Employer matches 3,000 401k?
So my new employer matches 3,000 a year for 401K. I used to a percent match not a dollar amount. 2 questions. In today world is 3K a good match or poor? Also how can i figure of what percent I should give to 401K so I at least get that 3K match?
Answers & Comments
Is $3,000 a good match?? It depends on how much you earn. If you only earn $10,000 per year and you somehow contribute $3,000 into your 401k, then your employer will match it. That's a 30% match! Pretty good...
However if you currently make $100,000 per year and you put $3,000 into your 401k, then you are only getting a 3% match, which is pretty standard - if not a bit below average.
To figure out the percentage you would need to contribute, you first need to figure how much you make. You would want to multiply your salary by some percentage in order to end up contributing $3,000 total. Algebraically it would be this:
$3,000 / your salary = match percent
So if you made $30,000 per year then you would need to contribute 10% of your salary to meet your employer's match.
In all I would say that $3,000 is probably a decent match assuming you aren't making a ton of money. Take advantage of it - you should try to save as much as you can. Try to meet the $3,000 employer match, if you can save more - open an IRA and add to that.
Good luck!
Any match is good. And I would say 3k is better than most. Your employer makes the decision on how much you have to contribute to get that.
I don't know how old you are (that makes a difference) on your contribution. But I would do at least 10%.
I don't know of anyone complaining - wow, I've got too much money in my 401k - when they retire. And even if they do, It's not a bad problem to have!!
Any match is a good match and it is what it is - free money. Just forget the percentage thing. Besides we don't know your gross or take-home pay anyway. Go to the payroll clerk and tell her/him you want a total of $3,000 for the year taken from your pay and put into the 401k. Ask her/him how much that will be per pay period. Then tell her/him to do it. She/he has to initiate it anyway.
$3K is not a bad deal at all depending on your income. It would be 3% of $100,000 per year for example, 6% of $50,000 income per year. To figure it out, take your expected income, then divide 3K into it. For instance if you think you will make $36,000 then that is 3/36 = 8.3%