Medicated Money

Thursday, September 07, 2006

New Retirement Plan

With the start of my new job this week, I needed to attend 2 days of orientation. For the most part, it was your standard ‘this is how we do this’ orientation. I did my best to pay attention to all of the speakers, but to be honest, after a couple of hours of hearing about hospital protocols and procedures, I was lucky I didn’t fall asleep. I did perk up though when retirements and benefits were discussed.

Overall, I am both happy and disappointed with my new company’s plan. They offer a 4% base plan and a 50% matching plan on employee money contributed up to 5% of your salary. On the whole, one can receive up to 6.5% of their salary from the institution. The bad news is that you become eligible for these plans after one year.

Due to the one year waiting period for enrollment, we have decided to not make any retirement contributions in the 1st year of employment. We plan on completing our debt repayment plan, and then banking enough money for a down payment on a house. As for the wife, she is currently still looking for a position. We hope that after a very good interview this week, she will have a job offer early next week. If that stands true, her position does offer a 3% matching rate on contributions to a 401(k) that starts immediately. We definitely would take advantage of this offer and contribute just 3% and put the rest of her salary to the plans already mentioned.


  • Assuming you both max out your 401(k)'s during this first year, the Future Value of those funds at the age of 55 is about $256,000, assuming a very conservative growth rate of 7%.

    Are you willing to sacrifice a quarter million dollars of retirement funds in order to pay down debt this year?

    What are the rates on your debt?

    Can't you find a nice compromise?

    Matthew @ Crazy Money

    By Blogger Matthew, at 7:46 PM, September 07, 2006  

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