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.

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.

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.

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

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.

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.

quote:

Giving I could have put in a buck a week and got $54 per week in free money.

Um, say what?????

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.

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.

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.

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.

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.

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.

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.

Any possibility you can backdate your contributions?

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?

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.

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.

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.

Set up account over weekend. Tomorrows check has company's and my first contributions going in.