401k matching

[sosoo]

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hi i wonder if someone can tell me, for company matching do they match dollar-dollar year after year? or is it a one time matching only? say for CvS pharmacy?

 

[farmadiazepine]

CVS matches you dollar for dollar for the first 5% of eligible pay. If you make gross $5,000 on your paycheck, CVS gives you 5% of $5,000 which is $250 free towards your 401k. If you make $10,000 gross, then CVS gives you $500 free towards your 401k.

If you just started now, you will get all that money in a lump sum in the beginning of next year. Once the new year comes, it will be added in automatically with every paycheck immediately.

 

[pezdispenser]

huh? They match your contribution dollar for dollar one time only when you make that contribution. Your contributions and the match go into your 401(k) account and you choose which funds to invest them in. The value of these funds can then increase (or decrease) earning you even more money.

The dollar for dollar ratio itself should be fairly stable. However, if the company runs into financial trouble, they may choose to save money by reducing the match to say, $0.50 for every $1 you contribute, or eliminate the match altogether.

Although the matching ratio varies from company to company, pharmacists are typically able to get around $6,000-$7,000 in employer matching contributions each year, so do not pass up this free money!

 

[Liberty2010]

Walmart will match up to 6% and you can contribute with matching up to the IRS maximum.

 

[sosoo]

huh? They match your contribution dollar for dollar one time only when you make that contribution.......

...........pharmacists are typically able to get around $6,000-$7,000 in employer matching contributions each year, so do not pass up this free money!

thanks though im still a little confuse. im newly enrolled. so the company matching is a one time only matching and they will never ever match again for any future contributions? or say for example now that im enrolled and contributing 5% for 2012, cvs will match that 5% for 2012.... then comes 2013 and i contribute another 5% for that year, will cvs also match another 5%?

 

[pezdispenser]

Yeah I think I didn't understand your question correctly. Sorry for the confusion. The part I have quoted back to you below is correct.

or say for example now that im enrolled and contributing 5% for 2012, cvs will match that 5% for 2012.... then comes 2013 and i contribute another 5% for that year, will cvs also match another 5%?

 

[sosoo]

sounds nice! with company matching, i basically get around $25,000 in five years for doing nothing? : ) i chose CVS for 100% while most ppl diversify their portfolio. dont know if this is a great move = D

 

[PumpkinSmasher]

sounds nice! with company matching, i basically get around $25,000 in five years for doing nothing? : ) i chose CVS for 100% while most ppl diversify their portfolio. dont know if this is a great move = D

Not a smart move to have 100% of your portfolio in the company that you work for...👎

 

[pezdispenser]

sounds nice! with company matching, i basically get around $25,000 in five years for doing nothing? : ) i chose CVS for 100% while most ppl diversify their portfolio. dont know if this is a great move = D

That's like putting everything on one number in roulette. Not a good move. You should diversify.

Besides, if you want to buy CVS stock, don't you get a discount through the employee stock purchase plan which might work out better for you, even after taxes?

 

[sosoo]

yep im also doing the employee stock purchase plan, but theres a 15% limit that i can purchase. i figure 401k would be an additional 5% of free money. and since the company is matching that much, the earnings can add or subtract from that free amount. i may be a little aggressive on these investments, but i believe CVS is a positively forward looking company in 2012. after i accumulate a fair amount of earnings than i can diversify my portfolio to reduce risk. hope all goes as plan. : )

 

[SWSF]

I know cvs matches dollar per dollar for the first 3% then 1/2 dollar per 1 dollar for the next 2%. It's December and I have not put anything in my 401 k. If I put in 50% of my paycheck now (6 k total), would CVS make up for the difference in matching?

 

[BVE]

before you all go crazy over 401 k, watch this video:

http://www.pbs.org/wgbh/pages/frontline/retirement/world/401k.html

 

[vash1012]

Its not very tax efficient to get company stock in a 401k because of the way capital gains are taxed. It is much better to purchase company stock through stock sharing plans, hold on to it for a year, then sell if you want. You will only pay 15% on the earnings as opposed to the marginal rate, plus with the stock sharing plan discount, you will come out even more ahead. Putting all your 401k in company stock is risky and illogical.