cvs 401k update

[sosoo]

i used to have 100% of my 401k in cvs stocks for the past year.. all of a sudden i recently checked myHR and it says the max contribution to cvs stock is 20%. they automatically put 80% to "moderate lifestyle" without my acknowledgement. isn't that illegal? i either go for cvs stocks or US bonds. i never did any research on "moderate lifestyle" and i never knew what the crap it is. one stupid thing in its portfolio is international investment. how stupid is that? with south america in turmoil, china slowdown (and investment firms pulling money out of china), and europe is hanging by a thread, why the hell would they automatically put 80% of my investment into the f*king "moderate lifestyle" ?

i believe this happened in the recent 1-2 months. good thing i check on it now and then. now that cvs stock is max at 20%, i transferred everything to US bond. every penny.

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[confettiflyer]

mmmmk

 

[Dred Pirate]

i used to have 100% of my 401k in cvs stocks for the past year.. all of a sudden i recently checked myHR and it says the max contribution to cvs stock is 20%. they automatically put 80% to "moderate lifestyle" without my acknowledgement. isn't that illegal? i either go for cvs stocks or US bonds. i never did any research on "moderate lifestyle" and i never knew what the crap it is. one stupid thing in its portfolio is international investment. how stupid is that? with south america in turmoil, china slowdown (and investment firms pulling money out of china), and europe is hanging by a thread, why the hell would they automatically put 80% of my investment into the f*king "moderate lifestyle" ?

i believe this happened in the recent 1-2 months. good thing i check on it now and then. now that cvs stock is max at 20%, i transferred everything to US bond. every penny.

you obviously know nothing about investing and proper asset allocation.

 

[MindGeek]

If the value of 'moderate lifestyle' had increased in between when they invested you and when you noticed they invested you would you still be complaining?

 

[zelman]

There was a mailing that went out about this.

 

[Dred Pirate]

The fact that the op thinks us savings bonds is te alternative to 100% company stock is like supporting Donald trump then thinking Bernie sanders is his second choice. Complete opposite ends of the spectrum.

 

[sosoo]

the frustration here is i don't know what the crap "moderate lifestyle" is. i did not choose it. and definitely not at a huge chunk 80%. i elected what i elected and that was 100% cvs stock. i never receive letters or notices of this change.

 

[pharmdpharmd]

You should speak to a financial adviser ASAP.. 100% bonds or 100% cvs stocks is horrible decisions.

Go to a financial adviser and a if u don't like what s/he says go to another one, if both said the same thing.. Then do it and don't worry about it.

Don't listen to advice from this forum as well, some people say ridiculous stuff as well (I.E the world in going to end next week and have everything in gold)

 

[confettiflyer]

Chinese proverb: "A fool and his money are soon parted."

 

[BMBiology]

Let him be. If he had put all of his money in US bonds or CVS stock, he would still do better than the S&P 500 year to date.

 

[confettiflyer]

Let him be. If he had put all of his money in US bonds or CVS stock, he would still do better than the S&P 500 year to date.

but...but...it's ILLEGAL! lol

 

[Momus]

Hahaha op you made me laugh... Read a finance book please. CVS actually did you a huge favor and the moment you changed it, you fu3ked it up royally.

 

[WVUPharm2007]

Diversify, man. Something like 40% in large caps, 30% in medium cap, 20% in small cap, 5% in CVS, 5% in bonds.

 

[ldiot]

Here's a question.

CVS matches 5%. Say you make 10k a year as a tech and become eligible for the 401k mid year. This means you are eligible for a $500 dollar match if you contribute $500+. Or will they only match up to 5% of what you make AFTER you become eligible for the 401k? (~$250)

I put my contribution at 10% when I became eligible in order to reach an overall contribution rate of 5% for the year. But of the 10% I contributed they only matched half of it (5%). I was thinking at the end of the quarter they would contribute the extra but they never did. Am I getting screwed or was I only eligible for a 5% match on the earnings I made after I acquired the 401k account?

 

[zelman]

Here's a question.

CVS matches 5%. Say you make 10k a year as a tech and become eligible for the 401k mid year. This means you are eligible for a $500 dollar match if you contribute $500+. Or will they only match up to 5% of what you make AFTER you become eligible for the 401k? (~$250)

I put my contribution at 10% when I became eligible in order to reach an overall contribution rate of 5% for the year. But of the 10% I contributed they only matched half of it (5%). I was thinking at the end of the quarter they would contribute the extra but they never did. Am I getting screwed or was I only eligible for a 5% match on the earnings I made after I acquired the 401k account?

It's 5% of an individual paycheck, not based on a yearly total.

 

[ldiot]

It's 5% of an individual paycheck, not based on a yearly total.

Oh okay thanks. What if I contribute the full 18k in the first 6 months of the year and they only match 5% of my paycheck? Would they make this up later in the year? Because I would only be getting a 5% match for half of my paychecks as opposed to all of them even though I am still contributing well over 5% of my net income for the year

 

[zelman]

Oh okay thanks. What if I contribute the full 18k in the first 6 months of the year and they only match 5% of my paycheck? Would they make this up later in the year? Because I would only be getting a 5% match for half of my paychecks as opposed to all of them even though I am still contributing well over 5% of my net income for the year

That's a good question.

My intuition says that you would lose out on the match, because later in the year there is no contribution to match.

But you should probably ask HR to be sure.

 

[Dred Pirate]

Oh okay thanks. What if I contribute the full 18k in the first 6 months of the year and they only match 5% of my paycheck? Would they make this up later in the year? Because I would only be getting a 5% match for half of my paychecks as opposed to all of them even though I am still contributing well over 5% of my net income for the year

no company that I know of would match it later - that is why you want to hit the 18k on the last paycheck

 

[wagrxm2000]

In general the match is 5% of your yearly paycheck. It does not matter when you contribute it. So a person making 120k at 5% will need to contribute 6k at any point during the year to get the full match and do not have to spread it out. Companies do it differently where there is a catch up later but you will get the full match if you contribute the 6k in the first few paychecks or spread it out.

 

[owlegrad]

Wasn't this recently asked and answered?

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[Old Timer]

They match 5% of your earnings. Lets say you earn $1,000.00 per week.

You contribute 10% or $100.00. They contribute 5% or $50.00.

 

[ldiot]

In general the match is 5% of your yearly paycheck. It does not matter when you contribute it. So a person making 120k at 5% will need to contribute 6k at any point during the year to get the full match and do not have to spread it out. Companies do it differently where there is a catch up later but you will get the full match if you contribute the 6k in the first few paychecks or spread it out.

After reading about it online it looks like they pay out any additional match on a quarterly basis (if needed) in addition to the 5% per paycheck so this appears to be true. Thanks!

So if I make 10k in a paycheck and contribute $3,000, they will match 5% of my total paycheck which is $500. If I contribute nothing for the rest of the quarter and make $50,000 in that quarter gross income, they will go back at the end of the quarter and add an additional $2,000 to the match.

Since 5% of 50,000 is 2,500. I contributed over 5% ($3,000) and already received $500 in matches so $2,500-$500=$2000 they will deposit at the end of the quarter.

 

[Old Timer]

After reading about it online it looks like they pay out any additional match on a quarterly basis (if needed) in addition to the 5% per paycheck so this appears to be true. Thanks!

So if I make 10k in a paycheck and contribute $3,000, they will match 5% of my total paycheck which is $500. If I contribute nothing for the rest of the quarter and make $50,000 in that quarter gross income, they will go back at the end of the quarter and add an additional $2,000 to the match.

Since 5% of 50,000 is 2,500. I contributed over 5% ($3,000) and already received $500 in matches so $2,500-$500=$2000 they will deposit at the end of the quarter.

NO. They take it out of each and every check. There is nothing to make up....

 

[Dr Wario]

To put this to rest yet again...

From the CVS future fund plan document...


Another important advantage of saving in the Plan is that the Company matches your traditional and/or Roth contributions. You are eligible for matching contributions as of the first paycheck of the month on or after you complete one year of service with CVS Health. Special eligibility rules may apply if you were eligible to participate in another plan that merged with Future Fund. Once you meet the one-year service requirement, the Company matches 100% of your traditional and/or Roth contributions during the plan year, up to 5% of your eligible pay. Note that in the first year you become eligible to receive matching contributions, your Company match for that plan year is based only on your contributions and pay earned after you meet the service requirement. All matching contributions will be deposited quarterly based on the eligible contributions you made to the Plan for each payroll period during that quarter. Company matching contributions will be made in cash and invested according to your investment elections at the time of deposit. Over the course of the year, you may decide to change your contribution rate, which could affect the matching contributions you receive each quarter. If this is the case, after the close of the plan year (or your separation from service with CVS Health, if earlier), the Plan’s true-up feature will ensure that you receive your full matching contribution. Please note: For the first year in which you become eligible to receive matching contributions, your maximum amount of Company match is determined on eligible pay earned after meeting the match eligibility requirements. Any pay earned prior to meeting the Company match eligibility requirement is not eligible for matching contributions. You will receive a true-up matching contribution if the amount of matching contributions posted to your account 8 FUTURE FUND ONLINE: myHR.cvs.com (follow links) or directly at www.benefitsweb.com/cvs.html after meeting the eligibility requirements is less than the full amount of Company match for which you are eligible. In future years, your full annual eligible pay is considered when determining the maximum amount of Company matching contributions for which you are eligible to receive. I

 

[BMBiology]

Let's bring this settled topic back q1month

 

[ldiot]

NO. They take it out of each and every check. There is nothing to make up....

You have no idea what you're talking about. They will contribute a MAX of 5% per paycheck, which could result in a match of less than 5% at the end of the quarter if you're contribution rate isn't constant. They will make up the deficit at the end of the quarter.

Ex.
You make 10,000 in one paycheck contributing 10% than 10,000 in the next paycheck contributing 0%

They will match 5% of 10,000 meaning you contributed 1,000 and they contributed 500. But your total earnings were 20,000. 5% of 20,000 is 1,000. They only matched 500 on the per paycheck basis, so at the end of the quarter the true-up thing will result in an extra 500 being added to the match. Resulting in a total personal contribution of 1,000 and a total match of 1,000.

 

[Old Timer]

You have no idea what you're talking about. They will contribute a MAX of 5% per paycheck, which could result in a match of less than 5% at the end of the quarter if you're contribution rate isn't constant. They will make up the deficit at the end of the quarter.

Ex.
You make 10,000 in one paycheck contributing 10% than 10,000 in the next paycheck contributing 0%

This happens like in about 0.00000000000000000000000000000000000000000000000000000001% of the cases. Who goes in and changes their contribution every 5 minutes. In the real world, this never happens.....

 

[ldiot]

This happens like in about 0.00000000000000000000000000000000000000000000000000000001% of the cases. Who goes in and changes their contribution every 5 minutes. In the real world, this never happens.....

That wasn't the point of this discussion but okay? What if I hit the 18k limit before the end of the year? It becomes relevant then... but I guess 0.0000001% of people max out their 401k or even care about investing so you're right in that sense. But there's no need to get defensive when you are flat out wrong... and don't fault someone for actually wanting to understand how their investment account works because it's not like it's important...

 

[Old Timer]

That wasn't the point of this discussion but okay? What if I hit the 18k limit before the end of the year? It becomes relevant then... but I guess 0.0000001% of people max out their 401k or even care about investing so you're right in that sense. But there's no need to get defensive when you are flat out wrong... and don't fault someone for actually wanting to understand how their investment account works because it's not like it's important...

If you hit the limit, it will stop. This is about starting and then stopping again. How are you going to hit the limit if you start and stop. Just because something could happen, doesn't mean it is likely to happen. For most people this is an esoteric discussion.

 

[HouTX]

OT, you're flat out wrong. the idiot got you

 

[wagrxm2000]

You guys just need to keep it simple. 120k a year at 5% is a match of 6k. Once you put in 6k, your match will be completed. It doesn't matter when you contribute during the year, 6k is 6k.

 

[Old Timer]

OT, you're flat out wrong. the idiot got you

Really. Tell me you know plenty of people who go in and chnage their contribution rate. There might 3 in the whole company. I stand by what I said. 99.99999999999999999999999999999999% of all people set their match and leave it alone. For the 0.0000000000000000000000000000000000000000000000001% who monkey with their contribution they have a catch up mechanism. SO WHAT. IRL, this affects nobody.

 

[Momus]

In my circle, I know 4 people that changed contribution as year goes by. I normally contributed 70% and the past 7 years I maxed out in the middle to end of Feb. Not this year tho, because my job might change, so I changed it to 0% in anticipation of job code change or a possible new job this year. First pay check of the year, my 401k got $7000+ influx though, wasn't fast enough to make the change.

So yes, the detail is relevant how the match got distributed.

 

[Dr Wario]

You guys just need to keep it simple. 120k a year at 5% is a match of 6k. Once you put in 6k, your match will be completed. It doesn't matter when you contribute during the year, 6k is 6k.

This is absolutely correct, but be careful because not all companies will necessarily operate this way and may only calculate matching on a per paycheck basis. The only thing to understand is that the match is only calculated on your eligible salary for the year, so if your yearly salary is 120k and you put in 6k the first month and then leave, the match will not be 6k but only $500. If you stay for the entire year but max your 401k in the first 3 months, your first quarter match will be 1500, and then you will receive nothing until the end of the year at which time you will get the true up contribution of 4500.

 

[sosoo]

good thing i moved 100% into bond... cvs stocks went down to $89. anything else (small cap, large cap, moderate lifestyle, etc) that's involved with the stock market is crashing.

 

[Dred Pirate]

Really. Tell me you know plenty of people who go in and chnage their contribution rate. There might 3 in the whole company. I stand by what I said. 99.99999999999999999999999999999999% of all people set their match and leave it alone. For the 0.0000000000000000000000000000000000000000000000001% who monkey with their contribution they have a catch up mechanism. SO WHAT. IRL, this affects nobody.

I adjust mine multiple times during the year to account for overtime, etc. I want to hit the max contribution on the last paycheck of the year so i get my company's full match. I calculated I need to contribute about 13.5% over the coarse of the year - so I put it at 13%, then when I get an overtime check, I bump it up to 14% for that paycheck (we don't have a lot of OT opportunities where I work) - then hopefully come december I may increase the last check to ensure I hit my max. This may seem silly, but hey, it is what I do

 

[Old Timer]

I also adjust multiple times per year. I always keep enough to get the match.

I surrender. I see no reason to this kind of thing. I keep my rate at 5% to get the match. If I could afford more, I would, but alas, I can't. So if you guys want to switch around every 30 seconds, live and be well

 

[Dred Pirate]

I surrender. I see no reason to this kind of thing. I keep my rate at 5% to get the match. If I could afford more, I would, but alas, I can't. So if you guys want to switch around every 30 seconds, live and be well

it has to do with getting the maximum contribution from your company - mine matches 50% of every dollar - BUT only up to my contribution of 10% - we want to make sure we get the IRS max of 18k a year but also that we get our companies max contribution (which at mine, unlike CVS, is only matches to the 10% on EACH paycheck, not the year to date) Therefore, I want to squeeze every dollar from my employer AND the US government - and since my check isn't the exact same every two weeks with shift dif and OT - we are forced to play that game.

 

[wagrxm2000]

Sounds like people are arguing about how their company does their match. If your company doesn't match by total contributed but instead by paycheck then you might want to consider talking to someone who can confirm this. This is a foolish way to match and I doubt too many companies do this. (Ive never heard of any major companies) If anyone here could post documentation about this I'd appreciate it since I really can't believe any company would do this.

Your typical company matches total contributed not per paycheck so you don't have to worry about adjusting. So again $120k income at 5% is $6000 for match and it doesn't matter when you add it just so no one reads this thread and gets confused.

 

[Old Timer]

it has to do with getting the maximum contribution from your company - mine matches 50% of every dollar - BUT only up to my contribution of 10% - we want to make sure we get the IRS max of 18k a year but also that we get our companies max contribution (which at mine, unlike CVS, is only matches to the 10% on EACH paycheck, not the year to date) Therefore, I want to squeeze every dollar from my employer AND the US government - and since my check isn't the exact same every two weeks with shift dif and OT - we are forced to play that game.

Of course the title of the thread is : cvs 401k update

 

[Dred Pirate]

Of course the title of the thread is : cvs 401k update

you as much as anyone know our threads go off on tangents -

 

[ldiot]

Of course the title of the thread is : cvs 401k update

Yeah the thread says cvs 401k update and what you said about CVS was false.

 

[Momus]

it has to do with getting the maximum contribution from your company - mine matches 50% of every dollar - BUT only up to my contribution of 10% - we want to make sure we get the IRS max of 18k a year but also that we get our companies max contribution (which at mine, unlike CVS, is only matches to the 10% on EACH paycheck, not the year to date) Therefore, I want to squeeze every dollar from my employer AND the US government - and since my check isn't the exact same every two weeks with shift dif and OT - we are forced to play that game.

On each paycheck would suck... I would double check this before I believe it.

 

[Dred Pirate]

On each paycheck would suck... I would double check this before I believe it.

I have - but it also only takes me 30 seconds to log on and make the change - not like at CVS where you have to send in a from (or at least that what it was when I moonlighted for them)

 

[confettiflyer]

I constantly rejigger (4-6x a year) to ensure I hit the maximum allowed by law and not leave any matching contributions on the table.


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[Old Timer]

I constantly rejigger (4-6x a year) to ensure I hit the maximum allowed by law and not leave any matching contributions on the table.


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I don't understand. It makes no sense to me. Your legal max is always more than the match. Unless there is income that does not have 401K taken out, I just don't see it.

 

[confettiflyer]

I don't understand. It makes no sense to me. Your legal max is always more than the match. Unless there is income that does not have 401K taken out, I just don't see it.

What happens is I set my % at the beginning of the year....then say I get tons of OT in June or July, so I start approaching my $18k maximum much sooner than December.

If I don't adjust...I hit $18,000 in November and get "locked out" of my account, meaning I can't contribute anymore until January 1st, meaning whatever % matched each pay period (this is the part that differs between employers, some match each pay period w/ each contribution, some will give you one big fat match at the end of the year) becomes zero, because it is tied to contribution. No contribution that period = no match given.

Remember, my maximum might be $18,000, but the aggregate maximum for employer + employee = $52,500. It would behoove me to contribute in each and every pay period to obtain the matching funds.

I can't remember if CVS (or if it was Wags) matched x % in one lump sum...in that case, yes, it makes no sense to adjust because at the end of the year they'll just take x% of your total salary and match it.

 

[ldiot]

Bottom line is if you hit 18k before the last paycheck nothing is taken out of the latter paychecks thus no match. So you could potentially contribute 18k and not get a full 5% match... unless there is a quarterly adjustment.

If you can do a set amount rather than a percentage it would solve this OT problem, CVS allows a set number. But it doesn't matter at CVS anyways because they fix it.

 

[angryrx]

i used to have 100% of my 401k in cvs stocks for the past year.. all of a sudden i recently checked myHR and it says the max contribution to cvs stock is 20%. they automatically put 80% to "moderate lifestyle" without my acknowledgement. isn't that illegal? i either go for cvs stocks or US bonds. i never did any research on "moderate lifestyle" and i never knew what the crap it is. one stupid thing in its portfolio is international investment. how stupid is that? with south america in turmoil, china slowdown (and investment firms pulling money out of china), and europe is hanging by a thread, why the hell would they automatically put 80% of my investment into the f*king "moderate lifestyle" ?

i believe this happened in the recent 1-2 months. good thing i check on it now and then. now that cvs stock is max at 20%, i transferred everything to US bond. every penny.

WOW. You are the exact reason why I tell every pharmacy intern with half a brain (so about 25% of my interns) to learn as much about money as possible so they are prepared when they earn a real income. Good luck to you in life, I hope you can still count to 30, 60, 90 when you are 70, if you haven't been replaced by robots then.

 

[wagrxm2000]

Bottom line is if you hit 18k before the last paycheck nothing is taken out of the latter paychecks thus no match. So you could potentially contribute 18k and not get a full 5% match... unless there is a quarterly adjustment.

If you can do a set amount rather than a percentage it would solve this OT problem, CVS allows a set number. But it doesn't matter at CVS anyways because they fix it.

Once again just to make sure no one is confused, your typically company's match, it doesnt matter when you contribute.