Employer Contributions to Savings

The company I am with is going through our annual benefit reselection process and part of that is deciding how we want to allocate flex credits. For the upcoming year, I am going to increase the amount of savings I do. Last year, with all the employer and my own personal contributions to the pension plan and savings plan, I contributed 16% of my earnings. This year, I am bumping that up to 16.25% of my earnings. My own personal contributions are less than half of this so it is an awesome deal – I work for a great company.

I know that and extra 0.25% a year does not seem like much, but in the long run I strongly believe that it will help. From a future value perspective, this means an extra $35,000 in portfolio value (assuming an 8% growth rate over 35 years). That is an extra $1400 per year in income (assuming an yield of 4%). Better than a kick in the teeth. If I can manage to do this consistently through the years it will really start to ad up.