Retirement Saving 101
What is a 401(k) and how does it work? These short lessons below, provided by Vanguard, will help you to better understand when to start saving for retirement, the benefit of an employer match, as well as how to best budget for retirement and more.
What is a 401(k) and how does it work? These short lessons below, provided by Vanguard, will help you to better understand when to start saving for retirement, the benefit of an employer match, as well as how to best budget for retirement and more.
Why Should I Join?
A retirement plan can help make saving money easier. Financial security, tax breaks and employer contributions are some of the thing you should consider. |
Does Employer Match Make a Difference?
Woodgrain's 401(k) plan is a 6-3 plan. That means Woodgrain will contribute $0.50 for every dollar you save up to 6% of your pay. Is that good? It's an incredible return on investment you can't get anywhere else! Missing out on the match could be a huge mistake. |
How Can I Afford
To Retire? When you retire, you're able to live on less. Two major reasons for this are that (1) you're no longer saving for retirement, and (2) you're no longer paying payroll taxes. But, how much do you need? |
Investing Basics What are Mutual Funds, Stocks, and Bonds? How do I choose an investment wisely? |
How much should I be saving?
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Saving For Retirement - Think 15%
It's important for you to be ready for retirement. A savings target of 15% of your annual salary will help you be ready for the future. When you take advantage of Woodgrain's contribution in addition to your own savings, this is a very achievable goal. You don't have to make it to 15% all at once. By increasing your contribution amount as little as one 1% each year, you'll be there before you know it. |
This lesson by Vanguard explains how much you should be setting aside for retirement. It includes suggestions on how to "perk up" your savings rate by small amounts that make a BIG difference.
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What about Catch-Up Contributions?
For those employees who have reached the age of 50, or will reach 50 this calendar year, you are eligible to do a catch-up contribution into your 401(k). Catch-up contributions allow you to make an additional pretax contribution to your 401(k) plan, on top of your regular pretax contribution limit. For those employees who have maxed out with their yearly 401(k) contributions and have reached age 50, please talk to your local HR Representative about potentially contributing more.
