This morning, as I was in the field, a couple of people I have jointly worked with and I started a conversation on where our savings are currently going into.
One of the guys said that he's saving $25 per pay period through deferred compensation. He's been working at this job for almost 10 years and he has saved approximately $20,000 in the 457K account. I really hope this is not his retirement savings plan.
The other guy proudly said that all his savings are, instead, going into a credit union savings account, where the savings rate is currently lower than the annual estimated inflation rate.
Both guys are in their fifties, at least, and their salaries are almost double mine.
Why are they not taking better advantage of better savings or investing vehicles and methods...or increase the amount of savings per pay period??
$25 per pay period is really nothing if you're making $80,000 plus per year!
Yes, it is eye-opening when people you know do let slip some personal financial details. My boss only recently signed-up for the company 401(k) plan. He waited 4 years to sign up since the plan has a vesting period of 3 years and then last year he forgot. But then from conversations I know he has a big house in the suburbs, a stay-at-home wife, and three children who all attend private grade schools. I am sure he feels he can afford to save - and he makes at least 3 times what I make.
ReplyDeleteOops - meant can't afford to save...
ReplyDeleteIt makes me sad that I now work for a company that doesn't match 401K. One of the bad things about working form a smaller company.
ReplyDeleteAt least one of my coworkers recently bumped up her contribution to $20 per pay period, from $5. (Mind you, we get paid weekly, but still...)
ReplyDeleteI've got one of the best employers around in terms of 401k matching - they just stick 12% of my salary into the account. I don't have to do a thing. 12% ! ! !
ReplyDeleteHow nice!!!! 12%!!!
ReplyDelete