Beginning January 1, 2010, the maximum 401(k) Savings Plan employer match increases from 3.5 percent to 4 percent of your eligible pay.
The Plan makes saving for your future easy and convenient with automatic payroll deductions. Plus, by participating, you can reduce taxable income because contributions are made before most taxes are taken out of your pay. Beginning January 1, 2010, there is even more to like with an increased company match.
For those who enjoy details, here is how the increased match will work:
| Percentage of Eligible Pay You Save | Company Contribution |
| First 1% | $1.00 for each $1.00 you contribute |
|
PLUS
|
|
| From 2-3% | $0.75 for each $1.00 you contribute |
|
PLUS
|
|
| From 4-6% | $0.50 for each $1.00 you contribute |
The company will contribute $1 for each $1 you save, up to 1 percent of eligible pay. The company will then contribute 75 cents for each $1 you save from 2 to 3 percent of eligible pay, and 50 cents for each $1 you save from 4 to 6 percent of eligible pay.
I’ve been contributing 10% since February and I reached my one year anniversary in March, so I’ve been getting the maximum match from the company for a while now, but I’m pleased as punch to hear that the match is increasing next year. Even if it’s just a little bit…Free money is free money!
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{ 2 comments… read them below or add one }
My company cut our 401k matches in half “temporarily”. It was and still is fairly generous. I’m coming up on my 1-year anniversary.
Pre-cut it was:
0-1 years service
None
1-5 years service
0-8% $0.50 for each $1.00 you contribute
5+ years service
0-8% $1.00 for each $1.00 you contribute
Now, it is “temporarily”:
0-1 years service
None
1-5 years service
0-8% $0.25 for each $1.00 you contribute
5+ years service
0-8% $0.5 for each $1.00 you contribute
I currently contribute only 2% due to being focused on debt reduction, I was planning on increasing to 8% on my anniversary to get the full effect of the match, but with my employer’s love for furloughs, I’m not sure we could meet our monthly expenses & debt payments at that level.
Oh, and of course, a 15-20% increase in health/dental benefits premiums next year.
Lucky! Ours was completely discontinued last year. [sigh] Good thing you’re taking advantage of it, too. Our used to be 50% of the first 6% you contributed. Not “spectacular”, but nice, nonetheless. If we still had it I’d definitely be contributing more than the 2% I contribute now. (I contribute 8% to my Roth IRA)