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"IBM will match your before-tax and Roth 401(k) savings dollar-for-dollar up to 5% of eligible pay. In addition, IBM will make automatic contributions of 1% of eligible pay to your 401(k) Plus Plan account, even if you do not otherwise participate in the plan."
With many companies, it's not as saying "they match 4%" because it's often more complicated than that. It's not always a 100% match.
For example, this is what my employer's 401K literature says...
"Each pay period you participate in the plan, you’ll receive a matching company contribution of 50% of your contribution, up to 4% of your salary, with an annual maximum company contribution of $2,500"
So for example, if your salary is $50,000, then 4% of your salary is $2000. If you put $2000 in your 401K, the company will contribute $1000. Even if you contribute MORE than 4% of your annual salary, the most they will contribute is $1000 if your salary is $50,000.
In case your curious, in order to get the maximum company contribution of $2500, you'd have to have an annual salary of $125,000 and contribute $5000 (4% of your salary) to your 401K.
With many companies, it's not as saying "they match 4%" because it's often more complicated than that. It's not always a 100% match.
There is also the possibility that matching contributions may vest over time, such as 25% per year. In that case, you would need to be with the employer for 4 years before all matching contributions are yours.
Current employer matches half up to 6%. No pension. Previous employer also matched half up to 6%; pension was available, but the terms changed several times and it was eventually closed to new hires.
There is also the possibility that matching contributions may vest over time, such as 25% per year. In that case, you would need to be with the employer for 4 years before all matching contributions are yours.
Possibility???? More like Probability, I would think.
Sadly, I suspect this is another employee benefit that will be disappearing as the cost of health insurance continues to escalate at frightening speed.
1) A safe harbor contribution of 3% of salary each month, regardless of my own contributions, immediately vested at 100%.
2) A variable annual profit-sharing contribution. The average rate has been about 5% of salary per year. These contributions become fully vested after 5 years of service.
My employer matches 4.5% and it's 100% vested. Other goodies are RSUs and a generous bonus plan, both or which are at the employees discretion for saving.
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