% to contribute to 401k

Discussion in 'UPS Discussions' started by wwinvestor, Feb 28, 2008.

  1. wwinvestor

    wwinvestor New Member

    I was just hired as a part timer and only wanted the job for the benefits right now (it will change later I am sure) - can I contribute 100% of my paycheck to the 401k? What will ups match? Do I do pre-tax or after tax? Thanks everyone!
  2. Fnix

    Fnix Active Member

    I would do pretax.
  3. upsis

    upsis Gold Member

    you can contribute from 1 % to 35 % max.......ups will match the first 3% with company stock.
  4. local804

    local804 Well-Known Member

    oh really?
  5. wwinvestor

    wwinvestor New Member

    just tried to enroll with 35% but it said that was more than my plan allowed.


    FAVREFAN Member

    As far as I know, it is 25% max until April for the Teamsters, then the 35% max. And I am positive there is no match for us(Teamsters). I wish there was! And yes, do all pre-tax. Just remember, it's not a piggy bank. Only put in what you will not want out later. 10% penalty plus taxes if you take it out.
  7. wwinvestor

    wwinvestor New Member

    so there is no match whatsoever??

    isn't that kinda crappy - don't most companies usually match some %tage??

    Thanks everyone!

    FAVREFAN Member

    Teamsters get a penison, therefore no match. Management employees get matches. I would have prefered a nice 6 % match since my day one over the pension but not now because I'm too far in. It's still a great investment vehicle. Pre-tax is a great way to build moneys through compound interest.
  9. filthpig

    filthpig Active Member

    One thing to remember about the pre-tax part is that you will have to pay tax on it when you withdraw. In some cases it's better to go ahead and pay the tax now instead of gambling that taxes won't increase on 401K's in the future. Either way, it's a good investment. Just be sure to keep up with where your money is invested or you will lose your ass.
  10. freeloader

    freeloader geek

    You have a few different options:

    Pre-tax I believe the max is 15 or 17% and you cannot withdraw the money without paying a penalty.

    After-tax I am not sure how much you can contribute but I am pretty sure you can withdraw from this type penalty-free.

    Other options you might want to explore since you want all of your money to go towards retirement: IRA's and Roth-IRA's.

    And like the others are saying, for Teamsters I don't think there is a UPS match. For management and administrative/technical UPS matches 3% of your contributions payable in UPS stock.
  11. pkgdriver

    pkgdriver Member

    I think the 35% will still have a limit though. It may be 15,500. We get(may get) a pension so no matching. I think the company may pay record keeping expenses.
  12. local804

    local804 Well-Known Member

    I will start receiving checks from my pension 14 1/2 years before I can even touch my 401k money. Sometimes the numbers can be a little tricky and always looks good from a distance.
  13. wily_old_vet

    wily_old_vet New Member

    Don't understand how you'll get checks from your pension 14 1/2 years before you can touch your pension. You can start taking 401k money at 59 1/2. That means for a 25 and out at 25 years you would be 45 which means you started at age 20. Is that about right?
  14. local804

    local804 Well-Known Member

    I will get checks from my pension 14 1/2 years before I can touch my 401k, not my pension. Maybe by the time I get to 59 1/2 it will be raised to 62, you just dont know. Local 804s pension has a very fair 25 and out . I started UPS at the age of 19, my start date is after my birthday.
  15. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    As you can see from the above posts, there are a great deal of misconceptions regarding our 401k. We can have between 1%-25% of pre-tax money and 1%-5% of after-tax money deducted from our check, with a "catch-up" contribution of $5,000 when you reach 50. There is no matching because we receive a pension but UPS does pay the administrative fees. The 401k should be thought of as a long-term savings vehicle, not liquid funds as accessing this money prior to age 59 1/2 ( I always wondered why the 1/2?) subjects you to a 10% withdrawal penalty and 20% Federal tax withholding. There is an annual limit set by the IRS, not UPS, of $15,500 and this usually increases each year. I had not heard of the possible increase to 35% but don't reallly see this as an advantage. I will explain why. Let's assume my weekly gross pay is $1,550. If I have 20% taken out weekly ($310), I would reach the IRS limit in 50 weeks (15500/310=50). The Plan would suspend deductions for my final 2 paychecks of the year. However, if I increase this to 35%, which would equate to $542.50 each week, I would reach the limit in 29 weeks and would have 23 weeks with no contributions, so, in my opinion, the smart thing would be to do the 20% so that it is evenly spread out throughout the year, unless you have the ability to do the 35% and then continue the deduction in to another savings vehicle (IRA, mutual funds, CDs, etc).

    The person who started this thread sounds like he is at an age where he should set aside an amount that he is comfortable with, leave it alone, and watch it grow.

    FAVREFAN Member

    Pretax max. is 25% and will be 35% come April up until or if you hit the limit.(Teamsters)

    FAVREFAN Member

    That's cool for you. But for those who make less than you, bumping up to 35% allows them to contribute more each week. I have allready stated most of what you have said in shorter previous posts. One other thing.......you can begin to collect at 55 1/2 if you are completely retired and are not working for any company. The 59 1/2 is for if you plan to keep working or retire. 5 year difference.
  18. wwinvestor

    wwinvestor New Member

    Thanks so much for the responses everyone! I really appreciate it!

    I got it set up and it allowed me to contribute 25% pre-tax.

    So the pension is on top of that?? How does the pension work exactly? If someone could please explain I would appreciate it very much.

    Thanks again!
  19. BrownSuit

    BrownSuit Active Member

    WWInvestor -

    I think by now you've figured out that there is a lot of difference between the 401 (k) plans offered, with a lot of different classifications of employees.

    Here you've got PT, FL, PT Sups, Specialists, Admin, Technical, Management, etc. Each one has a different 401 (k) Plan.

    If you have any doubt, best practice is to check with HR. Some sites have 401 (k) meetings explaining the benefits.

    If any matching is extended to you as an employee, I highly recommend that you take advantage of it.

    Other than that, keep in mind, there are pros and cons to overfunding the plan.

    Also, on UPSers you have discounts to certain resources (ie Financial Advisers) who can help you. If you are unfamiliar with the plans. All of the 401(k) plans are being affected in one way or another by the state of the economy, I wouldn't just jump in, especially putting your entire salary into it.
  20. barnyard

    barnyard KTM rider Staff Member

    The Teamster 401k plans are really nothing special. I contribute to their pretax plan, buy a little bit of stock (I think $25 per paycheck) and have 8% after taxes put in an Edward Jones account. I also have $150 per paycheck go into a separate savings account.

    I think you can have up to 9 different accounts receive paycheck deductions. The sucky part is that you can only control the amount going into 1 account from UPSers.com.

    The stock is a pretty good deal. If you buy through payroll deductions, you get a 10% discount. You have to hold the stock for 5 years (I think) to get your 10% and you can do a DRIP, so you do not have to goof with dividends. I consider the 10% stock discount to be my employer match. The beauty part is that there is no cap.

    So, if you are looking for an employer match, buy stock. Sage advice would be to diversify, though.

    Tom B