Imagine finding out one day that your retirement contributions are missing from your account. With your future on shaky financial ground, naturally you would be distraught. You can avoid this by regularly checking your nest egg. You can review the statements your plan provider sends you, or you can probably get your balance by calling your provider or visiting its website. To know if your contributions are correct, you must verify the information yourself.
Find your elected contribution per pay period. For a 401(k) plan, this is the percentage or flat amount you told your employer to take from your paychecks. If you have a traditional retirement plan, your contributions and your employer's match go into the same account. If you have a Roth 401(k), your stash and your employer's "free" money go into separate accounts. When figuring your contributions, remember your employer's match and the cash you kick in are two different amounts, even if they're in the same account.
Multiply your elected amount by your gross wages to get your contributions. Let's say you make $44,000 a year and chose 3 percent. This means you've socked away $1,320 for the year. Let's say you're paid semimonthly. Divide $44,000 by 24 semimonthly pay periods for the year to get your semimonthly salary of $1,833.33. Then multiply $1,833.33 by 3 percent to get $55, which is your stash per pay period. To get your full amount, multiply your deductions for each pay period by the number of pay periods you've been making contributions. The same goes for your employer's match -- simply multiply the percentage by your gross wages.
Verify your calculation by asking your human resources or payroll department for a statement of your total retirement contributions. You could view your pay stub, but it might show only your pay period and year-to-date amounts. If you don't have an employer-sponsored plan and make payments straight to the provider, ask the provider for a statement. If you and your employer have different amounts, ask your HR or payroll department for a detailed explanation. The same goes if the plan provider's information varies from your calculation.
Look into increasing your contributions or keeping them the same. As of 2013, you can squirrel away up to $5,500 a year in your traditional or Roth individual retirement account. For a traditional or Roth 401(k), 403(b) or 457 plan, you can sock away up to $17,500, not including your employer's match. When you reach this limit, your employer may stop your deductions for the year, or you might be able to make after-tax contributions to a traditional 401(k). When the new year kicks in, your contributions should start back up.
- If you're looking for a retirement plan you had with a former employer, contact that employer for details on your account. If you can't find your former employer, you can contact the Pension Benefit Guaranty Corporation to track down your old retirement plan. This federal agency insures private-sector pension plans. You could also contact the National Registry of Unclaimed Retirement Benefits, a free service that may be able to put you in touch with your old employer.
- U.S. Department of Labor: What You Should Know About Your Retirement Plan
- U.S. News & World Report: Is the Roth 401(k) Right for You?
- Office of Personnel Management: Frequently Asked Questions
- U.S. News & World Report: How to Find Hidden Retirement Money
- Bankrate.com: Retirement Plan Contribution Limits
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