The Myers Group Matching 401(k) Program

Did you know that The Myers Group (MG) offers our employees a 401(k) matching program? 

This is literally free money and you should be taking advantage of if you are not already. 

A 401(k) is a retirement savings plan that allows you to invest a certain percentage of your pre-tax income into an investment account. MG matches $.50 on the dollar for the first 6% of your salary that you contribute. We are providing this because we want to encourage you to save for your retirement and we want to help you. 

If your annual salary is $40,000, that’s an extra $1,200 you wouldn't have had without the match.

You can enroll with our 401(k) administrator, American Northwest at www.americannw.com or call them at (800) 815-0058. Email: info@americannw.com. If you leave the company, you can leave your money in the 401(k) or you can roll it into another one. Also, if you have a 401(k) when you join the company, you can roll it into ours or you can have both. It's your option. The only requirements are that you must be 21 years old and work for the company for at least 30 days before you enroll.  

How much should you invest in your 401(k)?

Retirement experts recommend that you contribute 10-15% of your gross income towards your 401(k) each year. If you are 50 years old without savings, invest at least 20% of your income. If you can’t invest this much, invest at least 6% to take advantage of the company match. Here is a 401(k) calculator to calculate your match and future balance based on age, retirement age and expected rate of return. 

When determining what to contribute, don’t set your sights too low: A couple of percentage points can make a big difference. 

Even if you start small, it’s important to start saving as early as you can and let time do the work of accumulating interest for you. Make a goal to increase your contribution each year and stick to it.

For example, the below graphs show two retirement savings scenarios for a 24-year old employee making $35,000 who expects to retire at age 67 and is contributing to the MG 401(k). 

The left graph demonstrates that if this employee invests 6% of gross income or $175/month, her retirement savings would be $1.08 million. This would provide $1,967/month in monthly retirement income, which falls short of her expected expenses of $2,300/month. The right graph demonstrates that if the employee invests 10% of gross income or $292/month, her retirement savings would be $1.55 million or $470,000 more than the 6% option despite only investing $117 more per month. In this scenario, she would have $2,842/month in retirement income, which would cover her expected monthly expenses.

The main advantages of 401(k) plans include:

• Lower taxes: You get to invest money from your paycheck before taxes are taken out. The money isn’t included in your taxable income amount, which lowers your overall tax responsibility. Be aware there are annual contribution and income limits; make sure you know what they are so you don’t exceed them.‍
• Automatic savings: Out of sight, out of mind. Since the contribution is deducted directly from your paycheck, you aren’t tempted to spend the money rather than save and invest it. Your balance continues to build with regular contributions.‍
• Matching funds: MG offers to match the money you contribute to your 401(k), up to 6%. 
• ‍A 401(k) can grow by itself: If you begin investing in a 401(k) early enough in your working years, you can benefit from the power of compounding — meaning that, over time, you’re not just earning returns based on the money you've contributed, you’re also seeing returns on your investment returns! That’s when your balance can really accelerate in good market conditions.
• ‍401(k) money is yours forever: Your balance is portable, so if you end up changing employers, you can have your current 401(k) balance “rolled over” to your new employer’s 401(k) plan and continue to build it up.

What if you can’t invest the recommended 10-15% of your income?

• Catch the match! If you need to start small, at least try to contribute as much as your employer will match. Don’t leave money on the table unless you absolutely have to.
• Increase by one percent annually: Think about raising your contribution one percent each year. That’s an easy formula to follow to maintain consistent growth. See how saving one percent more each year can make a big impact on your savings.
• Work toward 15 percent: By the time you are 40, try to be contributing 15 percent or more of your annual salary.
• Get a reality check at age 50: When you reach 50, review the overall health of your retirement savings. It should be easier now to estimate how much you’ll need and determine whether you’re on track to get there. 
• Use your last working decade wisely: If you find a shortfall, consider taking advantage of the higher “make-up contribution” amount the government allows people over 50. In 2023, you can invest up to $30,000 if you are over 50 or $7,500 more than people under 50. 

If you have any questions about the 401(k) matching program, please contact our HR Director, Sandy Bright at (360) 321-5693 or Sandy@myersgroupllc.com.