Wednesday, December 19, 2007

How chit-chat changed my life

Yesterday, a co-worker and I were just chit-chatting when she mentioned that she was really excited that she was now vested in the 401k plan.

"Vested? I thought we were vested 100% from Day 1. Someone told me that," I responded.

"Check your online statement. You need to be here 3 years."

My initial reaction was irritation because I had asked and had been told that we were vested 100% from Day 1. We apparently that was the way is USED to be. And of course, I was asking the wrong person. Doh!

So I checked my online statement and sure enough the vested amount was about $8,000 less than the total. Damn.

Then I started doing the math. How long had I been at this job? Just over 2 1/2 years. My anniversary date will be in mid-June ... before Jack Bauer should be coming home. So if I want that $8,000 I need to stay until that 3-year anniversary date.

But of course, there is the time value of money. So that $8K is really much more if invested for the next 30 years. Now my retirement planning has consisted of contributing to my 401k and that's about it. I really had no idea how much money $8,000 might grow to be in 30 years. I was thinking like maybe $30,000. That sounds like a motivating factor.

As I drove home, I started thinking that I should find a financial calculator online and see really how much money that $8K might be in 30 years. Maybe it would be worth more. But I was shocked. Try $158,699.19 if invested with an 10% rate of return.

Uh, yeah. That changed my attitude about my job real quick. I've always maintained that the 401k offered by my employer is a sufficient enough reason to put up with a little bit of crap, but I think I just found 150,699 more reasons.

I love my job, I love my job, I love my job. That is my new mantra ... for the next 6 months.