The graph below will show you three possiblilites of what could potentially happen to your 401k account with various savings methods. Note that this graph does not include any employer contribution, only your own.
- The first person contributes 3% of their salary monthly for 43 years, earning 8% compounding, and ends up with a balance of $443,900.
- The second person begins with a monthly 3% contirubiton of their salary and raises that contribution amount by 1% each year until the total contribution amount equals 6%. After 43 years of investing those contributions and earning 8% compounding, the second person ends up with a balance of $842,000.
- The third person begins with a monthly 3% contirubiton of their salary and raises that contribution amount by 1% each year until the total contribution amount equals 10%. After 43 years of investing those contributions and earning 8% compounding, the third person ends up with a balance of $1,278,500.
It’s pretty impossible to argue that a slight increase won’t help your build your retirement nest egg after reviewing this chart, isn’t it? The question is will you have the drive and ambition to pay yourself first and put a little bit more aside into your 401k each year? Now, it’s important to remember that at Lockheed, you receive a lovely matching benefit that allows you to receive free money from the company. All you must do, is contribute up to the matching limit to get it, so you put in 8% of your salary and Lockheed puts in 4%.
As a Lockheed employee, what happens if you do nothing to even start your own contributions? Well, then Lockheed will automatically withhold 3% of your weekly eligible compensation. That 3% will automatically be invested into the pre-tax Target Date Fund that is closest to year in which you turn 65 years old. As the years go by and if contributions haven’t been changed or you haven’t opted out of the plan, Lockheed will continually increase the automatic withholding by 1% each year. Once the withholding reaches 8%, the automatic annual increases will stop.
Now, there are limits on how much you can contribute to your 401k, both by the IRS and Lockheed. Lockheed actually has a program that allows you to contribute more than the IRS limit. To learn more about that, you’ll want to join us on our next Lockheed Retirement Maximization Webinar. Click here to register. You are also welcome to contact us for a complementary consultation and we can walk you through it!
For more tips like these, click here to sign up for our weekly email blog newsletter. If you would like to get better educated on Lockheed retirement strategies, click here to download our Free Report titled Retire with Confidence: The Top 4 Things You Can Do Now to Maximize your Lockheed Retirement. And, if you want to have face time with a Lockheed Retirement Specialist², you can click here to schedule an appointment, click here to sign up for our Lockheed Retirement Workshop or click here to just give us a call (817) 210-3444.
Be sure and check back next week for more incredibly valuable information. Cheers!
Financial Planning and Investment Advisory offered by SWMG, LLC a Registered Investment Advisor.
Lockheed Martin Retirement Specialist is not an official title or professional designation nor is it conferred by Lockheed Martin on any individual or company.
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