Yesterday was a gloomy, gross day. It rained most of the day (torrential downpours interspersed with black skies), I was coming back to work from a 3 day weekend, and had attended a concert the night before and was up far past my bedtime.
But none of that mattered in the end.
My coworker and I were discussing various rates of return on our 401(k)‘s both before and after we rebalanced them. Curious to see what mine was, I logged in to the account and checked it. (2.42% in case you were wondering. Sadly, this is an improvement on what I had been getting.)
I then noticed something odd. There was only one portion in my 401(k). In the past, there had always been 2 portions. One of the portions was my money that I contributed to the plan. The other, the match my company gives me.
The way my 401(k) plan works is as follows: They match the first 2% at 300%, and the last 4% at 100%. Effectively, they give me a 10% match on my contribution which is incredibly generous and very kind. However, there’s a 3 year vesting period for their match money. If I would’ve taken a new job before that vesting period was up, I would’ve lost their portion.
But now? Now that $15k unvested portion is vested. Which means it’s mine all mine!
I barely even have 2.5 years with the company, so seeing it vested so early was an unexpected and very pleasant surprise.
It’s like getting a Chance card in Monopoly “Bank error in your favor collect $200”. Except this was no error. It was very deliberate.
Now, theoretically, I can find a new job and get hired on somewhere else. I always felt burdened or obligated to stay until I got that $15K. I mean, who would just walk away from a big chunk of change like that? It pained me to know I could find the job of my dreams and I wouldn’t be able to go after it.
Even now, I doubt I’ll look into getting a different job until at least May of next year. If I leave the company before then, I have to pay back the moving allowance they gave me. I’m just getting settled in both in my current job and the new town I moved to, so I don’t want to pack up and go somewhere else so soon.
Knowing I could move, though, is very freeing to me.
My company offers a pension in addition to our 401(k) plan. You know, that thing you hear that the Baby Boomers have but the Millennials don’t? That thing.
In a simplified version, the way it works is I work for the company my whole life, and they give me a monthly salary after I retire. Depending on such factors as number of service credits (years worked), age and the year I retire in, I could be getting between $3–10k per month from the pension plan.
Not a bad deal right? All I have to do is work here for the next 30–40 years of my life and I’ll be golden.
They have a handy dandy pension calculator where we can change any number of variables and get an estimate. It tells you what your estimated monthly salary would be at the end and how much money you would’ve earned throughout your career. I could make anywhere from $2–6 MILLION dollars over that 35 years. Pretty damn impressive.
Until I remember I’d have to sit in an office for 40+ hours a week and give the best years of my life to a company instead of myself.
All of that to say, I’m really not that worried about whatever money I’ll get from the pension. If I stay the 5 years to have the pension vest, great. If not, c’est la vie!
What does your 401(k) plan look like? Have you taken that into consideration when thinking about changing jobs?