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Monday, January 5, 2009

The Death of the 401k Match?

Working for a large corporation has always been seen as a safe, stable form of employment. This faith in safe jobs is being tested in this economic downturn as we have seen layoffs of corporate jobs to save company profits.
Lost in the news of a recession, layoffs, and bailouts is the news that may have the most long term impact on you and your family. Large companies like Motorola, Starbucks, FedEx, and Kodak have started to cut or eliminate contributions to employee 401k programs.
With this and the social security crisis, you may have to become responsible to fund 100% of your entire retirement. This means everyone must run their households like small businesses to ensure that they have enough profits at the end of the month to save for retirement before they are physically unable to work.

A brief history of retirement:

Pensions (Peaked in the 70's and 80's):
If you worked your career for a company you could retire with a lump sum or annual payment in the form of a pension. This combined with a healthy social security could support 100% of your retirement needs.

401k Matching (Peaked in the 80's and 90's):
To save money, companies did away with pensions and offered a 401k match. Generally this meant the company would contribute up to 33% of your 401k retirement.

On your own (2010 and beyond?):
Without any company matching and social security at risk, it may be up to everyone to find the money at the end of the month to save for retirement in the face of rising taxes to help offset our national debt.

Is your company providing you enough for you to save for retirement? Even if you do not wish to leave your job and work for yourself, could becoming a Corporatepreneur help you fund your retirement and future dreams?

We do not advocate over sized entitlements like free retirement. But, we do think it is important for people to adjust from a world where you could get help in saving for your retirement, to a world where you are on your own.

Just because you have to do it on your own, does not mean you have to do it alone.


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