Raise time is a good time to think about starting or increasing your 401K deduction
Some SHARE members choose this time to increase their contribution because they say they won't miss the money as much if the deduction starts at the same time as the raise. UMass Memorial adds $.50 for each dollar you contribute to your 401k, matching up to 2% of your pay.
an Early Start Is Part of a Wise Retirement Strategy
While all SHARE members automatically accrue toward retirement through the Defined Benefit Pension, the UMass Memorial 401k plan allows you to save for retirement, pre-tax, with UMass Memorial contributing too. If you’ve been to a SHARE Retirement Training, you know that experts retirement say we should think of a solid retirement income as a three-legged stool, with the pension serving as one leg, Social Security as a second leg, and your total savings functioning as the third leg. The younger you start, the less you have to take out of your check each week to reach your goals.
Don’t Leave Money on the Table
Memorial CT Technologist and SHARE Co-President Jay Hagan has served as a member of the SHARE team that has negotiated with management about the current retirement benefits. “I think a lot of SHARE members don’t realize they’re leaving money on the table if they don't save through the 401k,” he says. “My financial advisor tells me, 'if you can afford it, the employer-match is really free money.' You could think of it as the hospital paying you to participate. If you don't use the match, it's like giving the money back.”
Have Questions?
If you have questions about SHARE’s negotiated retirement benefits, please contact the SHARE office. If you have questions about your own 401k, contact Fidelity Investments at 800-343-0860, or log on to your Fidelity account at www.fidelity.com/atwork.
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It’s always easy to find other ways to spend your money, but be sure to show some compassion to your future self, too. That person will be grateful that the “current you” took advantage of the employer’s match, and socked away some money for yourself in your 401k. Check out these resources . . .
This article explains the value of compound interest, and why investing now gives you so much more than investing later.
Fidelity NetBenefits provides this individualized investment calculator that can help you understand just how different contribution amounts affect your long-term investments.
So many decisions! Seem like too much? Dr. Laurie Santos of Yale University tackles the subject of “decision fatigue” in episode 8 of her podcast, The Happiness Lab. (She talks about the subject of 401k’s around minute 14 of the broadcast.)
And it may seem silly to literally imagine your future self, but that can actually be useful to your financial health, according to this report.
If you recognize this post, good eye! We’ve re-printed this here from before on the SHARE blog, with some revisions. It’s just such a useful annual reminder!