PF Confession: No retirement fund (kind of)

Okay guys, I’m going to be honest again.  And I really hate being honest sometimes.  I don’t have a 401k fund or any other “real” type of retirement fund.  Okay, pelt away with (virtual) stones….and now I will explain.

                In the past, I was narrow minded and didn’t focus on savings or anything really besides getting what I wanted right then and there. (Big fan of instant gratification) I did hold jobs but most of them didn’t offer a 401k unless you were considered full time.  And I always was a few hours under full time—according to their standards anyways.  And I never gave retirement much of a thought as that was SOOO far away.  Hello stupidity.  And I still don’t have a retirement fund going.

                But!  I do have a little saving grace.  A very little one, some might even say miniscule.  The company I work at (without going into too much detail) gives back what you put in.  And it’s not even that hard to put in funds—it’s basically my taxes.  (Wow this is hard to explain without giving away details)  And I’m not eligible to fund a 401k until after my first year of employment here.  That hasn’t started yet—and it won’t until July 5th(Yup I started 2 days before my 27th birthday—I felt like it was the most amazing birthday present ever)  So I’ve been doing my research and trying to figure out how I want to do this.  Still haven’t made any decisions but I figure I need to start sometime.  I should have already started and I know that I could have done a few other things this past year instead of waiting to fund the 401k.  But I didn’t.  I can’t really go and change anything in the past even if it would be way awesome if I could. 

                Why is this getting brought up? I’m going to be calculating net worth for us pretty soon.  And that won’t be included on my net worth as I don’t really know exactly what I will be getting back from work.  (The whole vested thing and all that and more details that I don’t want to go into) And yes, I will be doing net worth for us as we have everything joint as of right now and it would be too difficult and time consuming I don’t want to separate it.  

                Now question for my readers: anything you would like to see me blog about?  And anyone interested in guest posting middle of May area? I have a business trip and I figure it would give people a break from reading my stuff!


19 Comments on “PF Confession: No retirement fund (kind of)”

  1. I don’t understand why some employers make you wait a year to participate in their 401(k). Actually, I have a theory. The longer they make you wait, the less you can contribute. Which means there’s less money they’ll have to pay out in a matching contribution. Maybe I’m just being cynical, but I think I’m right.

    • bogofdebt says:

      I think you are right. And this company matches 6% I believe (that’s the number I remember anyways). The crazy thing is that they give you the booklet on the 401k about 9 months before you are eligble (right when you become eligible for health insurance).

    • Alice says:

      I think some of it has to do with turnover and the difficulty of the paperwork and such. They don’t want to have to complete that whole process for every single person and then them not be there in six months or so. I’d say that if an employee is there for at least a year, they’re far more likely to stay.

      But I’ll agree that it probably has a lot to do with limiting their own participation.

  2. Alice says:

    Not that it’s an excuse, but you’re young yet. It would be a different story if you were getting close to retirement age. You know that you’re lacking in that area and now you’re working on it. Awesome!

    • bogofdebt says:

      Thanks 🙂 I’m just glad that I will be doing it now before it’s too late. I’ve seen too many people near retirement age without any kind of retirement accounts. Just what they have “saved” and it never seems to be enough for them to actually retire.

      • Alice says:

        My mom worked for years (decades) and retired. Her retirement income provided by her employer is surprisingly small. She does get social security, but that’s not much better than the retirement income. She had no other retirement fund so is very limited.

  3. addvodka says:

    Do they put a restriction on when YOU can contribute, or just when they match? Either way, it’s coming up soon!

    • bogofdebt says:

      It’s when you can contribute. I thought at first it was just when they matched but I triple checked it. So I’m getting excited about it because it is 2 months away–just gotta do some research now.

  4. Jessica says:

    I wish my company provided a retirement account, but I guess its way too small to offer anything other than health insurance. It kinda sucks that you can’t fund a 401(k) until you’ve been there a year, but it sounds like that is the norm. How much money do you plan on putting in the 401(k)? If you already have a number in mind, how about starting to set aside that money now until July for your retirement account? That way you don’t have to wait to start saving

    • bogofdebt says:

      That’s part of the research I’m going to be doing is to see how much I can afford to contribute. The good part is that there is that other retirement thing that I don’t even have to do anything about so that will be a bonus.
      That does suck about smaller companies–that was the problem with some of the other jobs I worked at. They just didn’t have the amount of people to justify having a 401k program.

  5. I’m actually surprised that companies don’t let you fund a 401(K) right away. I thought there were employer laws that mandated providing a retirement option to employees.

    I get why companies do the whole vesting thing on matching contributions, but it seems like it would make it pretty difficult to calculate net worth. Why can’t companies make it easy and just give us free matching immediately 🙂

    • bogofdebt says:

      I know right? Like I said, thankfully, there is a small retirment thing that I’m not 100% sure on how much I’ll get back but I know that I’ve earned it. I’m not really looking forward to calculating my net worth because I know it’s going to be a big fat red negative mark but I also know that it is going to get better. Just slower than what I want.

    • mandated employer-sponsored retirement? IF ONLY!

  6. That’s great you see that you need a retirement fund! That’s more than a lot of people in their 20s. 🙂 Now, it’s just a matter of getting there. At least you’ll have a 401K started soon and of course, anything you can contribute to a Roth IRA would be great. You can start that now!

  7. Don’t beat yourself up, just start contributing — and contribute more than 6%. Open an IRA as well! By the time you’re 30 you are supposed to have half your income saved.

  8. Michelle says:

    Don’t get upset about not starting yet! You are still young. I don’t have a 401K either, I have a SEP though.

  9. You’re doing it now, that’s what is important.

  10. You’re not 30 yet, you definitely have time to get caught up. At least you work where you have a 401(k) and they match some of it. I’ve had many jobs where there was nothing.

  11. belowhermeans says:

    *throws tomatoes and hisses* Just kidding. But get on that, okay?

    I want to guest post for you!

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