From time to time, topics I cover in this column trigger reader letters. Last week’s column on taxes and my closing mention of 401(k)s did just that. Next week, we’ll
tackle your comments and questions on taxes. (Don’t hesitate to send in more tax questions to email@example.com.)
Julie Jason: Redesigned Form 1040 is three rolled into one
Julie Jason: Will you be relocating when you retire?
Julie Jason: January is the time to review household expenses
Julie Jason: It’s a good time to review your estate plan
This week, I’ll share three letters from people who were no longer participating in their 401(k)s and thus regretted not being able to compete for the 401(k) Champion Award (www.juliejason.com/award).
From “HR guy”:
“I am a huge fan of the 401(k), and I wanted to submit some of my best pitches that I use when talking to an employee. For those who have never done a 401(k):
A 401(k) is about the only way we can hide money from the government. And it’s LEGAL! If money is tight, start with 1 percent and see if that hurts. If you can still pay your bills, raise it to 2 percent. If it still doesn’t hurt, raise it to 3 percent and so forth until it hurts, then back it off a percent or 2.
“For new hires: We have a 401(k) with a company match. The CEO has enough BMWs and wants you to have their money. It’s free. Take it! Put in enough to maximize the company match and then put in more if you can afford it.
“I gave [a young employee] the above pitches, and he went for like 3 or 4 percent.
A year later, he comes over to show me his statement and he’s all jazzed because he had like $11,000 in there. I said, ‘Cool, did it hurt?’ He said, ‘No,’ so I said, ‘Then raise it up a percent or 2.’ I’ll never forget it. He was so excited. If these marketing pitches help … persuade just one person to even start a 401(k), then my work here is done.”
From “Persuader of Doubters”:
“I did my best to persuade my staff …
Source:: East Bay – Lifestyle