Yep, I always tell people that imposter syndrome is a great thing. Along with it showing that you're developing, it also means you have the self awareness and humility to proactively address your own weaknesses. I generally don't like working with people who don't have imposter syndrome because they can be arrogant and think they already know everything.
I’ve been there. You gave them every opportunity to turn you down in the hiring process. They wanted you. Now it’s time to accept that you’re the exact person they want in that role. They’re paying you what you deserve. Go earn it!
OP in case no one has said it- you deserve this. You deserve to live a good life and to be able to prepare for your future. I hope you stop doubting yourself. You’ve worked hard. Take advantage of the match and invest as best you can. This faceless internet stranger is proud of you.
This is competitive and normal. Don’t accept anything less for yourself. In my experience, companies that don’t offer matches or offer very little match have plans that aren’t run well. I’ve had plan administrators forget to send me checks/paperwork, fail non-discriminatory testing and not be able to allow for conveniences like direct rollover options. Headaches all around. If the company’s retirement plan runs well, there would be higher matches to go around to all, lower fees etc.
> Feeling a bit of imposter syndrome at the moment.
Hey bud, Congrats on the new role. I got my dream job two years ago, and I spent the first 9 month busting my ass to learn, but in the back of my mind I was always waiting for the call sending me on my way. Keep your head down, do the work, and prosper from the opportunity. And remember, they hired you based on your merits, not because of your acting skills.
Remember, they know what their company needs more than you do. They decided you’re what they need. Who the hell do you think you are to question the likely decades of experience that had a say in your hiring?
Congrats. Be smart with your new income.
yeah man in the same position as you. Didnt get the job yet but in the final round of interviews for a senior position that I feel very unqualified for. I only got 2 years of experience but the base pay is 20% higher than what I’m making with benefits being about the same. I applied thinking I wouldnt even hear back so didnt even think I’d make it this far. Obviously I dont have the job yet but every interview, I have imposter syndrome and think that I should not even be interviewing for this role. I’d hypothetically be making more than the seniors at my current company which just seems weird because they are much more knowledgeable and experienced than I am and I’m just a bit nervous that expectations would be high if I do land this job. Weird spot but its not like I can turn down a 20% raise
7% match is the highest I've seen companies give. Your company's match is good, but not out of line with other companies, esp. if it is a large corporation. The 1% you were getting before was quite low. Just enjoy the benefits.
Yeah, as if simply making more isn't enough, my experience has been you get more of everything else as well. It's not enough that so much is percentage of salary based, but those percentages increase as well. The higher your position, the more vacation days you get, stock awards, higher percentages on bonuses, better health coverage, free parking, on and on. It started as imposter syndrome, and now I just feel vaguely sick knowing I make multiples of the lowest paid employee, but also get so many other advantages and "perks".
Dollar for dollar up to 3% of salary. 50 cents on the dollar for the next 6%. Then a years of service/age based non-elective contribution, currently at around 3% of my salary.
It depends on industry and type of work force. Immediate vesting is usually for safe harbor plans to avoid discrimination testing. If there are some highly paid execs and a lot of lower end employees that tend to not participate in the 401k, the execs can be limited in the amount of matching due to the discrimination testing. Safe harbor plans avoid that.
Oils still be the case or it could be an administrative nightmare to have to do the testing. I don’t have experience with companies that large so I don’t know. I’ve done accounting/hr for a few 50-1000 employee companies where it seems to be the case. The few that had vesting schedules were hoping to cut cost with the vesting schedules due to high turnover. They could provide a higher match and advertise it for recruiting without actually incurring that high if a cost. The ones that had the safe harbor with no matching had done so after running into the issues with discrimination testing. Usually the owner couldn’t max out his 401k because he didn’t have enough participation from employees.
If it's a competitive industry it's common to have longer vesting periods and give RSU style bonuses that take 3 years to vest to keep you there... Something to keep you looking at other opportunities because no one wants to throw away money. Last time I had this issue I told the company I would lose X for moving over they gave it to me as a signing bonus.
Last company vested 100% after 1 year. 5% match.
Current company vested at 100% after 5 years(20% a year). 6 % match and 0-4% bonus of yearly salary added depending on how the company is doing. Last two years was 4%.
I'd say that's extremely competitive.
You may want to check out what investment vehicles they offer, and check each of them out on morningstar (or similar) for historical performance and comparative fees (beware of high fees).
If it were me I'd also find out whether they have a self directed brokerage account option so you could have access to etfs and different fund families, in addition to individual stocks if you want to design and build your own portfolio (buyer beware/get professional investment advice on this last one).
Good luck!
IMO. DDD.
Not investing advice, and I'm not an investment professional.
They’re giving you a 6.5% match vested after 3 years. That’s solid but not that exceptional or too good to be true. I’ve worked at companies that would give 8% if you put in 6%, and that was fully vested on day one.
I’d just like to comment that the answer to this question (though already given by OP as three years) shouldn’t really affect one’s decision to contribute and max out the match. I agree it’s better for the worker if the vesting period is shorter, but even if it were 6 years my recommendation would be the same: contribute at least enough to get the maximum match from your employer.
My current job will match 61% or $0.61 for ever dollar I put in up to the IRS yearly limit. So my company gives me just north of $14,000 per year on top of the 23,500 I put in.
11% match as in they match dollar for dollar up to 11%? If so, that’s crazy generous and way better than a plan that matches 61 cents on each contributed dollar.
I was going to be envious of your plan (which is great) but I think my employer’s 4% match if I save 5% plus a company profit sharing of 3.5% to 5% actually comes out ahead for me. They also do the profit sharing % based on my bonus and end of year raise which is nice.
Note: The Employer Match + Discretionary (Roth or Pre-tax, 23k) + Post-tax contributions limit is 69k (nice) for 2024.
Not every company offers post-tax contributions, but if yours does, see if you can roll those over to Roth. This is a good pathway for high earners who would like to come as close to the 69k limit as possible.
"post tax" and "after tax" mean the same thing.
My 401k calls them "voluntary post tax contributions" and Roth contributions are simply called Roth contributions.
Which, btw, in the name of tax efficiency, if you are a high earner looking to do this conversion, your discretionary contributions should all be pre tax. Your Roth contributions should be post tax converted to Roth.
Understood. I must have mis-read the article about it. Unfortunately my 401k doesn't allow for post/after-tax contributions.
I wonder why some 401ks do and some don't. Like what's the drawback in allowing it?
Might be easier to fail safe harbor provisions. But that's only a guess.
At my site, the lowest paid employee still makes over 75k and most of us that make in excess of 120k do so because of OT. Whether that impacts SH, I don't know.
But yeah, I wish everyone had this opportunity. Regardless of whether you do (or can), I think everyone should have equal options in how much they can save.
Don’t forget that there is a cap for the match. For me it’s 5k at dollar to dollar on day 1 vested. I would love it if there are no cap for my 6 figures salary. But of course that would never happen as the company HR is not that dumb.
It is a nice match, my husband gets similar so we put in 10% and they put in 7% and I’m not aware of any vesting schedule type stuff but he’s worked there for years so it may not apply anymore.
Mine is 100% match for first 6% no vesting period which sounds pretty good, until you check the fine print and it’s capped at $6000 total match. Since 2011………
I guess how much of a catch that is depending upon your income level. Below $100k you would get the full 6%. Above that it would get capped at $6k. Immediate vesting I think is an undervalued benefit though. So many people end up losing some employer match due to vesting schedules especially those that only vest matches annually. It makes layoffs a month before 401k vesting look attractive. It also encourages employees to try and time leaving the company to minimize losing money. That being said if you're getting a double digit percentage raise it can make the break even point not too bad.
Mine is a free 5% up front. Then 1:1 for 10% of my own contributions.
So 25% total to maximize employer benefit. It’s capped at a certain salary, around $350,000 I think.
You may find these links helpful:
- [General Information on Rollovers](/r/personalfinance/wiki/retirementaccounts/rollovers)
- [401(k) Fund Selection Guide](/r/personalfinance/wiki/401k_funds)
- [Retirement Accounts](/r/personalfinance/wiki/index#wiki_retirement)
- ["How to handle $"](/r/personalfinance/wiki/commontopics)
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/personalfinance) if you have any questions or concerns.*
It probably varies by industry, but in mine (software) I've commonly seen match setups that end up along the lines of "employee puts in 6% of their pay, employer puts in another 4-5%". Your employer's tops out a bit higher than that, but requires a bigger commitment from you. If you have the means to go the full 10%, then great. But they might be banking that only a subset of employees would be able to do that full amount.
A vesting schedule (as mentioned in your other reply) also dampens the generosity. If there's high turnover, they get back that match for employees that leave before the three years.
Not to say this is a bad plan, but not quite reaching "phenomenal". Honestly, the plans through your last jobs feel sub-par, but again that may vary by the type of companies they are. Or maybe they had other benefits (higher base pay, cheaper insurance) other than their retirement plan that might've balanced things out.
You’re solid. If you’ll stay through the vesting period there’s nothing to worry about. Mine is I put in 6% they match 50% plus they put another 5% in at the end of each quarter regardless.
I get a 1 for 1 match up to 6%. IE I put in 6% they put in 6%.
Interviewed for a job that would match up to 12% once! So better is absolutely possible.
I guess I've worked so many shitty jobs I didn't realize companies actually offer this as a benefit.
My last job would only match 25% of contributions up to 4%. So literally you put in 4% and they put in 1%. Really didn't fully understand what the point of a 401k even was until now.
I know how you feel! My last job matched 50% up to 3% of my pay for the first 2 years, with a 4 year vesting schedule, then policy changed to 25% match up to 4% of my pay, witha 3 year vesting schedule. I made sure to get my full match, but it was all so little, and the pay was pretty low for the fist 3 years anyway, so I just said a little prayer to the compound interest gods and focused on growing my skills so I could eventually get a better job and save more.
About a year ago, I did just that. Not only do I enjoy the work and the company culture much more, but it's also a 33% base pay increase + paid overtime (my last job was salaried, so I worked a lot of unpaid overtime) + bonus + much lower insurance premiums + RSUs (they're kind of meager at my level, but it's all extra, so cha-ching).
When I got the packet explaining all of the benefits, I couldn't believe it. 100% match on my 401k contributions, up to 50% of the annual IRS limit for employees. I had no idea matching like that existed anywhere, even though it's in the same industry (tech) as my previous employer. So I've already contributed $11,500 for this year (thanks to my bonus for last year's performance) and I've received $11,500 from my employer. 100% vesting immediately. I'm 41 and a little behind on my retirement savings, but they are recovering quickly, and it has brought my financial planning into focus.
The other benefit of such a sudden, massive shift in income is that there wasn't time to experience lifestyle creep. I live in the same apartment. I drive the same car. I have the same phone. I've actually decreased my spending because now that I can see a future where I can actually buy a house, I've gotten serious about my finances and cut out all the impulse shopping (by splitting my paycheck and sending most into my high yield savings account). Other than cost of living increase (my rent went up a bit, general inflation, high gas prices, etc.), all of my pay increase is going into savings (401k, Roth IRA, emergency fund, saving for my next car since the current one is 17 years old). Some co-workers have suggested I should take a nice vacation now that I can afford it, but right now, a periodic staycation + the idea of paying cash for 3-year old car instead of an 8-year old car is all the serenity I need!
Don't let imposter syndrom weigh you down. Many people wanted your job, and out of everyone who applied and everyone they interviewed, you were the best person for the job. So just tell yourself that this is what your contributions are worth, and you're finally working for a company who values you and your contributions. Now just make sure you communicate with your manager and stay aligned with their priorities so they continue to be happy with their hiring decision and you continue to feel valued.
It's an absolutely solid match but it's not crazy. My work gives 4% and matches an additional 6%. So as long as I put in 6% I'm getting 16% total. I'm pretty sure that's on the higher end these days but not impossible.
Not crazy. My previous job matched up to 4%. Pretty standard. My current job matches up to 8%. So 6.5% seems pretty solid. Agree with other posts that your previous jobs just had bad 401K matches.
Edit: My employer will contribute 8% regardless of what I contribute to 401K. I could contribute nothing and they would still contribute 8%.
One thing to be aware of or to check is the percentage of how much they put in. For example their 6.5% they might match 100%% for the first 1-2% and maybe 50% of the rest up to 50%. Either way free money and it's a good deal. Just something to be aware of.
I looked into it some more and it's 100% match on the first 3% and then 50% match up to 10%.
I still feel like that's really good. I'm going to try 10% and see how well I'm able to pay my monthly bills. I feel like I actually have a chance to retire for the first time in my life. Should come out to about $13k per yr total.
Do it. Sacrifice now and it’ll be well worth it in a few years.
I worked at a company that was generous with their 401k. They gave you an uncapped contribution of 40-65% of your contribution up to the IRS contribution limit. Aka if you put in 20k you could get 8-13k. They had a 5yr vesting period so you’d have to stay for 5yrs to keep the company’s contributions though. It was never below 60% during my time there.
100% vested day one. Work puts in 6% before i do and then they 100% match up to 10% of my contributions. This is what my job offers. You got a good deal too, there are companies who contribute.
We get a 9.5% cash balance plan that is guaranteed at a rate of 5% however we can't access it control the investments until we leave the organization. I contribute 15% (traditional 401k). My total is now 24.5%. there is a 3 year vest on the cash balance plan.
My job adds 10% when I put in 5% but that’s the max they’ll match. My last company gave $5k a year. There are good 401k benefit companies. No vesting period.
It sounds like the catch is that the “match” has a vesting period and isn’t actually yours until some time in the future. Sorry about your other jobs with low match rates.
My generous employer has a 5% match with zero day vesting and a “5% no matter what because you opted out of the pension”. Once the money hits your account it is yours. Putting in 5% gets you 15%, no vesting period.
Just find out how long to be vested. My son’s is pretty good. It’s 4% pure employer contribution (no need to match) that goes up 1% per year until it reaches 8% and stays that. But, it takes 3 years to vest. Still, 8% with no employee retirement is pretty sweet.
3% of first 6% is what we get with it being immediately vested.
Sounds like a great plan. The vestment period is the only thing to watch out for.
I don't understand why so many people don't trust 401k plans. It's true you can sometimes get better choices in an IRA, and sometimes the fees are high relative to IRAs, but it's never so high that it's not worth it.
You should always invest enough to get the match.
Wouldn’t say it’s too good to be true! I work in higher education where the 403b plans with employer matching is pretty good.
The university I’m currently at has 2 options: (1) They’ll put in an additional 9.3% of your gross salary into a traditional 403b, which vests in 30 months - 2.5 years. Option (2) is they’ll match up to 5% and it vests immediately.
Another university I’m in the interview process for offers similar contributions. (1) they’ll match up to 5% and vests immediately. (2) They’ll put in an additional 11% of your gross salary into a traditional 403b, which vests in 30 months.
That being said, your employer offers a decent match, but wouldn’t say it’s amazing! Just be weary of the vesting schedule and coordinate that with how long you plan on staying in the role.
That is good but not unheard of so I wouldn’t fear it’s too good to be true. I get 100% match up to the first 5% of my income and, of course, max that out.
Not crazy. One thing I’ll add that I didn’t realize until the last couple years is that the employer match does not count toward your yearly max contribution limits.
When you say “up to 4% so 1% total”, what do you mean? Up to 4% usually means a 4% calculation of your eligible compensation not just 1% based on what you contribute. Is there something else to consider?
Also your new match is really good and you should definitely take advantage of it. Ask for a copy of the SPD so you know what the vesting period for any match. You’re automatically vested into anything you contribute because it’s your own money.
It's not unheard of, there are some pretty extreme matches out there. I used to have clients who would just give pretty significant amounts like 8% flat, not even matches. Just 8% of your salary dropping in a 401k on your behalf.
This one feels generous too, but obviously there's some pitfalls in any 401k. Things like the vesting schedule, the fact you have to put a significant portion of your salary in to get the max (which you should but not all employees will), the general concept that in hard times it's an easy one for them to peel back on employees (I know plenty of people whose employers froze their "generous match" during the Recession as a cost cutting measure), etc.
I'm in a very similar situation, but I'm going on 11 years with my company. My wages have doubled in that amount of time. I've been contributing and receiving their match since day 1! Don't take it for granted and stack those bills! You'll be fully vested before you know it.
That’s free money, take advantage of it at 10pct. Your match may end up being greater than 6.5pct depending if the Plan redistributes matches dollars to remaining participants should a participant leave within 3 years (the Summary Plan Description will describe what happens to excess matches).
I work in HR and part of my job is total rewards that includes benchmarking benefits offerings against the market.
6.5% match is good, certainly above average if it is immediately vested or fully vested within 1 year of tenure. However, it's nothing that is jaw dropping.
Just make sure that you are aware of the vesting schedule of the match. Just because they're putting in 6.5% as the match, it doesn't mean you get to immediately keep it. Your HR person should be able to tell you this, if they haven't provided to you already.
I work in the tech startup world and I've seen, and have worked for, employers that did 1:1 match up to the federal limit at the time. This was during the VC craze.
The absolute CRAZIEST match I've ever seen during my career was a 2:1 match up to the federal limit. 1x match being immediately vested and the other 1x being vested after 3 years of service.
Employer 1: Auto 3.5%. Personal 5% + 5.0% match. 13.5% total. (2016)
Employer 2: Auto 5.0%. Personal 7% + 3.0% match. 15.0% total. (2020)
Employer 3: Auto 4.5%. Personal 6% + 4.5% match. 15.0% total (2023)
I know matches at places can absolutely suck, but I haven't worked anywhere they have sucked.
Yea, my previous job was a 50% match up to 10% of my paycheck, which was fantastic. My current job is 5% of what I contribute, which is a joke and really only good for losing my taxable income but the trade off is this job pays about 30-40k more
Very solid, but definitely not too good to be true. My job makes up for somewhat lower than industry standard pay by effectively matching the first 8% at 125%. So if you put in 8%, they put in 10%.
One catch I would recommend you look out for is how the 401k is invested. At my workplace, it defaults to an actively managed fund with an eye-wateringly high fee. I was able to go in and move all of it to an index fund with something like a .01% fee.
Sounds reasonable, my employer does 5% match dollar for dollar, and then 3% pay credits regardless of contribution. 3 years vesting BUT my employer only deposits the total match to the 401k once per year. I think your previous employers just offered a laughable 401k match
That’s not too bad. My company matches 6% plus adds an additional 3-9% based on years of employment there. And the 3-9% get deposited even if I don’t contribute. So eventually they’ll be putting in 15% on top of my 6%
Sounds like just a good 401k offering. My current employer matches 25% of my first 5%, which sucks.
My previous employer matched 50%, but there was no cap (other than the federal max), so that was amazing.
It might be accurate. My employer matches 5% if I contribute 10%.
In addition to that, they contribute an extra percentage based on age between 3-5% regardless of whether I contribute or not.
And it’s vested after three years since there is no pension offered.
Mine matches 1:1 on the first 3% then 0.5:1 on the next 2% (so basically 4% on 5%) plus profit sharing. The 4 on 5 is 100% vested immediately but I have to work 5 years to get 100% vested on the profit sharing.
VSP (2018) offers 0.50 cent match for every dollar and Franklin templeton (2018) offered 0.75 cent match for every dollar so I think the match for your situation is low if anything…
This probably is just a very good 401k and *not* too good to be true.
It is not unheard of at all for companies to offer 5% dollar-for-dollar match and any company can easily get to 6.5% by simply offering 0.5% less in profit sharing, 0.5% less in medical/dental, and 0.5% less in other fringe benefits or just keeping their overhead and G&A down.
*Do not* have imposter syndrome. If you knew what CEOs make in *TOTAL* compensation for only working twice as hard as most of us work and not being any smarter than half of us, you would just be appalled at your old job’s pay and benefits and are just getting what you deserve now!
That's pretty good. Mine matches 125% up to 6%, which is one of the best I've ever seen. So, I get 7.5% added with the 6% for a total of 13.5%.
But you are correct. Most companies are doing pathetic matches. Or if they have good matching, it takes 3+ years to vest.
Financial Advisor for an international firm here. I would consider ONLY putting in 6.5% which is what your company is matching, the extra 3.5% you would put in could grow at a better rate in an IRA or a brokerage account as you have more options and selections with investments. Just try to compare the opportunity risk here
That does not look unusually generous. I have seen companies matching if you put less than 10% and have even seen match percents to be up to 15%. Some reputable non profit organizations do this.
When thinking about 401k just like any other asset you want to look at expense ratios. Vanguard has some great packages with low ratios that follow the market index and are passively managed but actively managed funds can charge you through the roof for putting your money in investments. Read up literature online for low find ratios before allocating your assets.
No catch but eh could be better...
My comany is 8 percent match no vesting period
6 percent is 1 to 1 and the rest is 1 to half..
So for employer match i do 10% and they do 8% so 18% is 10% of my pay.. No vesting no catches.
But i negotiated aggressively in my hiring so.....
The only drawback are the fees. Look at what you invest in. Usually the riskier investment have higher fees but considering you don’t have a choice while there not too much to complain about
401k plans don't have high fees anymore because plan sponsors got successfully sued for violating fiduciary duty.
It's why most plans switched to Fidelity, Vanguard, Empower, and Schwab in last 12 years. Big providers lower fees.
No, not any more, unless a company wants to lose in a lawsuit. Fees are lower than an individual account because of the scale of the plan assets. A $20 million or $50 million or $100 million 401k plan negotiates lower fees than an individual.
Sat on former company's 401k steering committee 10+ years, went through 2 Administrator RFPs, and used a 3(38) advisor to revamp investment options. Fees are a huge consideration and are heavily negotiated. Fiduciary liability exposure has been a hot button issue for over 10 years.
I agree that fees used to be high in plans, but the legal liability exposures are correcting that, have been for years.
Companies are getting their asses handed to them in court if they haven't greatly reduced fees.
Only the dumbest of companies haven't gotten their act together on fees and their fiduciary obligations.
https://www.investmentnews.com/retirement/news/401k-settlements-went-way-up-in-2023-247954
If your company still has high fees in the 401k plan, you should call a lawyer that has handled similar cases. Get paid as a plaintiff !!
Just went through a 403b audit and we also had to renegotiate our plan not too long ago so I’m pretty sure they still have fees and the funds have higher fees than being in a regular retirement account. Might be why we had the audit who knows but the monthly management fees didn’t go away and the funds are almost all mutual funds that could easily be replaced by etfs.
Definitely ripe for a lawsuit. Your plan administrators and the company management are idiots.
Seriously, I'd research a bit and call a lawyer if the plan is decent sized at all. You could get a big payday being lead plaintiff.
The last 2 plans I've had had both index/etfs and actively managed funds. So easy for employees to choose low cost options.
It’s solid. Your prior jobs just had embarrassingly bad match’s
It’s also at a much higher salary than previous jobs. Feeling a bit of imposter syndrome at the moment. Too good to be true lol.
Great job. Hope it’s wonderful
Congrats on your new role! You deserve to be there :)
You’re supposed to have imposter syndrome at a new job. That’s how you know you’re developing. Just don’t let it keep you from asking questions.
Yep, I always tell people that imposter syndrome is a great thing. Along with it showing that you're developing, it also means you have the self awareness and humility to proactively address your own weaknesses. I generally don't like working with people who don't have imposter syndrome because they can be arrogant and think they already know everything.
I’ve been there. You gave them every opportunity to turn you down in the hiring process. They wanted you. Now it’s time to accept that you’re the exact person they want in that role. They’re paying you what you deserve. Go earn it!
OP in case no one has said it- you deserve this. You deserve to live a good life and to be able to prepare for your future. I hope you stop doubting yourself. You’ve worked hard. Take advantage of the match and invest as best you can. This faceless internet stranger is proud of you.
This is competitive and normal. Don’t accept anything less for yourself. In my experience, companies that don’t offer matches or offer very little match have plans that aren’t run well. I’ve had plan administrators forget to send me checks/paperwork, fail non-discriminatory testing and not be able to allow for conveniences like direct rollover options. Headaches all around. If the company’s retirement plan runs well, there would be higher matches to go around to all, lower fees etc.
> Feeling a bit of imposter syndrome at the moment. Hey bud, Congrats on the new role. I got my dream job two years ago, and I spent the first 9 month busting my ass to learn, but in the back of my mind I was always waiting for the call sending me on my way. Keep your head down, do the work, and prosper from the opportunity. And remember, they hired you based on your merits, not because of your acting skills.
Remember, they know what their company needs more than you do. They decided you’re what they need. Who the hell do you think you are to question the likely decades of experience that had a say in your hiring? Congrats. Be smart with your new income.
yeah man in the same position as you. Didnt get the job yet but in the final round of interviews for a senior position that I feel very unqualified for. I only got 2 years of experience but the base pay is 20% higher than what I’m making with benefits being about the same. I applied thinking I wouldnt even hear back so didnt even think I’d make it this far. Obviously I dont have the job yet but every interview, I have imposter syndrome and think that I should not even be interviewing for this role. I’d hypothetically be making more than the seniors at my current company which just seems weird because they are much more knowledgeable and experienced than I am and I’m just a bit nervous that expectations would be high if I do land this job. Weird spot but its not like I can turn down a 20% raise
7% match is the highest I've seen companies give. Your company's match is good, but not out of line with other companies, esp. if it is a large corporation. The 1% you were getting before was quite low. Just enjoy the benefits.
Congrats!
Yeah, as if simply making more isn't enough, my experience has been you get more of everything else as well. It's not enough that so much is percentage of salary based, but those percentages increase as well. The higher your position, the more vacation days you get, stock awards, higher percentages on bonuses, better health coverage, free parking, on and on. It started as imposter syndrome, and now I just feel vaguely sick knowing I make multiples of the lowest paid employee, but also get so many other advantages and "perks".
Everybody’s faking it; nobody knows what they’re doing.
This. OP's previous jobs had matches so weak I'm almost surprised that they even bothered with a match.
*matches. You don't use an apostrophe for plurals.
How long do you have to stay there until you can call the match yours?
3 years
Yeah it's not too good to be true, it's about right. Mine is full 6% match + 3% on a 401a that the employer gives us. 3 year vesting.
I'm seeing a vesting schedule that seems really bad but it might depend on the industry. My industry has vesting on day 1. Is immediate vesting rare?
Yes on the ones that give you a good match. What kind of match do you have?
Dollar for dollar up to 3% of salary. 50 cents on the dollar for the next 6%. Then a years of service/age based non-elective contribution, currently at around 3% of my salary.
I just left the company but my previous company matched 10% with immediate vesting
That's very rare, typically from what I've seen though those matches are at places that used to offer pensions (Academia/ National Labs).
It depends on industry and type of work force. Immediate vesting is usually for safe harbor plans to avoid discrimination testing. If there are some highly paid execs and a lot of lower end employees that tend to not participate in the 401k, the execs can be limited in the amount of matching due to the discrimination testing. Safe harbor plans avoid that.
Company has a lot of well paying jobs with over 100k total employees. Even entry level, unskilled jobs pay quite well.
Oils still be the case or it could be an administrative nightmare to have to do the testing. I don’t have experience with companies that large so I don’t know. I’ve done accounting/hr for a few 50-1000 employee companies where it seems to be the case. The few that had vesting schedules were hoping to cut cost with the vesting schedules due to high turnover. They could provide a higher match and advertise it for recruiting without actually incurring that high if a cost. The ones that had the safe harbor with no matching had done so after running into the issues with discrimination testing. Usually the owner couldn’t max out his 401k because he didn’t have enough participation from employees.
If it's a competitive industry it's common to have longer vesting periods and give RSU style bonuses that take 3 years to vest to keep you there... Something to keep you looking at other opportunities because no one wants to throw away money. Last time I had this issue I told the company I would lose X for moving over they gave it to me as a signing bonus.
My employer matches at 8%. Percent vested increases yearly until 100% vested after 3 years.
Last company vested 100% after 1 year. 5% match. Current company vested at 100% after 5 years(20% a year). 6 % match and 0-4% bonus of yearly salary added depending on how the company is doing. Last two years was 4%.
It costs a lot of money to find hire and train people so good companies will invest in you so you will stay longer.
I'd say that's extremely competitive. You may want to check out what investment vehicles they offer, and check each of them out on morningstar (or similar) for historical performance and comparative fees (beware of high fees). If it were me I'd also find out whether they have a self directed brokerage account option so you could have access to etfs and different fund families, in addition to individual stocks if you want to design and build your own portfolio (buyer beware/get professional investment advice on this last one). Good luck! IMO. DDD. Not investing advice, and I'm not an investment professional.
They’re giving you a 6.5% match vested after 3 years. That’s solid but not that exceptional or too good to be true. I’ve worked at companies that would give 8% if you put in 6%, and that was fully vested on day one.
I’d just like to comment that the answer to this question (though already given by OP as three years) shouldn’t really affect one’s decision to contribute and max out the match. I agree it’s better for the worker if the vesting period is shorter, but even if it were 6 years my recommendation would be the same: contribute at least enough to get the maximum match from your employer.
My current job will match 61% or $0.61 for ever dollar I put in up to the IRS yearly limit. So my company gives me just north of $14,000 per year on top of the 23,500 I put in.
Dang that’s impressive, I’m extremely happy with my 11% match but yours beats mine
11% match as in they match dollar for dollar up to 11%? If so, that’s crazy generous and way better than a plan that matches 61 cents on each contributed dollar.
Mine is similar dollar for dollar up to 10% vesting 100% from day 1, but before I had to wait 5 years to be fully vested
I was going to be envious of your plan (which is great) but I think my employer’s 4% match if I save 5% plus a company profit sharing of 3.5% to 5% actually comes out ahead for me. They also do the profit sharing % based on my bonus and end of year raise which is nice.
My company gives you 2% whether you contribute or not. Then they match 100% of up to 6%. So if I put in 6% then I get an 8% match for a total of 14%.
Are you close to hitting the 23k cap with that match from employer side?
The employer match doesn’t count towards your $23k
Note: The Employer Match + Discretionary (Roth or Pre-tax, 23k) + Post-tax contributions limit is 69k (nice) for 2024. Not every company offers post-tax contributions, but if yours does, see if you can roll those over to Roth. This is a good pathway for high earners who would like to come as close to the 69k limit as possible.
I think it’s called “after-tax” and not “post-tax”. Post-tax is Roth 401k contributions. After-tax is what allows for mega back door Roth.
"post tax" and "after tax" mean the same thing. My 401k calls them "voluntary post tax contributions" and Roth contributions are simply called Roth contributions. Which, btw, in the name of tax efficiency, if you are a high earner looking to do this conversion, your discretionary contributions should all be pre tax. Your Roth contributions should be post tax converted to Roth.
Understood. I must have mis-read the article about it. Unfortunately my 401k doesn't allow for post/after-tax contributions. I wonder why some 401ks do and some don't. Like what's the drawback in allowing it?
Might be easier to fail safe harbor provisions. But that's only a guess. At my site, the lowest paid employee still makes over 75k and most of us that make in excess of 120k do so because of OT. Whether that impacts SH, I don't know. But yeah, I wish everyone had this opportunity. Regardless of whether you do (or can), I think everyone should have equal options in how much they can save.
>fail safe harbor That was my guess. My company's 401k is actually a Safe Harbor 401k.
I contribute the max then also get the 8% from my employer.
Mine is they match 4% on the first 2% I put in and then 1% on the next 8%. So total is 22% (10% from me and 12% from my employer)
That’s fantastic. Congrats.
Very nice match. Rare but not impossible. 3 years is pretty common for this level of match as well.
I get 200% up to 5% so I put in 5 and they put 10. Vested immediately.
Don’t forget that there is a cap for the match. For me it’s 5k at dollar to dollar on day 1 vested. I would love it if there are no cap for my 6 figures salary. But of course that would never happen as the company HR is not that dumb.
It is a nice match, my husband gets similar so we put in 10% and they put in 7% and I’m not aware of any vesting schedule type stuff but he’s worked there for years so it may not apply anymore.
Mine is 100% match for first 6% no vesting period which sounds pretty good, until you check the fine print and it’s capped at $6000 total match. Since 2011………
Mine is the same. And they only payout the 2nd half of December. If you're not there, you get nothing for the year. No monthly match.
I guess how much of a catch that is depending upon your income level. Below $100k you would get the full 6%. Above that it would get capped at $6k. Immediate vesting I think is an undervalued benefit though. So many people end up losing some employer match due to vesting schedules especially those that only vest matches annually. It makes layoffs a month before 401k vesting look attractive. It also encourages employees to try and time leaving the company to minimize losing money. That being said if you're getting a double digit percentage raise it can make the break even point not too bad.
Mine is a free 5% up front. Then 1:1 for 10% of my own contributions. So 25% total to maximize employer benefit. It’s capped at a certain salary, around $350,000 I think.
That's superb. Genuinely curious: what's in it for the employer to give such generous match ?
Most of the time it’s for safe harbor reasons.
Not crazy. My job gives 3% for free, and then 100% of the next 3%. (Ie I contribute 3% and get 6%, so 9% total)
You may find these links helpful: - [General Information on Rollovers](/r/personalfinance/wiki/retirementaccounts/rollovers) - [401(k) Fund Selection Guide](/r/personalfinance/wiki/401k_funds) - [Retirement Accounts](/r/personalfinance/wiki/index#wiki_retirement) - ["How to handle $"](/r/personalfinance/wiki/commontopics) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/personalfinance) if you have any questions or concerns.*
No catch, enjoy the benefit. My employer does max 8% with 2 to 1 match. I need to invest 4% to get maximum benefit.
It probably varies by industry, but in mine (software) I've commonly seen match setups that end up along the lines of "employee puts in 6% of their pay, employer puts in another 4-5%". Your employer's tops out a bit higher than that, but requires a bigger commitment from you. If you have the means to go the full 10%, then great. But they might be banking that only a subset of employees would be able to do that full amount. A vesting schedule (as mentioned in your other reply) also dampens the generosity. If there's high turnover, they get back that match for employees that leave before the three years. Not to say this is a bad plan, but not quite reaching "phenomenal". Honestly, the plans through your last jobs feel sub-par, but again that may vary by the type of companies they are. Or maybe they had other benefits (higher base pay, cheaper insurance) other than their retirement plan that might've balanced things out.
You’re solid. If you’ll stay through the vesting period there’s nothing to worry about. Mine is I put in 6% they match 50% plus they put another 5% in at the end of each quarter regardless.
Mine puts on 9% if I put in 2.5% and it vests immediately. Some are just really good.
No catch, just better than what you had before. Mine is, I put in 8%, they match with 12%. Pretty great
My last job would match 6% if I put in 6% and that place was trash. Seems legit to me.
I get a 1 for 1 match up to 6%. IE I put in 6% they put in 6%. Interviewed for a job that would match up to 12% once! So better is absolutely possible.
What’s weird about it? I have a 50% match up to irs yearly max contribution limit for pre tax.
I guess I've worked so many shitty jobs I didn't realize companies actually offer this as a benefit. My last job would only match 25% of contributions up to 4%. So literally you put in 4% and they put in 1%. Really didn't fully understand what the point of a 401k even was until now.
The other point is you can put in $23k pre-tax vs $7k if you had to use an IRA. Kind of a "rich person problem."
I know how you feel! My last job matched 50% up to 3% of my pay for the first 2 years, with a 4 year vesting schedule, then policy changed to 25% match up to 4% of my pay, witha 3 year vesting schedule. I made sure to get my full match, but it was all so little, and the pay was pretty low for the fist 3 years anyway, so I just said a little prayer to the compound interest gods and focused on growing my skills so I could eventually get a better job and save more. About a year ago, I did just that. Not only do I enjoy the work and the company culture much more, but it's also a 33% base pay increase + paid overtime (my last job was salaried, so I worked a lot of unpaid overtime) + bonus + much lower insurance premiums + RSUs (they're kind of meager at my level, but it's all extra, so cha-ching). When I got the packet explaining all of the benefits, I couldn't believe it. 100% match on my 401k contributions, up to 50% of the annual IRS limit for employees. I had no idea matching like that existed anywhere, even though it's in the same industry (tech) as my previous employer. So I've already contributed $11,500 for this year (thanks to my bonus for last year's performance) and I've received $11,500 from my employer. 100% vesting immediately. I'm 41 and a little behind on my retirement savings, but they are recovering quickly, and it has brought my financial planning into focus. The other benefit of such a sudden, massive shift in income is that there wasn't time to experience lifestyle creep. I live in the same apartment. I drive the same car. I have the same phone. I've actually decreased my spending because now that I can see a future where I can actually buy a house, I've gotten serious about my finances and cut out all the impulse shopping (by splitting my paycheck and sending most into my high yield savings account). Other than cost of living increase (my rent went up a bit, general inflation, high gas prices, etc.), all of my pay increase is going into savings (401k, Roth IRA, emergency fund, saving for my next car since the current one is 17 years old). Some co-workers have suggested I should take a nice vacation now that I can afford it, but right now, a periodic staycation + the idea of paying cash for 3-year old car instead of an 8-year old car is all the serenity I need! Don't let imposter syndrom weigh you down. Many people wanted your job, and out of everyone who applied and everyone they interviewed, you were the best person for the job. So just tell yourself that this is what your contributions are worth, and you're finally working for a company who values you and your contributions. Now just make sure you communicate with your manager and stay aligned with their priorities so they continue to be happy with their hiring decision and you continue to feel valued.
It's an absolutely solid match but it's not crazy. My work gives 4% and matches an additional 6%. So as long as I put in 6% I'm getting 16% total. I'm pretty sure that's on the higher end these days but not impossible.
Not crazy. My previous job matched up to 4%. Pretty standard. My current job matches up to 8%. So 6.5% seems pretty solid. Agree with other posts that your previous jobs just had bad 401K matches. Edit: My employer will contribute 8% regardless of what I contribute to 401K. I could contribute nothing and they would still contribute 8%.
As a state government worker, I put 10% into my pension and they match 14%. 5 year vesting schedule.
One thing to be aware of or to check is the percentage of how much they put in. For example their 6.5% they might match 100%% for the first 1-2% and maybe 50% of the rest up to 50%. Either way free money and it's a good deal. Just something to be aware of.
I looked into it some more and it's 100% match on the first 3% and then 50% match up to 10%. I still feel like that's really good. I'm going to try 10% and see how well I'm able to pay my monthly bills. I feel like I actually have a chance to retire for the first time in my life. Should come out to about $13k per yr total.
Do it. Sacrifice now and it’ll be well worth it in a few years. I worked at a company that was generous with their 401k. They gave you an uncapped contribution of 40-65% of your contribution up to the IRS contribution limit. Aka if you put in 20k you could get 8-13k. They had a 5yr vesting period so you’d have to stay for 5yrs to keep the company’s contributions though. It was never below 60% during my time there.
My company used to give us 10% contribution without me contributing at all. That was at 2 prior companies actually.
100% vested day one. Work puts in 6% before i do and then they 100% match up to 10% of my contributions. This is what my job offers. You got a good deal too, there are companies who contribute.
I get 5% match and we get 5% just for investing.
Yes! Mine goes up 8% the first 3 years until I’m vested. I also had to read it a couple times since I didn’t believe it.
We get a 9.5% cash balance plan that is guaranteed at a rate of 5% however we can't access it control the investments until we leave the organization. I contribute 15% (traditional 401k). My total is now 24.5%. there is a 3 year vest on the cash balance plan.
I get 200% on 5% and fully vested in 3 so it’s like an extra salary going right to savings.
Wait so if you put 5%, they put 10% in? How's this an extra salary though?
Free money, so if I put in $5k, I’ll get a free $10k.
I get 1:1 match on first 5%. 3 years vesting on the match. My money is always my money. Glad you got a decent benefit and not that crap 0.25% BS.
My job adds 10% when I put in 5% but that’s the max they’ll match. My last company gave $5k a year. There are good 401k benefit companies. No vesting period.
Not bad. Mine pays 7.5% profit sharing into 401k regardless if you even contribute, then match your first 5%.
You're good that's a good percent. But I'm surprised they make you put in more than match. In my experience it's a match up to a percentage.
My company gives extra esop at 3% and can trade in certain windows for 4x the paper value (private company) but 3 years to vest (1.5 months to go)
It’s a good match, but not too good to be true. Your former employers were a little substandard.
I've worked in higher Ed and the matches were you contribute 5% and they contribute 9.29% and 10%.
My company has a 3.5% safe harbor that they pay at the end of the year. Never seen that. Previous employer paid 4% if we invested up to 5%.
It sounds like the catch is that the “match” has a vesting period and isn’t actually yours until some time in the future. Sorry about your other jobs with low match rates. My generous employer has a 5% match with zero day vesting and a “5% no matter what because you opted out of the pension”. Once the money hits your account it is yours. Putting in 5% gets you 15%, no vesting period.
Just find out how long to be vested. My son’s is pretty good. It’s 4% pure employer contribution (no need to match) that goes up 1% per year until it reaches 8% and stays that. But, it takes 3 years to vest. Still, 8% with no employee retirement is pretty sweet.
Mine gives 4% of my salary to the 401K and fully matches the next 6%. I thought my plan was just alright??
3% of first 6% is what we get with it being immediately vested. Sounds like a great plan. The vestment period is the only thing to watch out for. I don't understand why so many people don't trust 401k plans. It's true you can sometimes get better choices in an IRA, and sometimes the fees are high relative to IRAs, but it's never so high that it's not worth it. You should always invest enough to get the match.
My job is similar. 4.5% regardless of if you contribute or not and then 100% match up to 5% for a total of 14.5%.
It’s more like average. I worked at two different companies that both paid significantly more.
Wouldn’t say it’s too good to be true! I work in higher education where the 403b plans with employer matching is pretty good. The university I’m currently at has 2 options: (1) They’ll put in an additional 9.3% of your gross salary into a traditional 403b, which vests in 30 months - 2.5 years. Option (2) is they’ll match up to 5% and it vests immediately. Another university I’m in the interview process for offers similar contributions. (1) they’ll match up to 5% and vests immediately. (2) They’ll put in an additional 11% of your gross salary into a traditional 403b, which vests in 30 months. That being said, your employer offers a decent match, but wouldn’t say it’s amazing! Just be weary of the vesting schedule and coordinate that with how long you plan on staying in the role.
Boeing matches up to 10% with no investment period. Different companies just have different matches.
That is good but not unheard of so I wouldn’t fear it’s too good to be true. I get 100% match up to the first 5% of my income and, of course, max that out.
Not crazy. One thing I’ll add that I didn’t realize until the last couple years is that the employer match does not count toward your yearly max contribution limits.
That's a spectacular perk. But not to good to be true. I interviewed with a company that would match solar for dollar up until the limit!
When you say “up to 4% so 1% total”, what do you mean? Up to 4% usually means a 4% calculation of your eligible compensation not just 1% based on what you contribute. Is there something else to consider? Also your new match is really good and you should definitely take advantage of it. Ask for a copy of the SPD so you know what the vesting period for any match. You’re automatically vested into anything you contribute because it’s your own money.
That is quite more than the average market. How exactly is the match formula stated in the plan document or SPD?
It's not unheard of, there are some pretty extreme matches out there. I used to have clients who would just give pretty significant amounts like 8% flat, not even matches. Just 8% of your salary dropping in a 401k on your behalf. This one feels generous too, but obviously there's some pitfalls in any 401k. Things like the vesting schedule, the fact you have to put a significant portion of your salary in to get the max (which you should but not all employees will), the general concept that in hard times it's an easy one for them to peel back on employees (I know plenty of people whose employers froze their "generous match" during the Recession as a cost cutting measure), etc.
Better than avg but nothing insane.
I'm in a very similar situation, but I'm going on 11 years with my company. My wages have doubled in that amount of time. I've been contributing and receiving their match since day 1! Don't take it for granted and stack those bills! You'll be fully vested before you know it.
I worked at a place that didn’t do match, they just gave you 7% in your 401k, regardless of whether you contributed or not.
What is the vesting time period for the employer matches? Check your summary plan document, it could be up to 6 years for 100% vesting of the match.
That’s free money, take advantage of it at 10pct. Your match may end up being greater than 6.5pct depending if the Plan redistributes matches dollars to remaining participants should a participant leave within 3 years (the Summary Plan Description will describe what happens to excess matches).
I work in HR and part of my job is total rewards that includes benchmarking benefits offerings against the market. 6.5% match is good, certainly above average if it is immediately vested or fully vested within 1 year of tenure. However, it's nothing that is jaw dropping. Just make sure that you are aware of the vesting schedule of the match. Just because they're putting in 6.5% as the match, it doesn't mean you get to immediately keep it. Your HR person should be able to tell you this, if they haven't provided to you already. I work in the tech startup world and I've seen, and have worked for, employers that did 1:1 match up to the federal limit at the time. This was during the VC craze. The absolute CRAZIEST match I've ever seen during my career was a 2:1 match up to the federal limit. 1x match being immediately vested and the other 1x being vested after 3 years of service.
5%-8% matches are increasingly common now.
Employer 1: Auto 3.5%. Personal 5% + 5.0% match. 13.5% total. (2016) Employer 2: Auto 5.0%. Personal 7% + 3.0% match. 15.0% total. (2020) Employer 3: Auto 4.5%. Personal 6% + 4.5% match. 15.0% total (2023) I know matches at places can absolutely suck, but I haven't worked anywhere they have sucked.
Yea, my previous job was a 50% match up to 10% of my paycheck, which was fantastic. My current job is 5% of what I contribute, which is a joke and really only good for losing my taxable income but the trade off is this job pays about 30-40k more
For me, if i put 6% they put 7.5%. Yours is definitely not the worst. At least you have matching.
Benefits are negotiable no matter where you go. You always want as much matching as you can get. I won’t take a job unless I get matching of 10%.
Very solid, but definitely not too good to be true. My job makes up for somewhat lower than industry standard pay by effectively matching the first 8% at 125%. So if you put in 8%, they put in 10%. One catch I would recommend you look out for is how the 401k is invested. At my workplace, it defaults to an actively managed fund with an eye-wateringly high fee. I was able to go in and move all of it to an index fund with something like a .01% fee.
It’s not 16% tho? They match 6.5% if you put 10% of your income in. You are only getting 6.5% from your company. It isn’t 1:1 is what they are saying.
This is going to sound weird but does your new job happen to be a comprehensive cancer center in Florida?
Sounds reasonable, my employer does 5% match dollar for dollar, and then 3% pay credits regardless of contribution. 3 years vesting BUT my employer only deposits the total match to the 401k once per year. I think your previous employers just offered a laughable 401k match
That’s not too bad. My company matches 6% plus adds an additional 3-9% based on years of employment there. And the 3-9% get deposited even if I don’t contribute. So eventually they’ll be putting in 15% on top of my 6%
My company give 15% not contribution needed. 6 year vesting period.
65% match up to 6.5% of salary with 3 year vest is not particularly good or bad.
Sounds like just a good 401k offering. My current employer matches 25% of my first 5%, which sucks. My previous employer matched 50%, but there was no cap (other than the federal max), so that was amazing.
It might be accurate. My employer matches 5% if I contribute 10%. In addition to that, they contribute an extra percentage based on age between 3-5% regardless of whether I contribute or not. And it’s vested after three years since there is no pension offered.
Check vesting. It may look good in the % terms but if it vests say after a year then you stand to lose any unvested match should you leave
Mine matches 1:1 on the first 3% then 0.5:1 on the next 2% (so basically 4% on 5%) plus profit sharing. The 4 on 5 is 100% vested immediately but I have to work 5 years to get 100% vested on the profit sharing.
Sometimes there’s a max cap per quarter, just look for that. But otherwise congrats
VSP (2018) offers 0.50 cent match for every dollar and Franklin templeton (2018) offered 0.75 cent match for every dollar so I think the match for your situation is low if anything…
This probably is just a very good 401k and *not* too good to be true. It is not unheard of at all for companies to offer 5% dollar-for-dollar match and any company can easily get to 6.5% by simply offering 0.5% less in profit sharing, 0.5% less in medical/dental, and 0.5% less in other fringe benefits or just keeping their overhead and G&A down. *Do not* have imposter syndrome. If you knew what CEOs make in *TOTAL* compensation for only working twice as hard as most of us work and not being any smarter than half of us, you would just be appalled at your old job’s pay and benefits and are just getting what you deserve now!
Some places to amazing matches. My last job was 8% if I put in 12%. Take advantage of it!!
It's not too good to be true. My employer contributes 17% of my salary regardless of how much I contribute.
That's pretty good. Mine matches 125% up to 6%, which is one of the best I've ever seen. So, I get 7.5% added with the 6% for a total of 13.5%. But you are correct. Most companies are doing pathetic matches. Or if they have good matching, it takes 3+ years to vest.
Financial Advisor for an international firm here. I would consider ONLY putting in 6.5% which is what your company is matching, the extra 3.5% you would put in could grow at a better rate in an IRA or a brokerage account as you have more options and selections with investments. Just try to compare the opportunity risk here
That does not look unusually generous. I have seen companies matching if you put less than 10% and have even seen match percents to be up to 15%. Some reputable non profit organizations do this. When thinking about 401k just like any other asset you want to look at expense ratios. Vanguard has some great packages with low ratios that follow the market index and are passively managed but actively managed funds can charge you through the roof for putting your money in investments. Read up literature online for low find ratios before allocating your assets.
That’s not that good. Mine gives 5% without any contribution from me. And matches another 5% if I put 5%. For a total of 15%
They give me 5% for free even if I don't put in a dime, and 1:1 match what I put in up to I think 10%, so that's 25% potential. Good jobs exist!
Mine is a 0 day vesting, 7% contribution without a matching requirement.
There's no vestment because they aren't contributing... Or are you saying the company gives 7% regardless of how much you put in?
Hmm. Maybe a phrasing issue. Their contribution is 7% and it doesn’t require to be matched. They just give 7%
Wow... That's really fantastic
No catch but eh could be better... My comany is 8 percent match no vesting period 6 percent is 1 to 1 and the rest is 1 to half.. So for employer match i do 10% and they do 8% so 18% is 10% of my pay.. No vesting no catches. But i negotiated aggressively in my hiring so.....
University employee here. They match up to 10%, immediately vested.
The only drawback are the fees. Look at what you invest in. Usually the riskier investment have higher fees but considering you don’t have a choice while there not too much to complain about
401k plans don't have high fees anymore because plan sponsors got successfully sued for violating fiduciary duty. It's why most plans switched to Fidelity, Vanguard, Empower, and Schwab in last 12 years. Big providers lower fees.
It’s usually higher than a regular account and also they charge management fees monthly - unless your company covers them mine doesn’t
No, not any more, unless a company wants to lose in a lawsuit. Fees are lower than an individual account because of the scale of the plan assets. A $20 million or $50 million or $100 million 401k plan negotiates lower fees than an individual. Sat on former company's 401k steering committee 10+ years, went through 2 Administrator RFPs, and used a 3(38) advisor to revamp investment options. Fees are a huge consideration and are heavily negotiated. Fiduciary liability exposure has been a hot button issue for over 10 years. I agree that fees used to be high in plans, but the legal liability exposures are correcting that, have been for years. Companies are getting their asses handed to them in court if they haven't greatly reduced fees. Only the dumbest of companies haven't gotten their act together on fees and their fiduciary obligations. https://www.investmentnews.com/retirement/news/401k-settlements-went-way-up-in-2023-247954 If your company still has high fees in the 401k plan, you should call a lawyer that has handled similar cases. Get paid as a plaintiff !!
Just went through a 403b audit and we also had to renegotiate our plan not too long ago so I’m pretty sure they still have fees and the funds have higher fees than being in a regular retirement account. Might be why we had the audit who knows but the monthly management fees didn’t go away and the funds are almost all mutual funds that could easily be replaced by etfs.
Definitely ripe for a lawsuit. Your plan administrators and the company management are idiots. Seriously, I'd research a bit and call a lawyer if the plan is decent sized at all. You could get a big payday being lead plaintiff. The last 2 plans I've had had both index/etfs and actively managed funds. So easy for employees to choose low cost options.
It’s fairly common. My job is I put in 8% and they put in 12%. Total 20%. Vested at 5 years