401-Kraziness

Posted on January 21, 2005 2 Comments

I mentioned last month that my company was recently bought out by a larger conglomerate, and I was having a hard time translating what would happen to my 401K due to a really poorly written brochure.

Since then I’ve received a ton of mailings on the subject from my employer, consulted my Suze Ormon books and will soon be attending a seminar on the topic. If your company ever merges, I recommend following the snail mail trail to keep on top of your accounts and learn about changes.

My 401K was originally housed with a company I really liked, because they had an online feature where I could check progress of my retirement funds. As much as it stinks to put money in there, it’s actually really fun to watch your accounts grow. It feels like you’re gambling, but winning money all the time.

With company A, I opened my account originally as a 100 percent pre-mixed growth plan. Then I got a little nervous and switched to an 80 percent pre-mixed growth and 20 percent pre-mixed moderate account. I had control over where I put my money at the click of a mouse.

Once the merge is complete, however, my 401K will be with a new company, in a new account, which runs a little differently. In this plan, I estimate when I will retire, and Company B selects a plan that changes automatically as the years go by. I’ll be in a 40-year investment cycle, which means that my account will be focused on growth for the immediate future, but will go to moderate and conservative stages as I get nearer to retirement. A simple phone call will change the set up, but this sounds fine to me. I believe there is also a Company B online feature to track growth.

What I need to find out now is whether the merged employer will continue to match contributions, and to what percent. My current company matches up to three percent, and contributes a certain amount monthly no matter how much I invest. I also need to find out about “vesting.” Am I still “vested” even though we’re now owned by a different company? (I put that word in parenthesis because I’m not sure I’m using it right.) I should get answers to these questions at next week’s meeting.

As I learn more about my finances, I become more interested in tracking activity and want to become more involved in future efforts. For a girl who studied communications, languages and liberal arts her whole life, this is a pleasant surprise!

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