Author Topic: How to factor in ESOP into retirement planning.  (Read 386 times)

thorbjorn88

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How to factor in ESOP into retirement planning.
« on: March 20, 2017, 04:31:36 PM »
I'm just leaving college with a master's in electrical engineering and $9,212.13 in student debt (not perfect but MUCH better than many of my classmates.) I'm starting a job in June at an employee owned company that has an ESOP. They match 4% into my 401k, provide up to 5% discretionary into the 401k (I'm told it's been 10 years since it was less than 5%) and they put 9% into the ESOP. I'm starting out 100% vested. My question is how do I factor in the ESOP into my retirement planning? How do I find out what kind of interest rate it has averaged historically?

eudaimonia

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Re: How to factor in ESOP into retirement planning.
« Reply #1 on: March 20, 2017, 05:40:27 PM »
The key question you'll need to ask your employer is what is the ESOP invested in? Typically ERISA laws dictate a high fiduciary care of ESOP accounts. For the company I work for, our ESOP dictates that the funds are put into a low cost set of well diversified index funds as well as some company stock (about 20%). So rates of return for our ESOP are comparable to a balanced 60/40 stock/bonds account over all. For your company it will depend on what the ESOP invests in.

thorbjorn88

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Re: How to factor in ESOP into retirement planning.
« Reply #2 on: March 20, 2017, 07:49:58 PM »
Awesome thanks!

PDXTabs

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Re: How to factor in ESOP into retirement planning.
« Reply #3 on: March 20, 2017, 09:50:57 PM »
I've only worked one place with an ESOP and 100% of the ESOP was company stock that I couldn't sell until I was 55 or left the company.