Employer contributions...

[TheHaitian]

Do you ever re-evaluate your savings to include your employer contributions and what not?

Ex: between my wife and I our employers contributed ~10k to wards our retirement/HSA account this year.

Not a small amount when you think about it some people are not able financially to put away 10k/year towards retirement and we get that from our employers.

Next year I am even considering switching to their HMO and get $1,500 towards the HSA vs the $500 my job offers.

And 10k at 11% over 30 years comes to $267,080.97... off course my wife job is the true MVP offering 10% match 🤗🤗🤗

[chapeau]

The 403b match is about the only thing I miss from my old job. They put in 1.5% for each 1% I put in, up to 7.5%. For a while between their contribution and mine I was putting away well over 25% of my salary.
My current job used to offer a pension (ok, still does, until Monday night). After Monday it’s 1.5% match if I switch from the pension to the 401k. I still have 6 years, 6 months, and 11 days until I’m vested in the pension, though (but who’s counting? I’m not sure if my bank account or my mental health can stay in this job that long).

[TheHaitian]

Dec 28, 2018 20:29:52 GMT -5 chapeau said:

The 403b match is about the only thing I miss from my old job. They put in 1.5% for each 1% I put in, up to 7.5%. For a while between their contribution and mine I was putting away well over 25% of my salary.
My current job used to offer a pension (ok, still does, until Monday night). After Monday it’s 1.5% match if I switch from the pension to the 401k. I still have 6 years, 6 months, and 11 days until I’m vested in the pension, though (but who’s counting? I’m not sure if my bank account or my mental health can stay in this job that long).

Yeah mine is only 4%... not complaining since I have met folks that get nothing or only 2%....

Besides salary that is definitely something to consider on my next job search because I can see the difference it makes in my wife contributions...

And the more you make, the more they contribute

ETA : good luck with the job and holding on till the pension vest!

[phil5185]

And 10k at 11% over 30 years comes to $267,080.97...

From the Phil Box - $10k/yr @ 11%/ann. for 30 years: $2,209,131.74

[TheHaitian]

Dec 28, 2018 22:01:44 GMT -5 phil5185 said:

And 10k at 11% over 30 years comes to $267,080.97...

From the Phil Box - $10k/yr @ 11%/ann. for 30 years: $2,209,131.74

Yes but :
A) there is no guarantee we will both be at our current jobs for the next ~30 years
B) even if we are there is no guarantee our jobs will continue offering such benefits
C) no guarantee our future jobs will match similar contributions.

So it was easier to do a one time contribution of 10k and the value in 30 years, because the 10k for 2018 in seating in our accounts, it is ours already... no if’s or but’s about it.

ETA : but yes it is a good way to emphasize that people should contribute to their 401k or 403b’s at least to get the full matching funds because over 30 years that is a lot of money you are leaving on the table.

[tcu2003]

DH and I have somewhere between $11-12k deposited in our 401ks each year between 401k matches and profit sharing (total, not each). I don’t reevaluate or change our forecasts based on employer contributions. We’re each fully vested, so it’s included in our net worth calculations once the money hits our 401k accounts, but that’s it.

[Deleted]

I don't account for employer contributions until they are part of my account balance.  I get a 4% match and it's usually only about $1500/year, but currently it accounts for 29K of my 140K 401K balance, so even a small match adds up over time.   

[phil5185]

A) there is no guarantee we will both be at our current jobs for the next ~30 years
B) even if we are there is no guarantee our jobs will continue offering such benefits
C) no guarantee our future jobs will match similar contributions.

I'm pretty sure that if I had waited for guarantees before I did anything, I would still be waiting and I would have way less wealth.

[Deleted]

My employer kicks in about 25k from their defined contribution plans, I have one retirement projection assuming I work there the next 17 years and I also have another projection assuming I lose this job and get something nowhere near as good.

[alabamagal]

My employer contributed almost $13k to my 401k last year. They contribute 2 portions, the first is 6% of salary ( in lieu of a retirement plan) and then a match of 4% if employee contributes 6%. So I essentially get 10% of salary for a 6% contribution.

My retirement plan is based largely on my previous employer pension and social security income. Pension has to start at 65. SS I plan to wait as long as possible. Current job is to get me to 65 so retirement savings are a bonus.

Now to just work on keeping my job.....

[tractor]

I get a 5% match from my employer, so by putting 10% of my salary in, I’m saving 15% each year. This is on top on my pension, which my employer also funds @ 15% of my salary. That’s why I look at people like they’re nuts when they ask if I like my job (and why most bail after 30 years because the retirement $ is so good if you stay put).

Even with that, some people still don’t participate in the 401K, I wish the company would publish a list of non-participating people so the rest of us could set them straight.

[TheHaitian]

Dec 29, 2018 11:12:45 GMT -5 @aj said:

My employer kicks in about 25k from their defined contribution plans, I have one retirement projection assuming I work there the next 17 years and I also have another projection assuming I lose this job and get something nowhere near as good.

HOLY SHIT!!! 😱😱😱😱

Can you get me hired by your job?

[Cookies Galore]

I don't get a contribution to my 403b since our pension is 100% employer-funded. Based on salary through 2017, I would get $3,000/month come retirement age from the pension. So it's kind of important.

[Rukh O'Rorke]

New job has 4% contribution whether you participate or not, 3% matching on your (6%??) contribution.

Only after 1 year, vested after 3.

so not getting anything presently, so not counting on it......

Previous employer did no matching, had a cruddy ESOP they seem trying to weasel out of.....

[Rukh O'Rorke]

Dec 29, 2018 9:48:56 GMT -5 phil5185 said:

A) there is no guarantee we will both be at our current jobs for the next ~30 years
B) even if we are there is no guarantee our jobs will continue offering such benefits
C) no guarantee our future jobs will match similar contributions.

I'm pretty sure that if I had waited for guarantees before I did anything, I would still be waiting and I would have way less wealth.

I can't see how this comment applies - they are currently taking advantage of these contributions - they are not waiting on guarantees

Not counting on them indefinitely is only prudent.

[flamingo]

My current job contributes 6%. I can then contribute 6% into my 401k. I also put 10% into a 457b account. Or, you have the option to be part of their pension system, but I don’t plan to retire from this job.  

This is the lowest employer contribution of any job I’ve worked. My previous job contributed 8% if I contributed at least 5%. The employer before that contributed 9% if I contributed at least 5%. On the other hand, I am making so much more at this job than my previous 2 jobs, so it’s about the same dollar amount wise.

[Deleted]

Dec 29, 2018 13:37:01 GMT -5 TheHaitian said:

Dec 29, 2018 11:12:45 GMT -5 @aj said:

My employer kicks in about 25k from their defined contribution plans, I have one retirement projection assuming I work there the next 17 years and I also have another projection assuming I lose this job and get something nowhere near as good.

HOLY SHIT!!! 😱😱😱😱

Can you get me hired by your job?

It’s graduated vesting so I’m 3 of 6 years in to get full amount, not many companies offer defined contribution pensions anymore.

[Deleted]

A previous employer (2006-2012) matched 100% of the first 6% and if you joined after they closed the pension plan to new entrants you got another 6% even if you didn't put a dime in the 401(k).  And that, my friends, is the class act way to terminate a pension plan.  So, I put in $1, they put in $2.  Yes, I DID count that in my projections.

[❤ mollymouser ❤]

My wonderful DH is active duty military, and does not get any sort of employer match for the Thrift Savings Plan. He does, however, qualify for a military pension ~ and we definitely count THAT.

[Miss Tequila]

Dec 29, 2018 15:08:35 GMT -5 @aj said:

Dec 29, 2018 13:37:01 GMT -5 TheHaitian said:

HOLY SHIT!!! 😱😱😱😱

Can you get me hired by your job?

It’s graduated vesting so I’m 3 of 6 years in to get full amount, not many companies offer defined contribution pensions anymore.

Most companies offer defined contribution plans. Most do not offer defined benefit plans

[Miss Tequila]

I do not count my future employer contributions in my calculations. I currently get 100% match on the first 6% that I contribute. I can switch employers (and am) at any time so I don’t want to inflate my projections.

[Deleted]

Dec 30, 2018 9:22:14 GMT -5 Miss Tequila said:

Dec 29, 2018 15:08:35 GMT -5 @aj said:

It’s graduated vesting so I’m 3 of 6 years in to get full amount, not many companies offer defined contribution pensions anymore.

Most companies offer defined contribution plans. Most do not offer defined benefit plans

I didn’t say defined contributions, I said defined contribution pensions.

[giramomma]

14.something % of my pay goes towards my pension, equally split between myself and my employer.

I count the cash value if I separate in the money I have for retirement.

I won't fully count on my pension fully until I retire. I do think I'm getting close enough to retirement now (13 years), that if they take away our pensions..I'll be grandfathered into the program. My retirement is likely safe for another 4 years. Then we'll see how the political/economic winds blow. 

[ners]

When I started there was a 4% match immediately  vested if you contributed 4%.

It was dropped to .25%

It was then raised to 2%.  I do not see this increasing any time soon as they have been slowly cutting benefits.  There is no employer contribution to our health savings account and they stopped the wellness program.

[SVT]

I get around $40k per year from my FT job in employer contributions to retirement.  I don't make any changes based on employer contributions.  I always still max all retirement accounts myself because of the tax advantages.  And once the employer contributions hit my account, it gets added to my net worth.  I don't make any decisions on changing anything based on employer contributions.

[Tiny]

Dec 29, 2018 13:40:07 GMT -5 Cookies Galore said:

I don't get a contribution to my 403b since our pension is 100% employer-funded. Based on salary through 2017, I would get $3,000/month come retirement age from the pension. So it's kind of important.

    for me too... except it's a 401K plan.    

To the topic in the OP,  when I first started working for my employer - I didn't really think much about the pension plan - as I had a hard time imagining I'd stay long enough for it to make much of a difference.  So, I focused on the 401(k) (and the pre tax-y ness  of it  as I didn't have any other way for 'tax savings' - I'm single no kids.         

Now that I've been employed for so long - I'm seeing how totally amazing my employers pension plan is (especially if I don't take take it until I'm 65 (ten years from now) - even if I quit tomorrow).     It's making me reconsider how much I'm saving in my 401K pre-tax.   I'm thinking I'd like to have more post tax money saved (and give up some of the pretax saving thing).      I'd like to be able to work less before I'm 65  (aka FIRE at or before 59.5). 


FWIW:  I do  take into consideration my employer's benefits (the pension, the amount they pay/contribute towards my health care, transportation, other perks, their choice of 401K management company/and funds available) when I look at my overall "compensation".    It's not all just about 'salary'.       

[giramomma]

Jan 2, 2019 12:33:40 GMT -5 Tiny said:

FWIW:  I do  take into consideration my employer's benefits (the pension, the amount they pay/contribute towards my health care, transportation, other perks, their choice of 401K management company/and funds available) when I look at my overall "compensation".    It's not all just about 'salary'.       

I take my work benefits into account as well.

But, it's happened that private sector employers have welched on pensions.

Our state lawmakers have spent money (we don't have) doing studies to see if it's better for them to get of the pension and go to a strictly 403b retirement plan for the past two budget cycles.

So, in terms of my pension, I treat it like I treat SS. I'll believe it when I have my money in my account. 

I'm jaded. No one (ie employers) cares on iota about employees. So, I'll trust myself, thanks. Which, unfortunately, is why we are hitting overkill for retirement. If you include what we're saving, on top of what my employer is putting towards my pension, it's very close to 30% of our gross.

[movingforward]

Yes, I count it in my projections. My employer contributes 7%. It doesn't matter if the employee contributes or not. You are fully vested from the first contribution (though you have to wait 3 years before they start contributing). 7% of my salary is a good chunk of money each year. I think it would be foolish not to count it in my projections.

[haapai]

Every once in a while I get tempted to add the employer 401(k) match (2%) and the automatic (2%) contribution that I got for getting frozen out of the pension to my own 401(k) contribution (18%) and tell myself that I'm saving 22%.  

My bad math alarm goes off every time that I try it.  Something inside won't let me add apples and oranges like that.  I know on some level my contributions to my tradition 401(k) are slightly higher than 22% of my gross pay, but I've never gotten geeky enough to calculate the exact percentage.  (Everything vests immediately, so there's no issue there.)

I think that the reason for this is if I calculate that first slightly happier number, I will then be honor-bound to calculate what percentage of total compensation I am socking away.   Dividing my total 401(k) contributions by my gross pay + health insurance subsidy + employer contributions to my 401(k) + any other goodies probably yields a sickening percentage somewhere in the teens.  I've never been brave enough to calculate it. 

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[jeffreymo]

I account for employer contributions when I forecast out. I’ve been fortunate that the 3 different plans I’ve been a part of have never reduced or eliminated the employer match. So I have a 21 year track record of receiving a minimum of 4% from my employer (employer 1 - 4.5%, employer 2- 4.5%+discretionary, employer 3 - 4%).

I don’t really look at it in terms of an overall contribution percentage.

Also, with any forecasting, you have to make assumptions and any variable can end up changing. I could lose the company match just as easily I could choose to reduce my contribution percentage.