401K Match Explained
Hint – It’s FREE Money!
After you have worked at ECC for 90 days,
you are invited to participate in our 401K Program
Overview
You can invest up to $19,500 per year. While I don’t expect anyone to put away that much, you don’t need to put away nearly that much to earn a significant amout of FREE money. This is a huge benefit the ECC provides to its employees. By investing in a 401K Plan you don’t have to work any more hours to get paid more.
Here is how it works
- You let us know you want to participate in he 401K Program.
- Tell us how much you want taken out of each check and put into your 401K fund.
- Each pay period, ECC will match the amount you put away based on the following formula.
- 100% of the first 3% put away – up to 3% of your total earnings.
- 50% of the next 2% put away – up to 2% of your total earnings
Examples
Based On Annual Earnings
1.
Employee Earns – $52,000
Employee Invests – $50/Week ($2600/Yr)
ECC Gives You – $2060
2.
Employee Earns – $62,400
Employee Invests – $50/Week ($2600/Yr)
ECC Gives You – $2496
Based on Annual Earnings
Employee Invests This Much
ECC Gives You This Much
Employee earns $52,000
$50/Paycheck - $2600/Annually
$2060
Employee earns $62,400
$50/Paycheck - $2600/Annually
$2496
Did You Know?
…with compound interest, any interest accrued then earns interest on itself. So the earlier you start, the more your money will grow.
Orman gives the example of a 25-year-old who invests $100 a month in a Roth IRA $100 per month for 40 years and earns a 12% average annual return. When that person retires at age 65, their investment will be worth just over $1 million.
But not everyone starts putting money away in their 20s. “You think, ‘I don’t have to invest, I’m young,’” Orman says.
If you start investing $100 per month at age 35, though, you’d only have around $300,000 by the time you reach age 65. “Those 10 years just cost you $700,000,” Orman points out.
“How much would you have to be investing later on to make up for that?” she says. “Hundreds and hundreds and hundreds of dollars a month.”
Written by Financial Advisor, Suzy Orman.
