Thinking of taking a Job in Austin / Chicago or San Fran
Apr 13th 2016, 6:54 pm
#346
G33k!
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Joined: Apr 2016
Location: The Midlands
Posts: 140
Re: Thinking of taking a Job in Austin / Chicago or San Fran
Both companies he's worked at have run it that way, a match in each dollar put in rather than a percentage of salary.
The 32% on the dollar was the legal minimum required - tight company!
We put in the full $18k, so the company adds $9k. Working it through as mentioned above, based on a dollar-for-dollar as a percentage of salary, someone earning a salary of $180k and getting a 5% match would put $9k of their own money in, and get $9k added by the company. Is that how it works? Presumably they could also put in another $9k to bring their own contribution up to the $18k limit, so they end up with $27k invested each year, all told.
It all comes out the same for someone on that sort of salary, but for someone earning, say, $80k, would they only get a contribution of 5% of that, so $4k? Even if they put in the full $18k themselves?
The 32% on the dollar was the legal minimum required - tight company!
We put in the full $18k, so the company adds $9k. Working it through as mentioned above, based on a dollar-for-dollar as a percentage of salary, someone earning a salary of $180k and getting a 5% match would put $9k of their own money in, and get $9k added by the company. Is that how it works? Presumably they could also put in another $9k to bring their own contribution up to the $18k limit, so they end up with $27k invested each year, all told.
It all comes out the same for someone on that sort of salary, but for someone earning, say, $80k, would they only get a contribution of 5% of that, so $4k? Even if they put in the full $18k themselves?
Apr 13th 2016, 6:56 pm
#347
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Joined: Apr 2011
Location: Ohio
Posts: 1,834
Re: Thinking of taking a Job in Austin / Chicago or San Fran
6% of salary for a lower paid drone-type doesn't sound nearly as good a deal, unless I'm misunderstanding how these percentage-based schemes work.
Apr 13th 2016, 7:10 pm
#348
Joined: Dec 2001
Location: Dixie, ex UK
Posts: 52,448
Re: Thinking of taking a Job in Austin / Chicago or San Fran
Both companies he's worked at have run it that way, a match in each dollar put in rather than a percentage of salary.
The 32% on the dollar was the legal minimum required - tight company!
We put in the full $18k, so the company adds $9k. Working it through as mentioned above, based on a dollar-for-dollar as a percentage of salary, someone earning a salary of $180k and getting a 5% match would put $9k of their own money in, and get $9k added by the company. Is that how it works? Presumably they could also put in another $9k to bring their own contribution up to the $18k limit, so they end up with $27k invested each year, all told.
It all comes out the same for someone on that sort of salary, but for someone earning, say, $80k, would they only get a contribution of 5% of that, so $4k? Even if they put in the full $18k themselves?
The 32% on the dollar was the legal minimum required - tight company!
We put in the full $18k, so the company adds $9k. Working it through as mentioned above, based on a dollar-for-dollar as a percentage of salary, someone earning a salary of $180k and getting a 5% match would put $9k of their own money in, and get $9k added by the company. Is that how it works? Presumably they could also put in another $9k to bring their own contribution up to the $18k limit, so they end up with $27k invested each year, all told.
It all comes out the same for someone on that sort of salary, but for someone earning, say, $80k, would they only get a contribution of 5% of that, so $4k? Even if they put in the full $18k themselves?
If you put in 4% the numbers all double. .... I you put in 5%, the company chips in the maximum 4%, so your taxable gross drops to $95,000 and you have $9k in your 401k.
I always understood that the dollar cap includes matched funds, so I am surprised about you talking about putting in $18k, and getting a further company match of $9k.
You may have not got the tax benefit of all your contributions and/or inadvertently increased your tax bill somewhere. 
Apr 13th 2016, 7:13 pm
#349
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Joined: Apr 2011
Location: Ohio
Posts: 1,834
Re: Thinking of taking a Job in Austin / Chicago or San Fran
The company matches (upto) the first x%, so if you have a salary of $100,000 and the company match is 4%, and you put in 2%, then the company puts in a matching 2%. Your taxable gross salary drops to $98,000 and you have $4k in your 401k.
If you put in 4% the numbers all double. .... I you put in 5%, the company chips in the maximum 4%, so your taxable gross drops to $95,000 and you have $9k in your 401k.
I always understood that the dollar cap includes matched funds, so I am surprised about you talking about putting in $18k, and getting a further company match of $9k. You may have not got the tax benefit of all your contributions and/or inadvertently increased your tax bill somewhere.
If you put in 4% the numbers all double. .... I you put in 5%, the company chips in the maximum 4%, so your taxable gross drops to $95,000 and you have $9k in your 401k.
I always understood that the dollar cap includes matched funds, so I am surprised about you talking about putting in $18k, and getting a further company match of $9k.
You may have not got the tax benefit of all your contributions and/or inadvertently increased your tax bill somewhere. Edit: yep, it's $18k for employee deferrals ($6k for for over-50s), and $53k for overall deferrals including the employer ones: https://www.irs.gov/Retirement-Plans...ibution-Limits
Last edited by kodokan; Apr 13th 2016 at 7:16 pm.
Apr 13th 2016, 7:14 pm
#350
Joined: Dec 2001
Location: Dixie, ex UK
Posts: 52,448
Re: Thinking of taking a Job in Austin / Chicago or San Fran
I think you get it, ..... just like 6% free money. Sure 6% of $100k is more than 6% of $50k, but hey ho. ..... I would argue that the true disparity is that someone on $50k might have a much tougher time finding their $3k to contribute than someone on $100k has finding $6k. ...... My tip would be sign up immediately you join the company and contribute your 6% even if the match doesn't kick in until the second year (as mine did), then you'll never miss the money, or at least not as much.
Last edited by Pulaski; Apr 13th 2016 at 7:22 pm.
Apr 13th 2016, 7:20 pm
#351
BE Site Lead
Joined: Aug 2004
Location: MA, USA
Posts: 92,170
Re: Thinking of taking a Job in Austin / Chicago or San Fran
You can't plan your living expenses and life style on the bonus, it is just that and can also easily be zero.
Apr 13th 2016, 7:20 pm
#352
BE Forum Addict
Joined: Apr 2011
Location: Ohio
Posts: 1,834
Re: Thinking of taking a Job in Austin / Chicago or San Fran
I think you get it, ..... just like 6% free money. Sure 6% of $100k is more than 6% of $50k, but hey ho. ..... I would argue that the true disparity is that someone on $50k might have a much tougher time finding their $3k to contribute than someone on $100k has finding $6k. ...... My tip would be sign up immediately you join the company even if the match doesn't kick in until the second year (as mine did), then you'll never miss the money, or at least not as much.
And yes, I like everything deducted where possible, then it's not 'real', and it's like magic money fairies have given Future Us a pot of gold.
Apr 13th 2016, 9:03 pm
#353
G33k!
Thread Starter
Joined: Apr 2016
Location: The Midlands
Posts: 140
Re: Thinking of taking a Job in Austin / Chicago or San Fran
Cool think I get it now, makes sense, not quite my final salary pension I have in the UK, but hey...
Apr 14th 2016, 11:16 pm
#354
Austin. TX.
Joined: Sep 2013
Posts: 5,930
Re: Thinking of taking a Job in Austin / Chicago or San Fran
http://britishexpats.com/forum/attac...1&d=1460675723
so just thought I'd throw this in. Just to make the pain of negotiations easier
This was today's lunch at local Indian restaurant - a Thali. Very delicious. OOPs upside down pic...
so just thought I'd throw this in. Just to make the pain of negotiations easier
This was today's lunch at local Indian restaurant - a Thali. Very delicious. OOPs upside down pic...
Apr 15th 2016, 12:30 am
#355
Joined: Dec 2001
Location: Dixie, ex UK
Posts: 52,448
Re: Thinking of taking a Job in Austin / Chicago or San Fran
I had one for about 18 months back in the 90's before my employer canceled it. Then I had one in the US for about 2-3 years ..... before my employer canceled it. 
