Jun 19

what does this mean???
employer matching contribution
One half of a participant’s elective deferral amount up to 6% of eligible compensation that is deferred. The maximum matching contirbution, therefore is 3% of a participant’s eligible compensation, Any deferrels over 6% of eligible compensation are not matched.

so does that mean I can put in 3% and the company will match it 3% as well to make a maximum of 6%????

or can I make a contribution of 6% and they will match that 6% making a total of 12%??


7 comments so far...

  • trigam41 Said on June 19th, 2010 at 6:51 pm:

    I’m pretty sure it means that you can put in 6% and your employer will match that with 3%.

  • aaaltered468 Said on June 19th, 2010 at 7:45 pm:

    401K is the BEST THING you can do to secure your financial future. It is esentially FREE MONEY. Here is why:
    - You can put up to $15000 in for 2006 that is not taxed. That means your taxable income is reduced by the amount you put away into your 401, up to $15000. Reducing your income reduces how much taxes you pay – FREE MONEY!.
    - Your employer is offering to “match”. If you put away 1%, they out in half a %. If you put in 3%, they put in 1.5%. The most they are offering to match is 6% – you put in 6%, they put in 3%. More FREE MONEY!!!

    These are fairly standard emplyer offerings – mine is the same.

    The thing is to start young. If you start when you are 25, and always put in your manximum contribution, you may very well have a million dollars out away by the time you are in your mid fifties. Remember *you cannot count on Social Security*. If there is anything there for you it may be small. Consider that a bonus at the end, but do not count on living on it! Also, very importantly, more and more employers do not offer a pension so your retirement security is almost completely dependant on your own savings through the 401 program!!!!

    No matter how hard it is to keep up with the contribution you will thank yourself as you get older! I have been fairly faithful in my contributions (less when I was younger and MAX now) and I and looking at retireing at 55. (I will work part time at a leisurely job instead!)

  • Horse loven gal! Said on June 19th, 2010 at 8:38 pm:

    well i know 401k mean 401000 cous k means 1000 or like 5k =5000 7k= 7000!

  • Polymath Said on June 19th, 2010 at 8:46 pm:

    If you put in 4%, company will put in an extra 2%.
    If you put in 6%, company will put in an extra 3%.

    This might be a “safe harbor matching contribution”, where your company can skip some very expensive discrimination tests if they give you some free money.

    This amount is normal for a company contribution. Make sure that you put in at least 6% of your pay – it’s like making a 50% return on your investment! Great!

  • Hoa N Said on June 19th, 2010 at 9:08 pm:

    if you put 6%,your company give you 3%,total 9%
    It’s meant is they match 50 cents on the one dollars up to 6% of your pay, any amount over 6% is your money, but you will save in tax
    Let make simple axample for you to understand
    if you make 1000/week, bi-weekly is 2000, so 6% of your pay is 120 contribute to your 401k, your company match is 60(3% of your pay)
    Yes you could learn invest by yourself. it is your money, you should know how to do with it. for starter check this site out.

    http://www.pathtoinvesting.org/index_fla
    http://www.stockcharts.com
    http://www.streettalklive.com section university. a lot amount of information. It will serve you well
    I accumulate in good amount in 401k at the young age.I could share with you. when consider invest in stock market. you should consider basic 3 things:

    fundamental analysis==(economic data,finincial health, management, business model, competetion)>>what to buy

    technical analysis==(chart+indicator)>> when to buy

    Sentiment/schycho analysis==>>mood of investor, Contrarian point of view.
    Market cycle===>> check out book Trader Almanac by jeff hirsch will give you inside stuff
    When you combine 3 thing, It is one of the powerful knowledge goinh with you for the rest of your live

    At the age of 32. my 401k is amassed 75,000.00 and 30000.00 in taxble account. by follow simple rule

    You could contribute extra up to 15000 by IRS limit in 2006( meaning you could contribute up to 576/pay period)

  • stock.geek Said on June 19th, 2010 at 9:18 pm:

    Hi, i suggest a great site with plenty of Issues related to your Investing and everything around it. it also provide clear and accurate answer to many common questions.

    I am sure that you can get your answers in this website.

    http://investing.sitesled.com/

    Good Luck and Best Wishes!

  • Ray L. Said on June 19th, 2010 at 9:49 pm:

    Actualy it is called a “Section 401(k) Plans”. The numbers and the letter is nothing more than a IRS (Internal Revenue Service) Code; simply put; 401(k).

    These plans are employer-sponsored retirement plans that allow employees to contribute and invest pre-tax dollars into a number of various investment vehicles provided by the employer, for example, mutual funds, annuities and/or life insurance, fixed income contracts).

    There are many advantages to 401(k) plans; basically almost the whole plan is free money.. The employers, most of the time, match the employee’s contributions up to a certain dollar amount. These monies grow tax-deferred (tax-free); hence, lowering both the employer’s and employee’s taxable income, e.g., John makes $50,000/yr, he puts $4,000 in his 401(k), now he will only show $46,000 in his taxes; he won’t be taxed as much. Can you say free money. Only $15,000/yr is tax-defered from your employer’s contribution.

    Your case (Let’s break it down):
    “One half of a participant’s elective dererral amount up to 6% of eligible compensation that is deffered.” So that means they (employer/corporation) gives the participant (you) 1/2 (3%) of the elective defferral (employee contribution) amount up to 6% of your pay.

    “The maximum matching contribution, therefore is 3% of a participant’s eligible compensation. Any defferals over 6% of eligible compensation are not matched.” You may put as much money as you want in your 401(k) (I recommend you should put as much as possible, unless you have other IRAs or Long term investments), but only 3% of it will be matched. Basically you’ll get $0.50 to the dollar up to 6% of your pay. If you put more than 6% it will not recieve any contribution from your employer, but it will grow.

    Example:
    Let’s say you make $1,000/wk. You put away 6% of $1,000 = $60/wk. Your employer will give you 3% of $1,000 = $30/wk. For a grand total of $90/wk. That’s $4,500/yr. with two weeks unpaid vacation. That’s approximately $45,000 in 10 years; this doesn’t count the intrest over the 10 years.

    As a financial analyst I recommend you put at least 6% of your pay in the 401(k) and 4-9% in other investments such as emergency accounts, money markets, mutual funds, IRAs, variable annuaties, but not life insurance; life insurance should never be an “investment” it should never have savings; it’s income protection.

    Good Luck

    Disclaimer: You should get a personal fianacial analyst or read a great deal of reputable money/investment books, not rely FULLY on my recommendations, to gain knowledge on your level of finances; I cannot “see” your situation; therefore I cannot give any gurantees.

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