401k question

[Holly_Hobby]

Hypothetical:

Start a 401k at Job #1. Leave Job #1 for Job #2 in several years. Roll over 401k to Job #2. And this goes on for 30 years and maybe 17 jobs.

Does a person get the company matches for all 17 jobs? Thanks.

[SharonRB]

1. You only get the matches while you're actually working somewhere

and putting money in while you're there. Once you leave a job you can't continue to put money into their 401(k).

[pagerbear]

2. Only those you were allowed to take with you at each job change.

And that varies company to company.

[Ioo]

3. Depends on the Comp... Vesting periods change place to place

If you stayed at Job 1, and vested the part that they put in, it is YOURS!!!

My current company adds 5% it has a 4 year vest with 25% per year. So if I leave after one year I get 25% of ALL they have added. At 3 years I get 75% of ALL of what they added (Even the stuff added last month). Once it is yours it is yours...

[Sarah Ibarruri]

4. Doesn't it have something to do with the money being vested?? nt

[mcscajun]

5. You get the "matching funds" only while you are actually employed

and earning at a particular company. Leave that company before you're vested, you may not get to take everything. Leave after you're vested, take the entire balance inlcuding matching funds, and roll it into a new employer's plan. You get new matching only on new contributions to the new employer's plan, and so on.

Vesting periods vary from plan to plan.

[SharonRB]

7. True -- I forgot to mention the vesting part

If someone leaves a job before vesting, they do not get the matching funds, but can take their own money and earnings on that money with them.

[Connie_Corleone]

6. You have to be vested in each job.

For my job, the fully vested period is 5 years.

There is partial vesting too.

[slackmaster]

8. Matches depend on what each individual plan says

My company's is typical:

Company matches are paid into employee's accounts each paycheck along with the employee's own pre-tax contributions.

Employees become vested in the matching funds in annual steps, with zero vesting the first year, and 100% vesting when you have completed five years of service.

So, if you work less than one year and quit, you take none of the matching funds with you, it all goes back to the employer. Leave after one year but under two, you keep only 20% of the matching funds. If you complete five years and quit, you get to keep all of the matching funds.

Some plans give you 100% vesting in matching funds immediately, but stepwise vesting is common as it provides an incentive for employees to stick around.

Once you have left a company and taken whatever funds you are entitled to, that's the end of it for that plan.

[Holly_Hobby]

9. Thanks everyone! So you must be fully vested

to take the whole thing....

[Not Me]

10. Jeezus, I feel lucky...almost guilty.

My job still has a generous (30 years w/60% of pay) defined benefit plan with a 2%annual cost of living benefit.
It has been replaced recently (for new employees) with a defined contribution (401k) that pays 9% of wages with no match required from day one. The 401k is completely roll-able to any future company that accepts rollovers.

[A HERETIC I AM]

11. Your defined benefit plan is indeed a dying breed....

primarily because they are so expensive for the employer. The other reason they are getting increasingly rare is because we are living longer. When they were the norm, our average life expectancy was considerably shorter than it is now. You could feasibly work for a company for 40 years, retire at 65 and live another 40 years.

Don't feel guilty. But you are lucky!

As far as the OP is concerned, one of your alternatives is rolling your old 401(K)'s into an IRA. This would give you much greater control over the investment options. Most 401(K)'s have limited choices for investment. With an IRA, you are open to the entire universe of investments. Roll your old 401(K) and just contribute to the one at the new job.