February 15, 2022

Ep. 444: Are 401k vesting schedules ethical?

We want to answer your questions about money. Email us and you may hear yours on the air: askpete@petetheplanner.com

This week on the Pete the Planner Show, we’re exploring three main topics:

  • Are 401k vesting schedules ethical?
  • Should my wife’s organ transplant affect our retirement spending strategy?
  • Why doesn’t the market spike on Fridays, due to everyone getting paid and making 401k deposits?

Here’s a preview of what happened and when:

Show Notes:

Emailer worried his employer’s 401 matching contributions could be pulled-back, if he leaves his job

Whether you know it or not, when your employer contributes to your 401k, their deposits aren’t completely yours until after a pre-determined period of time. Of course there’s a term for this; it’s called vesting. Vesting exists for a few different reasons, but the primary reason is to encourage you to stay at your job longer.

There are some strange ramifications to vesting, for both the employer and the employee. In this segment, we discuss whether vesting makes sense, and what you need to know to ensure you don’t miss-out on your employer’s contributions.

An emailer’s wife got two organ transplants; should that affect their planning?

The great challenge of financial planning is that a plan must be practical and realistic both 5 minutes from now and 30 years from now. Health realities only add to the complexity of financial planning. In this segment, the emailer must make decisions around pension survivor benefits.

Why doesn’t the market spike on payday, as millions make deposits into their 401k’s?

On the surface, this hypothesis makes a lot of sense. Why doesn’t the market spike on Fridays, or other popular paydays? It’s complicated, but 401k deposits aren’t as immediate as you think.

Click the PLAY button below for the rest of the show!


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The post Ep. 444: Are 401k vesting schedules ethical? appeared first on Pete the Planner®.


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