Comments on: Can You Help Me Come Up With Some Retirement Trivia Questions?

By: David Wilson

David Wilson — Wed, 24 Oct 2007 15:13:14 +0000

You put $3,200 in your 401(k) plan and your employer contributes another $1,600. If at the end of the year your account has grown to $5500 in value. How much did you make?
a). 14.6%
b). 72%
c). 51%
The answer is B. While your account value has grown to $5,500 you actually only contributed $3,200. So your actual return is $5,500-$3,200/$3,200 to your account or 72%.

By: Steve Austin

Steve Austin — Wed, 24 Oct 2007 14:26:01 +0000

Reboboth, that’s good stuff. I didn’t know that, and I have a follow-on question….
Q: May an employer give an employee a higher match (up to the $45,000 contrib+match ceiling) in lieu of taxable salary?
A: [I don't know but I'll bet the IRS is listening.]

By: Reboboth Beach Realtor

Reboboth Beach Realtor — Wed, 24 Oct 2007 06:43:34 +0000

Meg hit my question with the max contribution to a 401K, but here’s another good one…

Q: Do Employer 401k Contributions Count Toward the maximum contribution?
A: no, Total match has to be under $45,000 and how you get to that number doesn’t matter. Company contributions can be up to 25% percent of your salary, $15,500 personal contribution and any combination of the two can be used to achieve the $45,000.

By: Evan

Evan — Tue, 23 Oct 2007 21:08:32 +0000

Questions that show how little they have to put into the plan depending on their age due to the wonders of compounding

By: Jeremy

Jeremy — Tue, 23 Oct 2007 21:00:13 +0000

Thanks for the help everyone. I’m wrapping up and printing the trivia cards now. These should be fantastic.

By: Jon

Jon — Tue, 23 Oct 2007 18:26:47 +0000

How about stuff like..

How long must you wait for your company’s matching contributions to fully vest?

What is the primary difference between a normal 401(k) and a Roth 401(k)?

What is the penalty for withdrawing retirement funds early? How can the penalty be avoided?

By: Jeremy

Jeremy — Tue, 23 Oct 2007 17:44:35 +0000

Fantastic! Thanks for the ideas so far Meg and Steve.

By: Steve Austin

Steve Austin — Tue, 23 Oct 2007 16:43:39 +0000

Q: What can you do on an ongoing basis to make sure that your Plan is well-run and that your retirement assets are in the hands of good custodians?
A: One way is to request a copy of the Department of Labor Form 5500 that your defined contribution plan provider is required to file every year. Even if you don’t read it, it helps to keep them honest knowing that plan participants *may* be carefully reading it, and asking questions!

By: Steve Austin

Steve Austin — Tue, 23 Oct 2007 16:36:26 +0000

Q: True or false: if I see recurring charges (on my periodic account statements) that I cannot understand, I shouldn’t worry about them — someone in HR or Finance is watching these things for me.
A: False; no one cares about your financial future more than you do. (mysterious recurring, or even one-time, charges should cause you to ask many hard questions of HR, the Plan Administrator, and any other stakeholders of the Plan)

By: Steve Austin

Steve Austin — Tue, 23 Oct 2007 16:30:41 +0000

Q: Do I have to file a fresh W-2 with my employer when I sign up for (or adjust my contribution amount to) a 401(k) plan?
A: No, but you should carefully consider it, especially if you want to keep more of your paycheck now (i.e. not get a huge refund next year), or if you want to make sure that you are not underpaying your income taxes by too much (e.g. if you reduce your contribution amount).