Late 401(k) Contributions

Time for a break from the writer and artist stuff. Let's talk about money. Specifically, retirement money. The Animation Guild has had a 401(k) plan for eleven-plus years. Employees deduct money out of their paychecks, and the various signator studios here in L.A. remit the deductions to the Plan Administrator (in our case Mass Mutual.) In that time, various studio have occasionally messed up by sending in employee deductions way late, sometimes months late. We ran across an L.A. TIMES piece on the subject a couple of days ago, and think it's worth reading. If you aren't putting away at least a few thousand bucks a year into a 401(k) account, you should re-think your position. It's a good way for people who work for a living to tuck money away without paying state or federal income taxes on the money until you pull it out in retirement (when, theoretically, you'll be in a lower tax bracket). And eighty percent of 401(k) plans have a match from the employer, so its even more worthwhile to do. There are various small downsides: 1) You pay tax penalties for pulling the money out early; 2) you invest the money, so you get the credit when investments soar and the blame when investments crash 3) companies don't always send in your money to be invested as quickly as they should (see above). While we don't like any downsides, we don't think they outweigh the advantages to building a retirement nest egg. (Hulett regrets not starting one a lot earlier than he did. But when he was 32, Hulett deluded himself that he wouldn't need a retirement because he would be 32 forever.)