How does my 401 ( k ) work ?
Saving for retirement is important — but can seem confusing . A 401 ( k ) plan is simply a retirement savings account that is offered to employees . With a 401 ( k ) savings plan , the money you elect to contribute to your retirement savings account is deducted from your paychecks and automatically deposited . That makes saving for retirement very easy !
All employees are auto enrolled at 3 % after 30 days . Employees can opt out or change contribution . Company match begins on first of month following 6 months of employment .
Here is an example : Assuming total eligible pay for a paycheck is $ 1,500.00 , here is how much you and the Company will contribute to your 401 ( k ) account , depending on the percentage you elect to contribute :
If you to contribute this percent of your pay ... |
... your paycheck deduction will be ... |
|
|
... and the company match will be ... |
|
... for a total deposit to your 401 ( k ) plan account of ... |
1 % |
$ 15.00 |
$ 15.00 |
$ 30.00 |
2 % |
$ 30.00 |
$ 30.00 |
$ 60.00 |
3 % |
$ 45.00 |
$ 45.00 |
$ 90.00 |
4 % |
$ 60.00 |
$ 52.50 |
$ 112.50 |
5 % |
$ 75.00 |
$ 60.00 |
$ 135.00 |
( Note : Company match begins on the first of the month following 6 months of employment . Company contributions made for the 1-15 of the month appear on the 22nd paycheck . EXAMPLE - Employee begins working February 6 , 2023 , reaches six months of employment August 6 , 2023 , begins receiving company match in September 2023 . This employee can expect to see the match on their September 22 , 2023 check .)
As you can see , the Company matches up to the first 5 % you contribute – 100 % on your first 3 %, and 50 % on the next 2 %. So be sure you ’ re contributing at least 5 % of your pay to receive the maximum Company Matching contribution . Otherwise you will be leaving some of that free money on the table !