How to factor in ESOP into retirement planning.

[thorbjorn88]

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]

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]

Awesome thanks!

[PDXTabs]

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.