401(k) Champion Honorable Mention: Jean Orr

Jean Orr of The Boeing Company

Thousand Oaks, CA

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I have been known to meet a new hire in the break room and ask them whether they are enrolled in the 401k Savings Plan.  Most of the time, I am happy to report that the HR department has done its job well, and they are enrolled.  I say "Are you investing at least 8% so that you get the whole 6% match?" Luckily the answer is usually yes.

However, if they say they are not enrolled, I explain that they need to relook at the math and tax advantages.  Being engineers, I know they can do the math. I explain that if they invest pretax dollars, it will lower their income enough that their take home pay will likely be close to the same - the big difference is the money is going into their 401k account instead of paying federal taxes. I also mention that they will never got 75 cents on every dollar invested anywhere else.  I say that if they just put it in the Stable Value Fund at the fixed interest rate they are still going to do well because of the match. and if they use the S&P 500 index fund or one of the Lifecycle funds they will do even better, with just a bit more risk.  I mention that if they do the Roth 401k it'll grow tax free forever and that is another way to eventually be able to retire.Our company doesn't offer a pension plan anymore, they contribute an extra 5% into the 401k now.  A pension is great, but if a person passes, the heirs get nothing.  The 401k is inheritable, and you can invest it as you choose and at your own risk comfort level. Since most are at the beginning of their careers, they are looking at another 35 plus years. I love that the 401k and its match and the power of compounding have given me options at this point in my career.  The biggest option is the choice of retiring or staying on my own terms.