# 401k Matching Rates

There are a couple of threads here about tug pay and deep-sea pay. It would be interesting to compare 401K matching rates also.

(For you young people, the matching rate is the contribution your employer adds on top of each dollar you put into your 401k retirement fund. Example: If the matching rate is 1%, for every dollar you put in your fund the company matches it by one cent.)

I’ll start off. Where I work at Coastal Transportation Inc. the 401K matching rate is 37.5%. For every dollar the employee puts in, the employer matches it by 37.5 cents, up to the federally-set limit of the employee’s annual contribution.

EDIT 1/26/22: This company, unlike most maritime companies, matches employee contributions, not employee salary. Let’s say a 50-year-old mariner making \$100k/year puts in the federally allowed max of \$27,000. The maximum company contribution would be \$10,125 (37.5% of the mariner’s contribution of \$27,000). If that same mariner contributes only half of the allowable amount, the match would be \$5,062.

This is a different system than most maritime companies.

What are other companies like out there?

[Note: this edit was made after many of the responses below, after I realized how unusual our system is here.)

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I think your definition of matching rate is incorrect.

Typically it’s a percentage of pay - so they’ll match up to 4%, unless you put in less. 4% does not mean 4 cents per dollar that you put in, it’s 4% of your pay, however they define that.

If you tell somebody you get 37.5% matching, that means they’re putting 37.5% of your pay, which isn’t what you’re saying.

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OSG puts in 7% of your base pay plus a fixed amount depending on rank (for mates), something in the mid \$20’s per day of work and vacation. It’s a bit convoluted to try and figure out, but as Chief Mate they were putting in more than I was, and I was at the federal limit.

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Last one I had was dollar for dollar up to 3% and 50% up to 6%.

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Thanks for bring up this issue, because there are two ways a company can structure a 401K plan. One is the way you mention. Where I work it is done another, second way: the company contributes at a matching rate, with the only limit being the federally allowed annual maximum an individual can contribute to their 401K. Whatever you save into the fund, the company matches at the matching fund rate. (Just double checked this with HR).

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So you mean to say that if you put in the federal max (19,500 for 2021), the company puts in 7,312?

That’s not a great deal. Also, there is definitely a limit.

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Depending on your income, may not be able to max out, I am considered a highly compensated employee, I can only match the company average, I get a check back almost every year that I have to pay tax on with a 1099 form, two years ago I lowered my contribution to 6%, last year raised it to 10% and this year back to 15%, over 50 so my limit is higher, think our Match is 50% of 8%

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All Crowley vessels are union so as far as I’m aware there is no company 401k match for mariners in any division.

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Transocean matches at a rate of 2 for 1 up to an employee contribution of 5% so if the employee puts in 5% of their pay Transocean puts in 10% of their pay.

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But, they are contributing to the union pension which makes up for no 401k contribution right?

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Only if you stay with the union long enough to retire with a pension. The benefit of a 401k over a pension is that it is yours to take with you.

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That is what they are banking on, how many people contribute to a union retirement fund and never collect? Me for one, I worked for Crowley from 85-90 out of Seattle, IBU of the Pacific, liked working for Crowley, loved the job but, lost all that money I contributed

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Crowley’s Western Alaska fleet, crewed by the USW, does have matching 401k. 2% for the first year, 4% for the second year, and 6% for years three and beyond.

Correct. Pension that Crowley contributes to and also a MPP that they contribute to of 3.5 percent of your wage whether you come tribute or not. Also SIU offers a 401k but no match from the company on that.

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## 2022 401(k) Contribution Limits

Workers who are younger than age 50 can contribute a maximum of \$20,500 to a 401(k) in 2022. That’s up \$1,000 from the limit of \$19,500 in 2021. If you’re age 50 and older, you can add an extra \$6,500 per year in “catch-up” contributions, bringing your total 401(k) contributions for 2022 to \$27,000. Contributions to a 401(k) are generally due by the end of the calendar year.

A traditional 401(k) is an employer-based retirement savings account that you fund through payroll deductions before taxes have been taken out. Those contributions lower your taxable income and help cut your tax bill. For example, if your monthly income is \$5,000 and you contribute \$1,000 of that to your 401(k), only \$4,000 of your paycheck will be subject to tax. While the money is in your account, it is sheltered from taxes as it grows.

The money can usually be invested in a variety of stock funds and bond funds. Equity funds and target-date funds are both common options in 401(k) plans. (See the best funds in 401(k)s for more on where to invest your retirement savings.)

Many employers also match their employees’ contributions up to a certain percentage of salary. Some companies even contribute to workers’ accounts regardless of whether the employees contribute their own money. On average, companies contributed 5.3% of an employee’s pay to the employee’s 401(k) account in 2019, according to data from the Plan Sponsor Council of America .

## How Much Should You Save for Retirement in a 401(k)?

Experts recommend that workers save at least 15% of their income for retirement , including any employer match. For instance, if your employer contributes 3% then you would need to save an additional 12%.

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Money you put into the 401k is not taxed now but it will be taxed when you withdraw it. So when your employer invests into your 401k it is eventually going to be taxed taxed. The government is making money off of us no matter what. BUT I like the ROTH IRA setup that your money grows tax free and then you can withdraw it tax free. You just pay your payroll taxes on the money you make then invest. However, there is income and contribution limits. I tell younger kids to jump at this option if possible as well as the 401k. HOWEVER the ROTH IRA limit didn’t increase for 2022???

If the government really wants old people to be set for retirement they should set the ROTH IRA limit at 20,500 and allow employers to contribute to that tax free.

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That’s a perennial galley discussion over here: what is better the Roth plan or the traditional plan. Like you said, either way you are going to get taxed.

With the Roth you get taxed to begin with. Taxes are assessed in the year you invest the money in the fund. So when you retire, you don’t have to worry about it.

Other people like the traditional plan, because by tax-sheltering the money for as long as you work you reduce your tax burden during your working years, allowing some people to contribute more to the fund to being with.

Some tug companies are 0%, 3%, or 6%.

Some companies’s 401(k)s vest immediately (the company contribution is your money right away), and some vest a little bit at a time over time.

I’ve seen companies pay a 3% match which vested over five years. 3% is nothing special, and five years is far too long. Work comes and goes; it’s often seasonal. Most tug companies are not stable enough with enough steady work to plan on working for them for five years. I don’t think five year vesting helps to retain employees.

I’ve seen tug companies pay a good 6% match that vested immediately.

Here it’s partially vested after 3 years and fully vested at 6.

Now, is that 6% of your pay, or 6% of your contribution?

I have both traditional and Roth IRAs. I was traditional for a few years, then Roth, then back to traditional.

A traditional IRA allows a guy to defer, let’s say \$2,000 in taxes in 2022 dollars on his contribution, and later repay that at a lower in retirement tax rate, and after inflation with \$2,000 in much less valuable, let’s say 2040 dollars.

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