Friday, February 12, 2010

Many companies that have stopped matching employees' 401(k) contributions when the economy tanked, are now thinking about renewing these matching contributions. My wife's company is one such employer, and there is talk that the company will begin matching contributions again in the coming months. In such a situation, should you stop your contributions until the company renews its matching or should you stick to your guns?

The benefit of delaying contributions is obvious: wait a few months and the same money that you would contribute now with no employer matching will yield a guaranteed return in the form of employer moola... However, there are a few arguments I can think of against this strategy. For one, unless you know for sure that your company will be renewing the match, you are delaying contributions that could be invested in the market and yielding a return (assuming the market goes up, that is). For another, if you delay your contributions, will you have the discipline to max out your retirement savings for the year when the matching actually begins, or will you leave money on the table? There is also the question of how matching is to be calculated. Many companies limit matching to a percentage of employee pay in a given pay period, meaning that stacking all your contributions may not give you the desired bump in employer matching funds.

My wife and I discussed the option of delaying her contributions, but have not yet made a decision. Any opinions or suggestions?

My company has never matched employee contributions, nor is it likely to do so in the foreseeable future. Let's just say that for now I am happy to have a steady paycheck... :-)

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Tuesday, February 09, 2010

How I Doubled the Value of My Junk Car

It's been a few months since the last time my junker car fell apart on me, so I guess it was time for it to happen again. Last Friday when I got to the office in the morning and got out of my car I was greeted by a billowing cloud of white smoke. The car was smoking like the Marlboro Man.

That's got to be the end of that ol' junker, right? Not so quickly. After the smoke cleared and the car cooled down for a while, I drove it about half a mile to the local car shop, where the problem was diagnosed. Apparently break fluid was leaking from the rear axle, and started to burn when friction from breaking created heat.

The total cost of the adventure? About $400 in repair costs. The way I look at it, the repair cost me about as much as the car is worth (maybe I'm exaggerating a tiny bit. Maybe a lot). So what do you think? Did I double the value of my car? :-)

13 years and still going (not so) strong. But with no car payments and pretty impressive gas mileage (31 MPG), I am going to keep it for a little while longer.

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