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Ammoholic
Picture of Skins2881
posted
Was talking to the boss today and asked about 401(k). I have been eligible for two years to set it up, but I have been hell bent on becoming debt free (minus mortgage) and throwing every extra penny towards that goal.

I asked him about the match which I knew was 4%. I asked if it was dollar for dollar or 50% match up to 4%. He said neither, just participate and I get 4%.

FUCK!!!!

That is $5600 in free money that I gave up, which would likely have been closer to $7-8,000 with growth. All I had to do was set it up and contribute a buck a week.

Got way to smart for myself in my mad dash to pay off debt. Off to put on my dunce cap and sit in the corner for a while.



Jesse

A couple SIGs and a few others
 
Posts: 10686 | Location: Loudoun County, Virginia | Registered: December 27, 2014Reply With QuoteReport This Post
His Royal Hiney
Picture of Rey HRH
posted Hide Post
Don't look back.

On the other hand, let this be a lesson for the future to look at things all together and not just focus on the monkey on your back.

Sometimes, people may still decide to forego the free money just to get that monkey off your back sooner. But at least you make yourself aware of all your options and the give and takes of each one.



"It did not really matter what we expected from life, but rather what life expected from us. We needed to stop asking about the meaning of life, and instead to think of ourselves as those who were being questioned by life – daily and hourly. Our answer must consist not in talk and meditation, but in right action and in right conduct. Life ultimately means taking the responsibility to find the right answer to its problems and to fulfill the tasks which it constantly sets for each individual." Viktor Frankl, Man's Search for Meaning, 1946.
 
Posts: 13922 | Location: Bay Area, CA | Registered: March 24, 2011Reply With QuoteReport This Post
Ammoholic
Picture of Skins2881
posted Hide Post
quote:
Originally posted by Rey HRH:
Don't look back.

On the other hand, let this be a lesson for the future to look at things all together and not just focus on the monkey on your back.

Sometimes, people may still decide to forego the free money just to get that monkey off your back sooner. But at least you make yourself aware of all your options and the give and takes of each one.


I understand this completely. I actually used to work as a financial planner and tried to walk people back off the edge on this. If return - interest equals positive then you take the investment. Giving I could have put in a buck a week and got $54 per week in free money. There is no interest rate or likely potential loss in market that would have offset not joining the plan.

I failed myself big time here. I have a degree in finance, spent five years as a financial planner, and am extremely good at math. I should have never made this mistake and I should have asked long ago how the match worked. I assumed it was dollar for dollar, wrongly.

PS the interest rates on my remaining three debts are 5.99%, .99%, and 0% with a weighted average around 2.3% APR. So stupid, stupid, stupid move.



Jesse

A couple SIGs and a few others
 
Posts: 10686 | Location: Loudoun County, Virginia | Registered: December 27, 2014Reply With QuoteReport This Post
Crusty old
curmudgeon
Picture of Jimbo54
posted Hide Post
When my employer (I'm now retired) offered 3% match and a second 3% at 50% match I jumped on it. Amazingly very few others did at the time. A real head scratcher.

That free money turned into many thousands of dollars toward our now comfortable retirement.

As Rey said, "don't look back" and start taking it today. Funny thing about the past, you can't change it but you can learn from it.

My point is that you are not the only one to make this mistake. Don't beat yourself up over it.

Jim


________________________

"If you can't be a good example, then you'll have to be a horrible warning" -Catherine Aird
 
Posts: 6145 | Location: The right side of Washington State | Registered: September 14, 2008Reply With QuoteReport This Post
Member
Picture of jbcummings
posted Hide Post
Yeah, don’t look back, just get onboard.
My last full time/non contract job did 100% or dollar per dollar with a 6.5% limit. You need to get on board stuff like that.


________________
"Qui desiderat pacem, bellum praeparat; nemo provocare ne offendere audet quem intelliget superiorem esse pugnaturem".
(Whosoever desires peace prepares for war; no one provokes, nor dares to offend, those who they know to be superior in battle.)
-- Flavius Vegetius Renatus,
 
Posts: 3610 | Location: N. Texas | Registered: May 21, 2012Reply With QuoteReport This Post
Member
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My mom use to work for a large corp that would give you a free share of their stock if you bought 2, and you could do this monthly. Had to hold it for a year. So basically you put $80 of your money in and they give you $40 more. She was one of the few who participated in this program.

"Hey, how about we give you $480 a year?"

"No" was the usual response. That was different than yours of course, you clearly get it.
 
Posts: 1109 | Registered: August 01, 2012Reply With QuoteReport This Post
Dances With
Tornados
posted Hide Post
quote:
Giving I could have put in a buck a week and got $54 per week in free money.


Um, say what?????
 
Posts: 7006 | Registered: October 26, 2009Reply With QuoteReport This Post
Proud member of
the vanning collective
Picture of Black92LX
posted Hide Post
quote:
Originally posted by jbcummings:
Yeah, don’t look back, just get onboard.
My last full time/non contract job did 100% or dollar per dollar with a 6.5% limit. You need to get on board stuff like that.


Wife’s last employer matched 2 to 1 up to 10%.
That account is awesome we had no kids at the time and loaded that beast.

2 to 1 is almost unheard of. My wife’s mother has worked for that employer for nearly 34 years and the 2 to 1 match has been there almost the entire time.


--------------------------------------
Life can only be understood backwards; but it must be lived forwards.
Soren Kierkegaard
 
Posts: 18624 | Registered: September 06, 2003Reply With QuoteReport This Post
eh-TEE-oh-clez
Picture of Aeteocles
posted Hide Post
quote:
Originally posted by OKCGene:
quote:
Giving I could have put in a buck a week and got $54 per week in free money.


Um, say what?????


My employer does this. Rather than doing a dollar for dollar match, my employer gives a straight 3% to every participant. So long as you participate ($1 a pay period), you get 3% of your pay kicked back to you into your 401(k).

Anyway, advice to others: Always take the employer match before paying down debt. An employer match is a 100% return in the year you made the contribution, and worth much much more compounded over time. Even if you had a high interest credit card at 22%, getting the employer match still makes the most sense.
 
Posts: 9978 | Location: Orange County, California | Registered: May 19, 2002Reply With QuoteReport This Post
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Picture of lkdr1989
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My company used to do the 3% whether you participated or not, then about 5 years ago, they instituted dollar for dollar-matching up to 8% of your pay. They stopped the 3% contribution to save money.




...let him who has no sword sell his robe and buy one. Luke 22:35-36 NAV

"Behold, I send you out as sheep in the midst of wolves; so be shrewd as serpents and innocent as doves." Matthew 10:16 NASV
 
Posts: 2684 | Location: Valley, Oregon | Registered: June 03, 2010Reply With QuoteReport This Post
Drill Here, Drill Now
Picture of tatortodd
posted Hide Post
It’s even more unfathomable than that at my place. You can put in money post tax and company will match it 1:1 tax protected. If you really need the money you can pull your post tax money 2x per year. We still have people that pass up the free money.



Ego is the anesthesia that deadens the pain of stupidity

DISCLAIMER: These are the author's own personal views and do not represent the views of the author's employer.
 
Posts: 15150 | Location: N. Houston, TX | Registered: November 14, 2005Reply With QuoteReport This Post
Proud member of
the vanning collective
Picture of Black92LX
posted Hide Post
quote:
Originally posted by lkdr1989:
My company used to do the 3% whether you participated or not, then about 5 years ago, they instituted dollar for dollar-matching up to 8% of your pay. They stopped the 3% contribution to save money.


Because lots of people forgoe saving for retirement to have the money right now. Especially the current generation.
The company is likely saving a substantial amount.


--------------------------------------
Life can only be understood backwards; but it must be lived forwards.
Soren Kierkegaard
 
Posts: 18624 | Registered: September 06, 2003Reply With QuoteReport This Post
Dances With
Tornados
posted Hide Post
Well that's interesting. I've never seen or heard of it being done that way, I've always had the percentage match way. I guess when I first read your post I thought WOW so if you get that much match on $1, can you contribute $100 and $5,400 ?
Do you get a match for $1.00 only? If so, wow what a free gold mine.

I've always believed employer match contributions were terrific, why would anyone turn down free money!? And yet, many people don't enroll and get the benefit. No offense or disrespect meant.
 
Posts: 7006 | Registered: October 26, 2009Reply With QuoteReport This Post
Ammoholic
Picture of Skins2881
posted Hide Post
quote:
Originally posted by OKCGene:
Well that's interesting. I've never seen or heard of it being done that way, I've always had the percentage match way. I guess when I first read your post I thought WOW so if you get that much match on $1, can you contribute $100 and $5,400 ?
Do you get a match for $1.00 only? If so, wow what a free gold mine.

I've always believed employer match contributions were terrific, why would anyone turn down free money!? And yet, many people don't enroll and get the benefit. No offense or disrespect meant.


Fiancée's works the same, they give her 4% as long as she participates. No matter if we contribute a buck or max it out, still the same 4% match.

So my buck a week would have given me $54 or a whopping 5,400% ROI.

Had I invested that $5,600 at 9% return for 30 years, I just cost my self a little over $70,000 in retirement.

Stupid, stupid, stupid.



Jesse

A couple SIGs and a few others
 
Posts: 10686 | Location: Loudoun County, Virginia | Registered: December 27, 2014Reply With QuoteReport This Post
Member
Picture of EasyFire
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Any possibility you can backdate your contributions?
 
Posts: 967 | Location: Colorado | Registered: December 14, 2008Reply With QuoteReport This Post
Music's over turn
out the lights
Picture of David W
posted Hide Post
I had a cousin who had a job and they would match something stupid high like 15%+ and guess how much he was putting in?


David W.

Rather fail with honor than succeed by fraud. -Sophocles
 
Posts: 2863 | Location: Winston-Salem, N.C. | Registered: May 30, 2005Reply With QuoteReport This Post
Three Generations
of Service
Picture of PHPaul
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I started waaaaay too late, but once I wised up, I beat it to death.

My last job that offered matching, I was making more money hourly than I'd ever made in my life and I was POUNDING the 401K for all it was worth.

When that job ended, I rolled it all into my IRA because that's an interest-bearing CD and I'm a chickenshit, zero risk tolerance kind of guy.
 
Posts: 10125 | Location: Downeast Maine | Registered: March 10, 2010Reply With QuoteReport This Post
Member
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My job does a match for match up to 3%, and its before tax income. 3% of roughly 3000 every month doesnt seem like much, but when you add the 3% from employer, and the fact I'm in my 20's, I'm happy I could start now. I think my math may be bad but I get about 180 every month from it. I can't remember what I did with it since then, its like a 401a and a 457.


I am Groot
 
Posts: 501 | Location: North Ga | Registered: August 06, 2016Reply With QuoteReport This Post
Don't Panic
Picture of joel9507
posted Hide Post
quote:
I am a complete moron....

Not really. A complete moron would have spent that money on some shiny object. Paying down debt, at least you have something to show for it.

So, did you miss a trick? Yeah. But you learned - never make assumptions when it comes to compensation details.

Sounds like you have 30 years till retirement. I would wager the value of that lesson over 30 years will probably dwarf the expected return on the foregone match money.
 
Posts: 11769 | Location: North Carolina | Registered: October 15, 2007Reply With QuoteReport This Post
Ammoholic
Picture of Skins2881
posted Hide Post
Set up account over weekend. Tomorrows check has company's and my first contributions going in.



Jesse

A couple SIGs and a few others
 
Posts: 10686 | Location: Loudoun County, Virginia | Registered: December 27, 2014Reply With QuoteReport This Post
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