How long would you stay...

puma1552

Suspended
Original poster
Nov 20, 2008
5,559
1,945
…at your job if they didn't match on a 401k?

Have a pretty good job and have been there a few years. It's very difficult, but generally there are no office politics or major corporate feel. One glaring exception is that it is literally the only job I know of in my field of study that does not offer a 401k match (they do offer a 401k).

More than anything, I want to retire. Figure if the going rate these days for a match is 4.5% to my 6% contributions, a 75% return on investment - guaranteed - even before the massive benefits of compounding - makes an absolutely enormous difference in my retirement ability.

So, if the lack of a 401k was the only real major downside to your job (again keeping in mind you work in a field where it's unheard of for an employer not to match), how long would you stay? I figure a great work environment might be worth a little smaller salary, but when you are talking about 35-40 years of contributions and all the compound growth on that lost out on by the lack of a 401k match, that's a HELL of a price to pay for the work environment.
 

Plutonius

macrumors G3
Feb 22, 2003
8,417
7,290
New Hampshire, USA
My job has never had a match to the 401K and, as far as I can see, most companies seem to be ending their 401K matching.

The tax benefits are worth it though and I have been putting in the max possible for the last 10 years or so.
 

malman89

macrumors 68000
May 29, 2011
1,651
6
Michigan
It really wouldn't matter to me. I take my retirement savings into my own hands.

My employer only offers a 1% match as we are a stingy non-profit focused on maximizing funds to programs (~92%). The thing is, the plans available have high admin costs (I think a lower one was around 2%) combined with the low match motivates me to not invest in it. I know in the end I'm still turning down 'free money,' but I would probably just contribute the minimum to it.

If my employer had a very rewarding 401k/403b/whatever match, I would be much more likely to max it out (example: University of Michigan offers a 2-to-1 match. I'd be maxing that baby out no doubt).
 

ucfgrad93

macrumors P6
Aug 17, 2007
17,943
8,923
Colorado
Given the job market today, you'd be foolish to leave over the fact that your employer doesn't match 401K contributions.
 

Scepticalscribe

macrumors Sandy Bridge
Jul 29, 2008
50,805
34,323
The Far Horizon
I'm not familiar with the US system, as I'm not from the US and don't work there.

However, on the general question of whether what the OP describes as 'a great work environment' is worth a slightly smaller salary, I think it is.

I have worked in very well paid posts, some excellent, and others with a toxic work atmosphere, and also in the proverbial 'great work environment' with a considerably smaller salary, and, as time went on, I realised that I prized a decent environment over a poisonous one, to the extent that I actually would take a greater salary loss than merely a 'slightly smaller one'. Not, naturally, that one broadcasts this fact, but I value my time more than I value money.

Obviously, the ideal scenario is to be in a well paid position where one enjoys the work and the working environment, and I readily realise that my preferences are not necessarily those of everyone else.
 

GoCubsGo

macrumors Nehalem
Feb 19, 2005
35,741
146
You'd leave a good job that you like because the company doesn't pony up and match a 401k? That would be super dumb.

My company has reduced 401k matching from 5% to 3% to 2%. Looks like their next move will be by EOY and it will be 1% then nothing. Bonuses are gone, titles are being changed resulting in on-paper demotions and the stock continues to rise. The company is hugely profitable and they're doing super well. Great for everyone on top, the rest of us struggle. Moving on is tough in the market and tough for other reasons. I still get a great paycheck so I stick around until something else happens. I also give them more than my fair share of hard work which I just adore of course. Hard work keeps me fed. My retirement is my own responsibility.

Yeah, leave your job because they don't match your 401K. Go for it.
 

puma1552

Suspended
Original poster
Nov 20, 2008
5,559
1,945
Quite surprised at some of the responses here. In my field, a match is the norm, and the job market today is a lot better in my field than it was when I took this job.

I think some people underestimate the value of 75% return on investment - guaranteed - and then compound growth on that for a lifetime. This isn't like choosing one job over another over a couple thousand bucks in salary, it's much more than that.

With my statistics, it's about $800k dollars difference by age 65 just due of the match alone with a projected 7% return average.

I should say a couple other things. As it is my salary with experience is actually about $8k less than national average for my experience level and industry. Also I like my job quite a bit, but I don't love the hell out of it - note I said my job is very difficult, and can be quite stressful; I know not one person in my industry that has a more difficult job.

My retirement is in my own hands, but that also encompasses seeking out a 401k match. Then again, most Americans expect to retire on social security and barely grasp the concept of compound interest (if they did, everyone would start maxing out a Roth IRA before they hit 20 years old), so I guess I'm not surprised.
 

rhett7660

macrumors G5
Jan 9, 2008
12,507
2,468
Sunny, Southern California
So are you here to justify your reason for leaving or staying?

If you can find a job in your field and they match, leave and go with them. I think it is pretty simple. Nobody here can make that decision for you.
 

Truefan31

macrumors 68040
Aug 25, 2012
3,432
719
Hmm industry average is 3% matching. If they don't do that u could just invest in other things. Roth IRA, etc
 

adk

macrumors 68000
Nov 11, 2005
1,937
21
Stuck in the middle with you
Quite surprised at some of the responses here. In my field, a match is the norm, and the job market today is a lot better in my field than it was when I took this job.

I think some people underestimate the value of 75% return on investment - guaranteed - and then compound growth on that for a lifetime. This isn't like choosing one job over another over a couple thousand bucks in salary, it's much more than that.

With my statistics, it's about $800k dollars difference by age 65 just due of the match alone with a projected 7% return average.

I should say a couple other things. As it is my salary with experience is actually about $8k less than national average for my experience level and industry. Also I like my job quite a bit, but I don't love the hell out of it - note I said my job is very difficult, and can be quite stressful; I know not one person in my industry that has a more difficult job.

My retirement is in my own hands, but that also encompasses seeking out a 401k match. Then again, most Americans expect to retire on social security and barely grasp the concept of compound interest (if they did, everyone would start maxing out a Roth IRA before they hit 20 years old), so I guess I'm not surprised.
You've changed your story with this post. Your original question was as follows:

So, if the lack of a 401k was the only real major downside to your job (again keeping in mind you work in a field where it's unheard of for an employer not to match), how long would you stay?
Most of us agreed that if lack of a retirement contribution was the only negative you saw in your job then it probably wasn't worth leaving over. In this second post you add on the facts that you are paid a below average salary, you don't really love the job, and that it's extremely stressful. Since you've now informed us that the lack of a retirement match is one of several negatives about your job, the insight you'll receive will change.

My job has a very good 401(k) contribution (I put in 5% and the company adds 7%) but I would leave it in a heartbeat for a similar job with less travel, even though the new job would likely have an inferior retirement contribution. I know that in the long run I would be happier taking an additional 7% of my pay and putting into retirement (a self imposed pay cut) and being home more often.

Also, I should add that most employer sponsored 401(k) plans have very limited investment options. My 401(k) only has one fund with an expense ratio below 1%. I put all of my extra retirement investment into my IRA which allows me to invest in a fund that I actually like.
 

Gutwrench

Contributor
Jan 2, 2011
4,421
10,157
I maxed my 457 until I retired. Now I'm in the private sector and only contribute to my 401 that my employer matches. The rest goes to a Roth.
 

Gregg2

macrumors 603
May 22, 2008
6,012
471
Milwaukee, WI
How does one find out that 401k matching is "the norm" in an industry, or that it's "unheard of" not to match? There are literally thousands of firms in my field, and I have no idea how many of them do matching. I don't even think that our professional organization publishes such information.
 

Shrink

macrumors G3
Feb 26, 2011
8,931
1,606
New England, USA
I've been working at a job with no matching 401K contributions for about 44 years.

Either I'm very stupid, or it's worth it because it's rewarding and interesting work....or BOTH!:p
 

BigPrince

macrumors 68020
Dec 27, 2006
2,052
105
If that was the only thing I did not like, I would stay and make sure I max out my other retirement options.

After some time, I would begin advocating for some retirement benefits.


At my part time job we have no retirement benefits. (small family business with 3 employees) After 1.5 years I requested a 401k plan be looked into or a modest lump some payment into my Roth IRA because I understand that a plan may not be cost effective for a business of three employees. We also agreed that every June the issue will be revisited.
 

velocityg4

macrumors 601
Dec 19, 2004
4,883
1,434
Georgia
I suppose it would depend. If your wages are more than 4.5% higher than at other companies it would be just the same as a 4.5% or better 401k match. Except it places the ball in your court to invest the money.

If they aren't 4.5% higher. Then it would really depend on your priorities. More money and a potentially worse work environment or stick with the job you've got. If the money was more important I would start looking for a new job.

However, I would not quit the one you are at. Look for a job while you are employed. For some reason if you are already employed it makes you much more employable. So the job search would be easier and your offers will be better.

Perhaps if you get a better offer. Your current employer will offer a better wage to keep you.
 

mwa

Suspended
Jun 3, 2013
154
0
Memo: A Slower Seesaw!
I used to work @ a company that also contrebuted to any retirement fund if I would also put money in. I never did and it wan't a very good company to work for.

I have enough money on my own, fortuntely, so an employer contributeing to a 401 K wouldn't be a deal breaker in making me stay if I didn't like it there.
 

Tomorrow

macrumors 604
Mar 2, 2008
7,154
1,322
Always a day away
Figure if the going rate these days for a match is 4.5% to my 6% contributions
That's a pretty spectacular match, in my experience. Most jobs I've had will match no more than 3% on a 6% contribution, and most less than that. In any event, it's dependent on the profitability of the company for the year. A couple of years recently I got no match at all.
 

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