Michigan Requires New Hires to Go Into 401k Retirement System

Michigan becomes the first state to move away from standard defined benefit government pensions by providing a 401k retirement plan for new hires. The plan is mandatory for new state employees hired on or after March 31, 1997. The 401k Defined Contribution plan is also an option for current state employees who are members of the existing retirement systems or for those who are former employees who are re-hired.

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Some Myths About 401k’s
Myth 1: The majority of lower-income employees don’t participate in their 401k plan.

• On the contrary, the majority (53%) of participants in 401k plans recordkept by Fidelity earning between $20,000 and $40,000 do participate, and 71 percent of participants earning $40,000 and $60,000 participate.
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401k Facts

A 401k should be one of the last sources, if not the last, from which to borrow money. There are three important reasons for this.
First, you're costing yourself an enormous amount of interest. (When you borrow money from a 401k, your nest egg is smaller and earns less money.) Second, you pay back the loan with after-tax money (in contrast to contributions to a 401k, which are made with pre-tax dollars). Third, the loan isn't tax deductible. (SOURCE: The Wall Street Journal. Complete Retirement Guidebook: How to Plan It, Live It and Enjoy It)

Michigan Requires New Hires to Go Into 401k Retirement System

Speak Your Mind

Some Myths About 401k’s

401k Recent Articles

401k Facts

A 401k should be one of the last sources, if not the last, from which to borrow money. There are three important reasons for this.