Average Retirement Contribution

[Oldfart]

The OP didn't ask about our pension.

Wrong..

Vanguard has consistently been one of the top rated and, even MORE important, their fees are among the lowest around. IF you wanted to invest more into a retirement fund, you should contribute only up to what the company will match (6%) and then start a separate account, either another standard 401K or Roth.

If you want to contribute more than 6%, you can just contribute more into your 401k at work. No need to start an IRA outside of your 401K unless you didn't like your fund options that Vanguard gives you. I dropped my 401K contribution down to 6% a few years back and put the rest of my contribution into a Roth. I got hammered on income taxes so bad that my CPA told me to reverse my decision. Even though a Roth is nontaxed when you draw it, he showed me that in my situation, it was not the correct move. For others, a large Roth might be best. Every situation is different.

 

[Oldfart]

Next to nothing.

12% to 14% of your annual income put into a plan that is totally paid by the company is "next to nothing"?

 

[MAKAVELI]

12% to 14% of your annual income put into a plan that is totally paid by the company is "next to nothing"?

For a retirement plan, yes it is.

 

[Oldfart]

For a retirement plan, yes it is.

Everyone has an opinion.

 

[zerocool5468]

To clarify the company funded portable pension is totally separate from the 401k and is entirely funded by the company? I was on retirement.fedex.com earlier and its a crapshoot trying to find any good information on it. Same for a lot of the threads on here which seem to devolve into mush quite quickly I did find that you're not eligible for the pension until 1000 hours of service.

 

[Oldfart]

To clarify the company funded portable pension is totally separate from the 401k and is entirely funded by the company? I was on retirement.fedex.com earlier and its a crapshoot trying to find any good information on it. Same for a lot of the threads on here which seem to devolve into mush quite quickly I did find that you're not eligible for the pension until 1000 hours of service.

You are correct. The Portable and the 401K are totally separate. The Portable is 100% company funded and the 401k is optional with up to 3.5% match to your 6% contribution. I also believe you are correct on the 1000 hr rule but I could be wrong.

Post any questions you have and someone will answer them. You just have to ignore the miserable people on here that bash any and everything company related.

 

[abused.crr]

I'll be backing down on the 401k this year. Going from 15 to 6%. I want to start investing in more tangible things. I'll be buying a second piece of land.

 

[Maui]

You are correct. The Portable and the 401K are totally separate. The Portable is 100% company funded and the 401k is optional with up to 3.5% match to your 6% contribution. I also believe you are correct on the 1000 hr rule but I could be wrong.

Post any questions you have and someone will answer them. You just have to ignore the miserable people on here that bash any and everything company related.

This is correct.
Portable pension requires 1000 hours to receive compensations credit. That credit is a percentage of the hours worked in a given year. If your age + years of service is under 55, then the amount is, I think 5% and goes up to 8 or 9%. You also earn interest credits about 4% right now.

The 401K automatically opts new hires in at 3% and increases annually by 1% until it maxes at 10%. The default investment is a Vanguard Target Retirement Fund. FedEx matches 100% of your first 1% and 50% of the next 5% - that's where the 3.5% match comes from. There is no minimum number of hours worked for 401K match and the contribution.

The catch is that I think you have to be 21 for both plans.

I agree with you that whether or not to invest in Roth is somewhat individual. I like tax-free withdrawals in retirement, but I also like the tax-reduction of maxing out 401K contributions. Ideally, one could save $5500/year in a Roth and max out 401K at 18k, which is close to impossible for new hires.

 

[Oldfart]

This is correct.
Portable pension requires 1000 hours to receive compensations credit. That credit is a percentage of the hours worked in a given year. If your age + years of service is under 55, then the amount is, I think 5% and goes up to 8 or 9%. You also earn interest credits about 4% right now.

The 401K automatically opts new hires in at 3% and increases annually by 1% until it maxes at 10%. The default investment is a Vanguard Target Retirement Fund. FedEx matches 100% of your first 1% and 50% of the next 5% - that's where the 3.5% match comes from. There is no minimum number of hours worked for 401K match and the contribution.

The catch is that I think you have to be 21 for both plans.

I agree with you that whether or not to invest in Roth is somewhat individual. I like tax-free withdrawals in retirement, but I also like the tax-reduction of maxing out 401K contributions. Ideally, one could save $5500/year in a Roth and max out 401K at 18k, which is close to impossible for new hires.

I got caught up in that requirement years ago. I started at 18 and missed 2 1/2 very good years of pension contributions. The 401k had not been created yet so that didn't hinder me. I believe I had to wait before I could get into the RSP and OSP plans as well. Too long ago to remember.

 

[FedExMan]

FedEx matches 100% of your first 1% and 50% of the next 5%.

Someone care to further explain this with maybe two different examples?

 

[UpstateNYUPSer(Ret)]

FedEx matches 100% of your first 1% and 50% of the next 5%.

Someone care to further explain this with maybe two different examples?

Quite simple---you put in 6%, they put in 3.5%.

 

[vantexan]

FedEx matches 100% of your first 1% and 50% of the next 5%.

Someone care to further explain this with maybe two different examples?

You gross $800, 6% is $48, taken out before taxes. They add 3.5%, or $28. Total contributed to 401k $72. With a 401k account best thing is start young, stay disciplined, stay on top of financial news and if the economy sputters consider moving your money in your Vanguard fund to a safer Vanguard fund. If crash happens consider moving back as funds usually recover over time. To maximize your retirement benefits be proactive. And yep, should've taken my own advice.

 

[FedExMan]

I guess what I was trying to figure out the 100% of the first 1% thing. Is there a benefit of putting a higher percentage in as far as a bigger match from fedex?

 

[It will be fine]

I guess what I was trying to figure out the 100% of the first 1% thing. Is there a benefit of putting a higher percentage in as far as a bigger match from fedex?

You should always put at least as much as the company will match in a 401K. It's part of your compensation that you aren't collecting if you don't.

 

[Oldfart]

I guess what I was trying to figure out the 100% of the first 1% thing. Is there a benefit of putting a higher percentage in as far as a bigger match from fedex?

If you contribute 1%, they match that 1%. If you make $500, you contribute $5,, they put in $5. If you put in 2%, they put in 1.5%. Same $500 gross. You put in $10, they put in $7.50. You put in 3%, they put in 2%, Your $15 to their $10. Just remember after your first 1% that they match totally, every time you bump your contribution up 1%, they are gonna bump theirs .5% At your 6% contribution, theirs will be 3.5%. That is their MAX contribution.

Not everyone can afford to contribute 6% right away but it is important to be enrolled and make some sacrifices while you work so you can retire very comfortably. Just doing a little investing while you are young will go a long way come retirement age.

Any further questions, don't hesitate to ask.

 

[McFeely]

Best advice I can give: contribute as much as you can as early as you can.

Here's a 2 minute video that shows you how much you need to save each day to be a millionaire at 65 based on different starting ages. You'd be amazed at how much you can save if you start early.

How much money you need to save each day to become a millionaire by age 65

 

[TUT]

No doubt. Several weeks ago our senior manager gave an excellent presentation about the various retirement benefits that are available to employees. I heard several 30+ year employees asking questions about how the 401k works and how do they enroll. That tells me these 50+ year old employees have no savings for retirement.

Don't they have a pension?

 

[Oldfart]

Don't they have a pension?

Most have 2 pensions. If you plan on retiring on less than $2500 a month, you will be eating potted meat and crackers. You will need more than a pension if you want to replace 70% or more of you working income. If you sacrifice while you work and contribute to your 401k, it is possible to replace almost 100% of your working income when you retire.

 

[McFeely]

Funny thing is $2500 a month is actually 100% of some of our working monthly income. LOL and stuff.

 

[Oldfart]

Funny thing is $2500 a month is actually 100% of some of our working monthly income. LOL and stuff.

Didnt realize FT couriers made 30k a year. $15 an hour? Figured beginning pay was more than that. If you are PT, Not a bad gig.