401K Comparison
October 6, 2008 – 5:21 amI’ve thought for a while that my company’s 401k was a bit poor on benefits and features, and now I have a way to tell! Emily Brandon over at US News published an article recently that lists the average features of 401k programs nationally. Below is how my 401k compares:
- average employer deposit: 3.2%. Mine: 2% match on a 6% contribution until I’ve been with the company 5 years. Rating: below average.
- average investment choices: 18. Mine: 13, not counting company stock. Rating: below average.
- 30% of plans offer a Roth 401k option. Mine does not.
- Average pretax deferrals: 5.6% for the common person and 7% for highly paid employees. I contribute more than this, striving to be in the 10-15% range some day. I find it interesting the highly-compensated employees (which I think means employees over ~$105,000/yr aren’t really saving that much more than everyone else. I would be they’re spending more than everyone else though on average, so they may be in for a lifestyle downgrade in retirement if they’re not careful!
I can only assume that the 5-year waiting period for a 3% match and the lack of a Roth 401k choice are driven by costs and the fact that my company still offers a pension. Furthermore our pension is currently overfunded, which may be the reason they’ve kept it around thus far. Should the future differ from the past, I wonder if the pension will continue to exist. Either way I’m not planning on it, but it sure would be a nice to have. The real bump in pension value though occurs when an employee passes the magic 2 stagegates: 55 year old and 10 years with the company. According to an HR presentation I sat through an employees pension literally doubles in value to the employee when they reach this mark, because the employee is placed in a new group “retirement-eligible” category. At 55 I’ll have worked here 24 years, and although I would actually like to work here that long only time will tell if that will be possible or preferable.
How does your 401k plan compare to the average?
If You Liked This Post Then Please Check These Out...
|
2 Responses to “401K Comparison”
Well i thought my plan was OK at best but i am above the national average. But below the average on choices. Thanks for showing the averages
By Brian on Oct 6, 2008