Company Matching 401(k) Plans??

**steve-in-kville** · 10-05-2007, 06:18 PM

I am eligable to contribute to our company's 401(k) program. They will match .25 cents for every dollar I put in, up to a certain amount. I am in the process up building up my EF, so any extra cash goes towards that at the moment.

However, I do not care to loose out on "free money," so, my question is, how high of a priority should contributions to my 401(k) be?

I welcome any comments.

**leezza** · 10-05-2007, 07:00 PM

I would put the Max amount that they will match or add to if you can, that is free money, (so to speak).

JMHO,
leezza

**Momof4cats** · 10-05-2007, 08:11 PM

Per Dave Ramsey's rules, retirement isn't until baby step number 4. That being said, even though I'm also working on number 1, my employer matches $50 a month so I'm putting that amount in, but no more. Also, I have a pension plan with my employer, so I'm not relying solely on a 401(k) for retirement.

What's the amount they'll go up to?

**frugalfarmwife** · 10-05-2007, 08:39 PM

I'd go for the 401k also, free money is free money, and your contribution is pre-tax, so will not effect your income as much.

Hubbies company matches up to 3% then 1/2 up to 6%, we contribute 5% of his income to it. We also have railroad retirement.

kj

**sdrjeolsen** · 10-05-2007, 09:47 PM

If it were me, If possible, I'd contribute the max that they would match. My dh's company used to match, but things got tight and matching was one of the first things to get cut. I'd get it while the getting is there....besides, its free money. Is it possible to make a sacrifice in another are to continue building the EF?

Look at it this way. If you give up something that costs 50.00 and you get to put that into the 401K its an extra 12.50 plus the interest over ?? years. If you spent the 50 instead, the item you are spending it on really is costing you 62.50, not only that but the 12.50 is tax free, so the before tax value would be even more.

**Telephus44** · 10-06-2007, 09:12 PM

Put it whatever you can to get the match, but I wouldn't max it out if you have other priorities. DH and I are doing that now in our respective 401(K)'s - after we have a down payment for a house, we'll up our 401K contributions.

**Telephus44** · 10-06-2007, 09:14 PM

Also, since your contribution isn't taxed - say you put $50 a month in your 401K - if you didn't, then in addition to missing out on the $12.50 free money, you're also only taking home an additional $36 if you're in the 28% tax bracket.