, especially since so many people here are getting calls when they elect to withhold 20%. My wife is withholding 48% in her 401k and 457b at the moment - I thought that would raise some eyebrows, but it's too big of a place for anyone to care.

mizzourah2006

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Re: 401k comedy
« Reply #31 on: January 08, 2019, 05:59:30 AM »
My wife runs HR at her company, and most of the folks there are above average to very high earners, and she said besides her and like 4 other people (3 of whom are managing partners), nobody else maxes their 401k contributions.

In my experience most people donít even really know what that means. Iíve asked people in the past and been surprised when they say they do, then Iíve dug a little further each time. Most people think getting the ďmaxĒ match means they are maxing out their 401k.

Mississippi Mudstache

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Re: 401k comedy
« Reply #32 on: January 08, 2019, 01:25:20 PM »
We get a dollar-for-dollar match on the first 8% at work, vested immediately. Small office, only 6 employees (including the owner). Everyone here contributes at least 8%, and I know for a fact that at least half of us max it out. It's nice working with fiscally responsible people...but we are a team of analysts/economists. I know I've heard stories of such people being bad with money, but I don't know any personally.

LetItGrow

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Re: 401k comedy
« Reply #33 on: January 12, 2019, 05:09:22 AM »
My wife runs HR at her company, and most of the folks there are above average to very high earners, and she said besides her and like 4 other people (3 of whom are managing partners), nobody else maxes their 401k contributions.

In my experience most people donít even really know what that means. Iíve asked people in the past and been surprised when they say they do, then Iíve dug a little further each time. Most people think getting the ďmaxĒ match means they are maxing out their 401k.

I've experienced a couple younger coworkers not knowing what the max is also. I can't remember when I first had a 401k in 2000 if I really knew the max amount. I suspect it was there in the literature. I am just glad I started with something. 10% at the time on $55k salary.

Dabnasty

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Re: 401k comedy
« Reply #34 on: January 14, 2019, 07:29:29 AM »
My wife runs HR at her company, and most of the folks there are above average to very high earners, and she said besides her and like 4 other people (3 of whom are managing partners), nobody else maxes their 401k contributions.

In my experience most people donít even really know what that means. Iíve asked people in the past and been surprised when they say they do, then Iíve dug a little further each time. Most people think getting the ďmaxĒ match means they are maxing out their 401k.

I've experienced a couple younger coworkers not knowing what the max is also. I can't remember when I first had a 401k in 2000 if I really knew the max amount. I suspect it was there in the literature. I am just glad I started with something. 10% at the time on $55k salary.

I certainly didn't know anything about a max when I started my first 401k job. I knew to get the match so I signed up for that and I asked around for advice on whether or not I should put more in. Most people said, "not if you want to use it before you're 60". So I stuck with taxable savings for the first couple of years even though I saved enough to max it. Feeling like I was missing out on something I finally did the research and figured it out. Having someone tell me what I was missing out on, even a little hint, would have helped me get there sooner.

Come to think of it, the best advice may have been to just look up any questions I have about investing online. Well meaning, helpful people can still get it completely wrong. And of course use multiple sources because internet people can be wrong too.
« Last Edit: January 14, 2019, 07:48:50 AM by Dabnasty »

Fuzzy Buttons

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Re: 401k comedy
« Reply #35 on: January 15, 2019, 11:40:26 AM »
My company matches 33% of the first 4.5% of your salary.  So, the maximum you can get is 1.5% of your salary if you contribute 4.5%.  It's pretty low. 

But, at least it now arrives in your account with each paycheck.  You can't front-load and be eligible for the match any more, but before 2016 they would pay out your match all at once as late as they could.  That meant October of the following year.  If you left the company for some reason before that, you didn't get anything for the previous year. 

Then for several years in a row around the recession it got to be October and they just said "Sorry, we don't have the money to pay last year's match.  Maybe we will do one for this year.  Next October."

When they had the company meeting announcing the changes to make the match on each paycheck, they started by saying "Up to now, there have been two ways we calculate the 401(k) match."  And I said to the person next to me "Yeah - zilch and bupkiss."

solon

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Re: 401k comedy
« Reply #36 on: January 15, 2019, 11:53:28 AM »
We get a dollar-for-dollar match on the first 8% at work, vested immediately. Small office, only 6 employees (including the owner). Everyone here contributes at least 8%, and I know for a fact that at least half of us max it out. It's nice working with fiscally responsible people...but we are a team of analysts/economists. I know I've heard stories of such people being bad with money, but I don't know any personally.

What type of retirement plan is this? I also work for a small company. The SIMPLE IRA only matches 3%. The 401k is too expensive. Would love to hear more!

Kronsey

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Re: 401k comedy
« Reply #37 on: January 15, 2019, 12:33:20 PM »
We get a dollar-for-dollar match on the first 8% at work, vested immediately. Small office, only 6 employees (including the owner). Everyone here contributes at least 8%, and I know for a fact that at least half of us max it out. It's nice working with fiscally responsible people...but we are a team of analysts/economists. I know I've heard stories of such people being bad with money, but I don't know any personally.

What type of retirement plan is this? I also work for a small company. The SIMPLE IRA only matches 3%. The 401k is too expensive. Would love to hear more!

I'm not Mississippi Mudstache, but thought I would respond. 401Ks don't have to be too expensive. There are many new entrants to the marketplace that make the plans quite affordable. I personally use and recommend www.Guideline.com.

$500 setup fee, and $8/per employee per month, all paid by the employer (zero fees to employees including no advisory AUM fees). Minimum monthly fee of $40 to employer so if you have 5 employees or under you will be paying $40/month.

Outstanding fund selections. Easy company to work with. Like most of these fintech companies, it requires a little more legwork to setup on the business owner's part, but well worth it for the incredible savings opportunities for owners and employees alike.

TexasRunner

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Re: 401k comedy
« Reply #38 on: January 15, 2019, 12:35:04 PM »
Then for several years in a row around the recession it got to be October and they just said "Sorry, we don't have the money to pay last year's match.  Maybe we will do one for this year.  Next October."

...  This is what lawyers are for.

Unless the plan somewhere said "at the Company's discretion".  In which case, that sucks...

solon

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Re: 401k comedy
« Reply #39 on: January 15, 2019, 12:52:23 PM »
We get a dollar-for-dollar match on the first 8% at work, vested immediately. Small office, only 6 employees (including the owner). Everyone here contributes at least 8%, and I know for a fact that at least half of us max it out. It's nice working with fiscally responsible people...but we are a team of analysts/economists. I know I've heard stories of such people being bad with money, but I don't know any personally.

What type of retirement plan is this? I also work for a small company. The SIMPLE IRA only matches 3%. The 401k is too expensive. Would love to hear more!

I'm not Mississippi Mudstache, but thought I would respond. 401Ks don't have to be too expensive. There are many new entrants to the marketplace that make the plans quite affordable. I personally use and recommend www.Guideline.com.

$500 setup fee, and $8/per employee per month, all paid by the employer (zero fees to employees including no advisory AUM fees). Minimum monthly fee of $40 to employer so if you have 5 employees or under you will be paying $40/month.

Outstanding fund selections. Easy company to work with. Like most of these fintech companies, it requires a little more legwork to setup on the business owner's part, but well worth it for the incredible savings opportunities for owners and employees alike.

Wow, that is significantly cheaper than anything else I've seen. Time to talk to the boss...

35andFI

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Re: 401k comedy
« Reply #40 on: January 15, 2019, 01:03:42 PM »
My company allows a maximum after-tax contribution of 25%. Just a little shy of what I was hoping for. Boo!

Funding a Mega Backdoor Roth even though I can't do in-service withdrawals.

catorbe

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Re: 401k comedy
« Reply #41 on: February 12, 2019, 01:54:07 PM »
@Kronsey How many employees is too many for Guideline in your opinion?

Mississippi Mudstache

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Re: 401k comedy
« Reply #42 on: February 12, 2019, 02:00:05 PM »
We get a dollar-for-dollar match on the first 8% at work, vested immediately. Small office, only 6 employees (including the owner). Everyone here contributes at least 8%, and I know for a fact that at least half of us max it out. It's nice working with fiscally responsible people...but we are a team of analysts/economists. I know I've heard stories of such people being bad with money, but I don't know any personally.

What type of retirement plan is this? I also work for a small company. The SIMPLE IRA only matches 3%. The 401k is too expensive. Would love to hear more!

@solon Sorry, I'm just now seeing this. Our plan is a 401k through Vanguard Ascensus. I can't comment on how expensive or difficult it was to set up - the plan was in existence for several years before I came aboard. Fees and investment options are similar to any other plan offered by Vanguard, but I gather that their smaller plans are administered through Ascensus. Hope that helps.

ixtap

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Re: 401k comedy
« Reply #43 on: February 12, 2019, 02:06:57 PM »
There must be more aggressive savers at my company because I received an email today from our HR folks letting everyone know the new 401k contribution limits, and at the end of that message it said once you max out your 401k you can start contributing to the 457b... I thought I was fairly knowledgeable about my retire,ent but I didn't realize my company did a 457b. I wonder why they made it an option only once the 401k is maxed. Currently my wife and I are maxing both of our 401ks as well as her 457b, so I'm not sure I have enough money left over to take advantage, but I thought it was an interesting email, especially since so many people here are getting calls when they elect to withhold 20%. My wife is withholding 48% in her 401k and 457b at the moment - I thought that would raise some eyebrows, but it's too big of a place for anyone to care.

Husband's megacorp sends out a similar email. The open enrollment literature also reminds folks that they can contribute up to half of their cash bonus to their 401k. As I recall, it even mentions after tax contributions, which is how I finally got my husband interested in megabackdoor Roth.

mavendrill

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Re: 401k comedy
« Reply #44 on: February 12, 2019, 09:43:05 PM »
I work in a low-paying field (education), but...
I was new to an employer this last year and I contributed the max.  Got a phone call to verify it of course.
My favorite though, is that as a public institution (charter school), they have to post audit results, which includes a total of employer and employee contribution to 403b.  There are 31 employees there.  There was 27k in employee contributions in 2017 (before I worked there).

I made a comment to the economics teacher, and the personal finance teacher about this being surprising.  Both told me that they could not figure out how to fit contributions into their budgets.

SpacemanSpiff

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Re: 401k comedy
« Reply #45 on: February 14, 2019, 07:36:44 AM »

Sounds like someone hasn't updated the "maximum" rules in a while....  lol

If that's true, then I must be the only person in my firm of ~50 people who had maxed out her 401(k) in the last 6 years...

I used to audit 401k employee benefit plans.  I believe they are required to do a catch up contribution for you so long as you correctly filled out the forms, which it sounds like you did.  If they did not perform this catch up contribution prior to 12/31/18, it will be a bigger PITA for them, but that's not your problem.

Given they probably don't have an audit requirement for their plan (not enough employees for it to be required), they might not be familiar with this issue unless you point it out to them.

catorbe

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Re: 401k comedy
« Reply #46 on: February 14, 2019, 07:47:36 AM »

For those of you with terrible 401k options, have you considered approaching management/ownership with the idea of switching providers?

I was successful at getting the medium fee target date funds swapped out for low fee target date funds. Sent a nice letter with terms like "fiduciary duty".

Just on principle. I don't actually use those funds. I use VIIIX at 0.02% ER.

@TomTX Would you mind sharing the letter if you still have access to it?

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Re: 401k comedy
« Reply #47 on: February 14, 2019, 10:03:37 AM »
I am still working towards being able to max my 401k, thanks to this thread I just remembered to increase my contribution by a similar % as I was just informed my raise would be.

bluebelle

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Re: 401k comedy
« Reply #48 on: February 16, 2019, 09:45:50 AM »
I'm in Canada, so we don't have 401ks, we have group RRSPs and employer match.....the way ours works is that the employer puts in 2% of my salary (including bonus) whether I contribute or not,  but if I contribute 6%, they match that at 65 cents per $ I contribute....so effectively, they put in 5.9% of my salary for my 6% contribution (that's the maximum match - I max out my RRSP outside my group plan - no facepunches necessary).

something f'ed up such that on the last pay of the 2018 and first pay of 2019, the employer match was at something like 2.23% instead of 5.9%....7 weeks later, and they're 'still investigating'.....this is not hard people.....give me my money......make me right, then figure out what you fucked up.

and to add to this, the employer portion for 2018 is labelled my pension adjustment for the 2019 taxation year, meaning that it is subtracted from the yearly maximum contribution amount I'm allowed to contribute.   Tax slips, by law, are to be available by the end of Februrary, so there is some urgency to get this corrected.....

I can't figure out if I'm the only one that had the wrong contribution amount, or the only one that noticed.   I bet if I owed them money they'd have gotten their shit together in January.

TomTX

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Re: 401k comedy
« Reply #49 on: February 17, 2019, 06:12:11 AM »

For those of you with terrible 401k options, have you considered approaching management/ownership with the idea of switching providers?

I was successful at getting the medium fee target date funds swapped out for low fee target date funds. Sent a nice letter with terms like "fiduciary duty".

Just on principle. I don't actually use those funds. I use VIIIX at 0.02% ER.

@TomTX Would you mind sharing the letter if you still have access to it?

IIRC, I had to enter it into their online form - it's not in my sent mail. I was a bit loose with using the term "letter"