I read an article or two about retirement plans. One great piece of advice is to contribute at least enough to get your company’s maximum match. Sadly most of my company’s never matched. This weekend I stumbled upon my company’s employee handbook.
I don’t have company matching, but I do have a vesting period. After a set amount of service years to the company, your retirement funds will become appropriately vested. In my case, after one year of service, I am entitled to one third of my funds. After two years, two thirds, and I will be fully vested after three years of service. It’s good I became aware because I was fully vested at my previous job only six months in. I can understand the company’s position as it sifts out short timers and gives employees an incentive to stick it out for the long haul. Training and the hiring process is quite costly.
Why do I bring this up? If you are not fully aware of your retirement situation at work, you may be leaving money on the table. If your job clearly is no longer a good fit, then by all means, move on to greener pastures. However, if you are on the fence, don’t forget your unvested retirement funds. Most people practice a set it and forget approach to their 401k. Factor your unvested portion when deciding to leave your job. In this case, all of your retirement funds could be yours, only if you stick around long enough.
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Good reminder Buck! This subject is something that isn’t super exciting, but ignorance and procrastination could cost you in the long run.
Loved your guest post!
Thanks MC! Ignorance and procrastination will always get you no matter what!
Failing to beaware of your benefits can really cost. A colleague left our company a matter of weeks prior to meeting her 5 year retirement plan vesting requiement. It cost thousands, and she only became aware after she had left.
She blamed the company, but I don’t think it’s HR’s role to make employees aware of this after the letter of resignation has been dropped.
Sorry to hear, but thanks for sharing. If that story doesn’t motivate you I don’t know what will!
In my former role as CFO, I was responsible for administration as well as Finance. When a new employee joined the company, they were given a copy of the employee handbook, and a lot of paperwork. We asked them to sign a paper that they read and understood all of the material. I would bet 99% of them never read all it never mind understood it. Everyone should take personal responsibility for what they sign. I know the courts will back up the employer in these cases. If you do not understand something, you should ask questions.
Great message thanks for sharing! Too many people tune out to critical paperwork. Short attention span, don’t care? Whatever it is it needs to stop!
My company vesting period is 5 years… That’s a long time.
Wow long time. Besides this does the company treat you ok?
Just another important reminder to pay attention to all of your benefits that might be available to you. A boring topic to be sure but important nonetheless.
Boring? Who you calling boring? Just kidding. Haha. I agree with you. But if it involves money, the topic should be considered sexy!
Can you lose your pension if your vested , but are fired?
Whatever is vested is yours and should be safe. However, please check with your company’s policy to be sure.