The Weight of Money

The partner’s work started a matching 401K program about a year or so ago and that prompted the partner to finally open an account. We’ve been putting in just enough to get the full match from the company even though we know we need to put in much more if retirement is ever going to be possible. Here is one area where a head in the sand approach is bad news and we know it (no one said personal finance bloggers always make the best financial decisions).

So, we just got notice that his company is going to stop doing this. The company has been struggling financially lately which puts a little extra stress on us because job security is something we’ve taken for granted. But there have been many changes at the company in the past few months that gave us the impression that they were finally getting things under control. To drop this program, out of the blue, implies to me that the situation is more serious than we assumed. The company has been laying off lots of folks lately — mostly a corrective action since they really hired too many people last year — the cuts have been to more overhead type positions (one was their first Chief Financial/Operating Officer that they hired just 6 months prior). We’re still pretty confident that cuts to the engineering department are highly unlikely since they need them to get and fill new contracts and bring in the money. I think the partner will be updating his resume, just in case.

Last night the partner asked if he should pull back his contributions for a while to give us a bit more cash on hand. It seems like a easy solution to help with our financial crunch, but we also both agreed that we’re too behind in retirement contributions to consider reducing them at this time. So, we’re losing “free” money from the company, but will still keep contributing anyways and hope to increase those contributions later this year. Having a few extra dollars today isn’t going to offset the pain we’ll feel if retirement is not a possibility.

This entry was posted on Tuesday, March 4th, 2008 at 9:28 am and is filed under investing, savings. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.