If your employer offers a 401(k) with matching, that's exactly what you're doing.
We were chatting with friends this weekend and the topic got steered to money. (Not by me, actually!) We talked about:
- Starting up an ING Savings Account
- Ways to cut down on the little expenses that eat up your ability to save
- Debt reduction (another family we knew got rid ot $12,000 in credit card debt in about a year!)
- Tax-deferred retirement programs through work
The one program my friend and I are under give up to a 5% contribution from our employer, and my friend wasn't in this program at all. The way it ends up working out is that I put in 5% of my salary, and my employer contributes 5%. So my retirement contribution is doubled, for free.
He didn't say anything when I said it was like throwing away free money by not being enrolled in the program. (Then he proceeded to whip my butt at Super Mario Kart.)
If your employer offers a 401(k) or similar program with matching, try at least to get the maximum match out your employer. If you want to max out your conribution, that's fine. The IRS limit for your contributions (not including your employers matches, if any) is $15,500 for 2008, with an extra $5,000 “catch-up” if you're over 50; these amounts may be limited by your employer, however.
Actually, any matching is better than no matching. Catch some of the free money your employer may be offering you!
Yes you are thowing money away if you are not contributing at least the min. Employer matching is free money as long as you stay with the company long enough for it to be vested
Totes! (As we say at my company.) I have a Roth IRA with $50/month contribution. And at my work we have a Simple IRA w/ 3% matching. Wit my beginner salary, that's only $35/paycheck… but then that's actually like $70/paycheck I'm sending to my future self! Trippy AND neat!
I got started with it as soon as my first 90 days were over. My supervisor told me she's been with the company for 7 years and only started IRA matching about 2 years ago. Just think about those thousands and thousands of dollars… $35/paycheck could be a round of drinks at the bar, or $70 for future you. Think about it!
When I just left university, I was with an employer who matched 4%. Since I've been in New Zealand, it seems there aren't too many perks for employees here, but the government just introduced something to help for retirement. Currently the employer has to match 1%, then 2% next year, 3%, then 4% total. I can't wait 'til I'm back on a 4% match 🙂