Simple Debt-Free Finance

A Simple Approach to Getting Out of Debt & Into Wealth

Employers cutting 401(k) match contributions.

Posted on | May 22, 2009 |

Here’s a story near and not so dear to my heart titled, How Much You Lose When Your Employer Cuts Your 401(k) Match

It hit close to home because a few weeks ago I received an email from my corporate masters informing me that 401(k) matching contributions were “on hold indefinitely” so as to provide the flexibility required to “navigate these unprecedented economic times.” This was a week after they announced that there would be a wage-freeze and bonuses “across the board” would be eliminated.

I’m not alone, it would seem.

The article provides some depressing figures on just how much less you have at retirement without an employer match. It seems a little like a WAG to me because there are A LOT of assumptions involved like average rate of return, whether the employee will stop contributing to his 401(k) altogether, etc.. but the article does outline 3 actions an employee faced with the elimination of his company’s match can take:

1. Save more.
2. Consider a Roth IRA.
3. Don’t cash out.

What would you do? (Read the details of each action here)

Me? I opted for #1. It wasn’t as hard a choice as I thought it would be, since the market had pretty much bottomed out by the time I had to take action. I like the idea of buying more stocks at what I’m sure will have been historic lows by the time I retire. So I jacked up my contribution rate to what it was with the employer match included. Still, I wish I had that match…

Bookmark and Share
Related Posts Related Websites

Comments

One Response to “Employers cutting 401(k) match contributions.”

  1. 2009, year in review.
    March 3rd, 2010 @ 7:49 am

    [...] workers, like myself, saw their company contributions to 401(k) plans cut or “temporarily” suspended. My response to that was to give my 401(k) some TLC, a move [...]

Leave a Reply





  • Search

  • Get Updates

  • Recent Comments

  • Tags

  • Contact

    If comments aren't enough, feel free to contact me at:

  • Blog Catalog Visitors

  • Disclaimer

    The information and opinions provided on this site do not constitute professional advice. This blog is intended to provide general information only about the author's own personal financial journey. While all information shared here is believed to be accurate, the owner/operator of this website specifically disclaims all warranties expressed, implied or statutory, regarding the accuracy, timeliness, and/or completeness of the information contained herein. You are advised to discuss your specific requirements with an independent financial adviser. All posts are © 2008-2011, Simple Debt Free Finance.
  • Unique visits since 2008:

  • ss_blog_claim=f34d742cbb91cfd8bb6b4f0e010113be ss_blog_claim=f34d742cbb91cfd8bb6b4f0e010113be
  • Useful Links: