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Recent News and Articles on the Keywords: 401k + match + company  Related to the article below (Last Update: 8/4/2008)

When 401(k) Investing Goes Bad
Wall Street Journal - Aug 3, 2008
As for the state's 7.5% contribution, it is more generous than in the average private-sector 401(k), where the most common fixed match is 50 cents per ...
401(k)s In Danger
Motley Fool - Aug 1, 2008
We've long urged Fools to take advantage of any company matching funds available, because it's free money. It's there for the taking, if you just do what ...
Vesting Rules for 401(k) Match Affect Contributions
Wall Street Journal - Jul 12, 2008
By KELLY GREENE For the last 18 months, I have been contributing 6% of my salary to a 401(k) plan with a 50% company match. The funds are deposited to my ...
Grant County PUD commission: The candidates
The Wenatchee World Online, WA -
Competitive pay, health benefits, 401K with company match. Contact Mark at (208)790-1098 or email at markh@colemanoil.com EOE Permit Coordinator Due to an ...
How to tell if your 401(k) is living up to the best standards
MarketWatch - Jul 30, 2008
Sometimes, she says, it's more important to look at the total dollars the company is matching rather than the percent. Lisa Arko at Watson Wyatt says the ...
Short sale of home hurts credit scores
Los Angeles Times, CA - Aug 3, 2008
If you have a 401(k) at work, take advantage of it. Contribute at least enough to get the full company match, if one is offered. If your employer limits how ...
What to Do About a Lousy 401(k) Plan
U.S. News & World Report, DC - Jul 29, 2008
Your company doesn't provide matching contributions. "Chances are you can find better investment alternatives with fewer restrictions by investing in an IRA ...
Eliminating 401(k) Matches Might Actually Be a Savings Boon
FOXBusiness - Jul 17, 2008
For instance, seven in 10 companies surveyed recently by Hewitt Associates said they don't plan to make any changes to their company match and just 12% said ...
Double Jeopardy
ILW.com, NY -
Collegial atmosphere, 401k, health and dental. Opportunity to work directly with partners and train junior paralegal staff on sophisticated corporate and ...
HR/Payroll Assistant
Seattle Times, United States - Jul 31, 2008
This position is an incremental part of this company. We offer competitive benefits package including M/D/V life insurance, 401K with company match and a ...
Source: Google News

Excessive Extrapolation and the Allocation of 401 (k) Accounts to Company Stock -
S Benartzi - The Journal of Finance, 2001 - Blackwell Synergy
... however, the most common one for 401k!-type plans ... Excessive Extrapolation and the
Allocation of 401(k) Accounts 1751 ... allocation to company stock by match type. ...

401 (k) matching contributions in company stock: Costs and benefits for firms and workers -
JR Brown, N Liang, S Weisbenner - Journal of Public Economics, 2006 - Elsevier
... and employee inertia (Choi et al., 2001 and Agnew et al., 2003), the effect of
401(k) match policy on employee purchases of company stock (Benartzi, 2001 and ...

Investor Behavior and the Purchase of Company Stock in 401 (k) Plans-The Importance of Plan Design -
N LIANG, SJ WEISBENNER - NBER Working Paper, 2002 - papers.ssrn.com
... of 401(k) assets in company stock. Finally, we find evidence that employees appear
to interpret an employer match in company stock as the provision of implicit ...

The Power of Suggestion: Inertia in 401 (k) Participation and Savings Behavior* -
BC Madrian, DF Shea - Quarterly Journal of Economics, 2001 - MIT Press
... enrollment was implemented, all of these em- ployees had between one and two years
of tenure and were eligible for the 401(k) plan with a company match. ...

Plan Design and 401 (k) Savings Outcomes -
JJ CHOI, D LAIBSON, BC MADRIAN - NBER Working Paper, 2004 - papers.ssrn.com
... 15 As noted in footnote 10, Choi et al. (2002) document that the increase in the
match threshold at this company does not increase 401(k) participation. ...

Participation in and Contributions to 401 (k) Pension Plans: Evidence from Plan Data -
LE Papke - Journal of Human Resources, 1995 - JSTOR
... firm profitability. For example, the 401(k) plan may base some part of
the match rate on the performance of the company. That is ...

The Role of Company Stock in Defined Contribution Plans -
OS MITCHELL, SP UTKUS - NBER Working Paper, 2002 - papers.ssrn.com
... provides a ESOP stock contribution and may also make a matching 401(k) contribution
to the 401(k) portion, which may or may not be directed into company stock. ...

Company Stock and Retirement Plan Diversification -
OS MITCHELL, SP UTKUS - papers.ssrn.com
... firms, including Ford Motor Company, DaimlerChrysler, and Bethlehem Steel, announced
that they were reducing their 401(k) matching contributions because of the ...

Employer matching and 401 (k) saving: Evidence from the health and retirement study -
GV Engelhardt, A Kumar - Journal of Public Economics, 2007 - Elsevier
... That is, providing a match raises 401(k) saving, but an increase in the level
of the match rate (conditional on providing a match) does not. ...

The Role of Company Stock in 401 (k) Plans -
JL VanDerhei - Risk Management & Insurance Review, 2002 - Blackwell Synergy
... that the availability and level of a company match is a primary impetus for at least
some employees to make contributions to their 401(k) accounts (VanDerhei ...

Source: Google Scholar
 
 

Exceeding company match in your 401(k)

Dear Dr. Don,
Please tell me, is it wise to invest more than your company matches in your 401(k). I invest 7 percent and my firm matches only up to 3 percent.
-- Janet Jimmied

Article continues below and (thank you)
 

Dear Janet,
When your company has a matching contribution program it's always a good idea to contribute at least up to the limit of the company match. It's free money toward retirement, and that's hard to beat.

A common structure in the company match is for the company to contribute 50 cents on the dollar for every dollar you contribute, up to 6 percent of salary. You contribute 6 percent, they contribute 3 percent and just like that you have 9 percent of your salary invested for your retirement -- not to mention an instant 50 percent return on your investment.

After you've reached the limit of the company match, you can continue to contribute up to the limits set by your 401(k) plan and the IRS guidelines. But, if you qualify to do so, you could choose to fund a Roth IRA account up to the limits of that account. The Roth contributions are made with after-tax dollars, but qualified distributions are then free of federal taxation.

You could also choose to fund a traditional IRA account with after-tax dollars with the expectation that you would convert this account to a Roth IRA account in 2010 when changes in the tax code allow this conversion regardless of your annual income. If you decide to take this approach you should discuss the pros and cons with your tax professional. IRS Publication 590, Individual Retirement Arrangements, gives a good overview for the do-it-yourselfer.

There are reasons to look outside your 401(k) plan after you've maximized your employer's matching contribution, but it takes a bit of tax knowledge to know if the strategies make more sense than just continuing to contribute to the 401(k). Your level of comfort in the investment options, annual fees and expense ratios should also play a role. The 401(k) plan may have limited options that you can improve upon by going outside that plan in saving for retirement.
 
 
 
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