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Recognizing that their money can’t grow unless it is put to work, plan members have been boosting the amount they contribute. 5 percent of their paychecks, on average. 3 percent 15 years earlier. 8 percent. Just a bunch of fuzzy numbers to you? If all those decimals and percentages just give you a headache and a stomach-jotting flashback to eighth-grade algebra class, think of them this way: Rank-and-file workers voluntarily increased their contributions by roughly 30 percent. Would you voluntarily jack up your home mortgage payments by that much?

Fifty cents for each dollar contributed by an employee is the most widespread. Source: Hewitt Associates LLC. A graded match changes, rather than ends, at some specified trigger point. The size of the employer’s match can differ from company to company. Some give more. Some throw in less. The most common fixed match is 50 cents for every $1 contributed by the employee. Dollar-for-dollar matches are the next most common. Whatever its size, the company match is virtually a pay raise that you can award to yourself.

Katzeff, Paul, 1948- Getting started in 401(k) investing. II. Title. 024’0145-dc22 2010012325 Acknowledgments I wish to thank the many people who helped make this book a reality. In particular: Wes Mann, Susan Warfel, Chris Gessel, and Paul Sperry of Investor’s Business Daily for their collegial support; Doug Rogers of IBD for invaluable feedback; Carrie Coghill of D. B. , CDA/Wiesenberger, Hewitt Associates LLC, The Vanguard Group, Spectrem Group, T. S. Department of Labor; and Clark M. Blackman II, then of Deloitte & Touche LLP, for his extensive contributions regarding tax consequences of distributions.

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