401k company match ? (401k plan, paycheck, job, companies)

[mizzourah2006]

I always thought 100% on your first 6% was the most common for larger companies. Guess I was wrong.

[Lowexpectations]

Originally Posted by mizzourah2006

I always thought 100% on your first 6% was the most common for larger companies. Guess I was wrong.

6% match in in fashion would be well above average and certainly not normal. A match if it exist, the norm would be in a 2-4% range

[mysticaltyger]

Originally Posted by Unsettomati

For my wife's 503b - essentially, a 401k for public education employees - the match maxes out at $500/year. Yeah, so much for those gold-plated benefits for school teachers that we're always hearing about, supposedly bleeding districts white...

But most teachers get defined benefit pensions, which are extremely rare in the private sector...and those pension benefits are expensive. My public sector employer pays 62% on top of my salary toward the pension benefit.

[ctwhitechin]

I work for an insurance company in the defined contribution plan dept, I talk to people all
Day on their plans and help them make wise investment decisions. I probably deal with 50-60 different company plans on a daily basis, best I've seen so far is a dollar for dollar match of 8%. Many companies have no match, most common I've seen is what's called a "safe harbor" match, 100% of the first 3%. Matches can vary as well as vesting schedules. Be happy you are getting a match, as many don't have. Save as much as you can, date funds are good because the automatically adjust to become more conservative as you age.

[Lowexpectations]

Originally Posted by ctwhitechin

I work for an insurance company in the defined contribution plan dept, I talk to people all
Day on their plans and help them make wise investment decisions. I probably deal with 50-60 different company plans on a daily basis, best I've seen so far is a dollar for dollar match of 8%. Many companies have no match, most common I've seen is what's called a "safe harbor" match, 100% of the first 3%. Matches can vary as well as vesting schedules. Be happy you are getting a match, as many don't have. Save as much as you can, date funds are good because the automatically adjust to become more conservative as you age.

Matching 100% of the first 3% isn't a safe harbor match. You would have to make a fixed 3% contribution no matter what the participant did to make sure your safe harbor was intact, this is also called a non elective contribution

[GBR2015]

Originally Posted by Lowexpectations

Matching 100% of the first 3% isn't a safe harbor match. You would have to make a fixed 3% contribution no matter what the participant did to make sure your safe harbor was intact, this is also called a non elective contribution

There is more than one way to qualify as Safe Harbor. The company must match 100% of the 1st 3% or make a fixed contribution of 3%.

[Taiko]

Originally Posted by IDtheftV

Is it typical or just the dividing line between a cheap company and a generous company - rule of thumb? That's what I think 3% is.

There is probably an average number and a median number and for those numbers, there is an average and median by population of workers and for the population of companies.

I consider 2.9% to be cheap and 3.1% to be generous, but I don't know what's "typical." It could very well be that 2.5% is above average.

Like Lacerta said above, these numbers are just for the ones that offer a 401k. Lots of places don't have a plan at all.

Cheap or generous isn't the real issue. There are two factors. First provide enough so that lower wage earners will participate which then leads to the second. With the plan now qualified provide enough to recruit better people at the higher wage levels.

[Lowexpectations]

Originally Posted by GBR2015

There is more than one way to qualify as Safe Harbor. The company must match 100% of the 1st 3% or make a fixed contribution of 3%.

If your first scenario is true why would the second even need to exist? I'm not sure the first qualifies

[IDtheftV]

Originally Posted by Taiko

Cheap or generous isn't the real issue.

No, it's the question.

People consider 3% to be fair and adequate.

The question is whether 3% is above or below average.

.... OK really it is _A_ question.

The other question is whether 3% is above or below median.

I searched the issue and couldn't find an answer. I only found a bunch of crap explaining what I already know; how it works.

Originally Posted by Taiko

First provide enough so that lower wage earners will participate ...

This doesn't make any sense.

If a "lower wage earner" won't participate at 3%, how does 5% give them any incentive to participate? What do "low wages" have to do with anything?

Free money is free money. All my professional life, I have encountered people who have made great money and preferred to just go out and buy new toys.

[Taiko]

Wages matter because congress did not want only "the rich" to get the tax breaks , which those at a high tax bracket would take without the employers providing matching funds. The matching funds are there to entice those in the lower tax brackets to participate thus making the plan legal