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titan22 · 11-15-2006, 04:07 PM

There are several things to look for in a 401(k) that your company may offer. I will try to keep it simple because i know how complex finance and retirement plans can be.

#1. You should get a level and equal contribution equal to at least 6% of your gross annual pay. Often smaller companies will offer 3% but if you or your job is in high demand, you can be rewarded with up to a 10% matched contribution. Assuming you make $100,000/year, that is $10,000 free dollars as an incentive. It will reduce your taxable income and you will pay less taxes each year. Awesome benefit.

#2. Your plan should offer at least a dozen mutual funds. You might want to invest in only three or four at any one time, perhaps only one, but there must be a broad range of conservative and aggressive options for people of differant ages and situations.

#3. Some of those options should be life-cycle funds, which automatically move to more conservative holdings as the employee ages. Thesea re good for employees who don't want to manage their accounts themsleves.

#4. Fees, such as "expense ratios" charged by the funds, should be very low, definitely less than 1%/year. Many index-style funds, which try to match the performance of given stock gauges such as teh Standard & Poors 500, charge just .2 percent.

#5. The plan should provide easy-to-understand quarterly and annual statements that show how ywell your individual holdings and portfolio as a whole are doing compared with appropriate market benchmarks.

#6. Your plan should offer good education and advice. To legally offer a 401(k) a company must give annual education to it's 401(k) holders. Educations means generic information such as how to divide your holdings among stocks and bonds based on your age.

Good companies offer good benefits. Take advantage of what your company has to offer. It will work out to your advantage and you will be happy you did when you get that first quarterly statement.

briansol · 11-15-2006, 06:09 PM

I had 3 days to get mine together, and I just didn't have time, so I skipped out this year. Probably stupid of me, but I didn't have time to properly research where to put my money.

My company is very small (12 employees) and they match 2%
So, i missed out on 1400 bucks or so from the match, but my 1400 that i would have to put in is in my pocket instead of on un-educated guesses.

Next year I hope I'll have more time to get my paper work in and have time to actually sit down and go over things with the people here and hopefully make some smart choices.

11-15-2006, 04:07 PM	#1
titan22 Super Moderator Join Date: Aug 2006 Location: West Coast Posts: 773 Rep Power: 7	6 Things to look for in a company's 401(k) There are several things to look for in a 401(k) that your company may offer. I will try to keep it simple because i know how complex finance and retirement plans can be. #1. You should get a level and equal contribution equal to at least 6% of your gross annual pay. Often smaller companies will offer 3% but if you or your job is in high demand, you can be rewarded with up to a 10% matched contribution. Assuming you make $100,000/year, that is $10,000 free dollars as an incentive. It will reduce your taxable income and you will pay less taxes each year. Awesome benefit. #2. Your plan should offer at least a dozen mutual funds. You might want to invest in only three or four at any one time, perhaps only one, but there must be a broad range of conservative and aggressive options for people of differant ages and situations. #3. Some of those options should be life-cycle funds, which automatically move to more conservative holdings as the employee ages. Thesea re good for employees who don't want to manage their accounts themsleves. #4. Fees, such as "expense ratios" charged by the funds, should be very low, definitely less than 1%/year. Many index-style funds, which try to match the performance of given stock gauges such as teh Standard & Poors 500, charge just .2 percent. #5. The plan should provide easy-to-understand quarterly and annual statements that show how ywell your individual holdings and portfolio as a whole are doing compared with appropriate market benchmarks. #6. Your plan should offer good education and advice. To legally offer a 401(k) a company must give annual education to it's 401(k) holders. Educations means generic information such as how to divide your holdings among stocks and bonds based on your age. Good companies offer good benefits. Take advantage of what your company has to offer. It will work out to your advantage and you will be happy you did when you get that first quarterly statement.

11-15-2006, 06:09 PM	#2
briansol Savings Advisor Join Date: Aug 2006 Location: Central CT Age: 31 Posts: 761 Rep Power: 7	I had 3 days to get mine together, and I just didn't have time, so I skipped out this year. Probably stupid of me, but I didn't have time to properly research where to put my money. My company is very small (12 employees) and they match 2% So, i missed out on 1400 bucks or so from the match, but my 1400 that i would have to put in is in my pocket instead of on un-educated guesses. Next year I hope I'll have more time to get my paper work in and have time to actually sit down and go over things with the people here and hopefully make some smart choices.

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