I have to choose between the company's pension plan or a company matching (5.5%) 401k. I am fully vested having 5 years with the company and will work for another 27 years...what should I do???
I am not sure why you have to choose. What gives you a better return? In other words, the 401K gives you how much for each dollar you contribute. The pension plan, how much do they contribute per year.This is a good start in an analysis. But still, why do you have to choose? I haven't heard of such a thing.
Nuschoolfool, I haven't heard of this situation either. Is your company dissolving their pension? Well, if you do have to decide I would look at all the variables that Ringfinger was talking about: Years of service, % return, current benefit, projected benefit. In your situation, do you expext to be with the same employer for those 27 years? If not, I would suggest the 401 as it is more mobile and your benefit is portable.Good luck and Roll Tide,Ramajama
This is something the company devised. Employees with over 5 years seniority will automatically default to the pension plan if a choice isn't made. Employees with less than 5 years will default to the 401k. The 401k contribution is 5.5% as long as I contribute the same or more. The pension plan contribution is jibberish to me..but I do know the calculation is 1.667% of my average yearly salary in my last 5 years of retirement times the number of years of service. The thing that worries me most is that the company pension won't roll over to my children in the event of the demise me and my husband.
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