401k Pros and Cons by Curtis Ray

"I am okay... I have a 401k Match"... Says Everyone who has a 401(k).

Unfortunately, More money in a broken system is still broken…

The 401k simply doesn't produce good retirement income, no matter how much money you put into the system. So, while you get the security blanket feeling that we're getting free money into your retirement fund from the company match, it simply doesn't help you as much as you think it does. It's because of the 4% rule. Not to mention Uncle Sam gets his money too when you start withdrawing it.

And to put more perspective on the subject, the video example show the HIGHLY UNLIKELY company match of a 100%, meaning the company matches you dollar for dollar on what you put into your retirement plan.-- According to INVESTOPEDIA:

Match Amounts
Companies don’t match an unlimited amount. In other words, you can’t contribute half of your salary and watch your company match all of those funds.

The majority of companies offer some sort of matching contribution for an average of 4.3% of a person’s pay, but there are many formulas out there. The most common match was 50 cents on the dollar. For every $1 you contribute to your company 401(k), your company will contribute 50 cents. About 71% of companies with matching contributions contribute 50 cents for every dollar employees contribute up to 6% of their pay. Another 21% match employee contributions dollar for dollar, but the maximum is normally lower—commonly 3%.

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