Saturday, April 12, 2008

401K - Please Be Down

If you saw my fb status a few days ago, you know that as of April 1st, I'm 100% vested in my company match in my 401K. Let's take a moment and just do a little shout for that...


Ok, so I was opening up the mail and turns out my company did really well in 2007, so they're going to increase the amount of money they give me in the company match in my 401K by 8%.


By the numbers:

I'm gonna use round numbers to explain how my company does it:

They match me for 50% of my contribution up to 6% of my income. So if I put in 6% of my income, they put in 3% of my income.

So let's just say my contribution of 6%=$1,000, they add $500 just because.

Well this year, now they're adding 8% of my 6% to the 3% they gave me.

Again pretending my 6%=$1,000

So if I put in $1,000, the company gives me $500 for no reason, then another $80 because they had a good year.

The catch is that I HAD to have put money in the 401K during 2007 for the benefit to include me. I DID. Boy, am I happy. *Doing a dance singing FREE MONEY, FREE MONEY*

So, here's my public service announcement: If your company offers a 401K or 403B JOIN RIGHT NOW. You may be thinking I can't afford to, but I guarantee you, you can't afford NOT to. (I didn't even speak on the loveliness that is compounded interest, excuse me while I shout all over my apartment)

1 comment:

Brown Girl Gumbo said...

I joined my company's 401K program when I first started 4 years ago - I'm not vested completely yet though.

I tell everybody to do the same - you'd be a fool not to!