Viral Tik Tok Challenge vs. 401(k): Which Saves You More?

Welcome back, savvy savers!

It’s Emma here, serving up fresh insights straight to your screen. I (like many of us) occasionally pull myself into the digital whirlwind of Tik Tok- the platform where dancing and financial advice can coexist peacefully! That’s how I stumbled upon the viral 100 Envelopes Challenge. As an ardent believer in the power of my saveday 401(k), I had to put the numbers to the test. Which is better at saving me money: the 100 Envelopes Challenge or my trusty 401(k)?

The 100 envelopes challenge, explained

Here’s the brief rundown: whoever wants to participate will number envelopes from 1 to 100. Every payday, an envelope is picked at random, and the participant must stash the amount of cash corresponding to its number inside. Sounds straightforward, right? Now, let’s break down its savings potential. 


If you follow this challenge faithfully after each payday on a bimonthly basis, you’d amass $5,050 over 50 months. Not bad for a social media challenge!

Now, let’s see if it holds up to the mighty saveday 401(k)…

Behold: the power of the 401(k)

Investing in a 401(k) does more than just save. It helps your money grow. That growth is powered by compounding. Let’s see what a 10% return on your account that’s compounded monthly can look like with $5,050.

After 50 months more that cash will be worth $7,642.04 without you having to lift another finger. That’s $2,592.04 more than if you had just let it sit for all that time.

But what if you decided to do the 100 Envelope Challenge and 401(k) investing all at once? Let’s see what you can do when you add $5,050 for another 50 months.

After waiting, $19,206.55 would all be yours. 

If you decide to wait and let it grow for an even longer time, let’s say 30 years, you will have earned $251,777.07 by the end of it.

That’s $239,085.03 in pure profit. 

To sum it all up, I think the 100 Envelope Challenge can be an amazing introduction to your savings potential. But to really unlock your supercharged financial future, a 401(k) is the way to go. Coupling your saveday superpower with this viral challenge can lead to big savings later on. Overall, I’m calling it a win for 401(k)s and a win for people like us trying to save. 

Hungry for more saving insight? Saveday has a buffet of tips and tricks ready for your tastebuds over at their blog. Read on to discover how delicious your future can be!

Happy Saving,

-Emma

Congress Just Made Multiple Employer Plans Accessible. Here’s How Small Businesses Can Benefit.

For small businesses, offering competitive retirement benefits can be costly and complex. But the tides are changing with the SECURE Act 2.0. This recent legislation introduces enhanced Multiple Employer Plans (MEPs). This allows businesses, irrespective of their size or industry, to pool resources and provide joint 401(k) plans to their employees.

At its core, MEPs under the SECURE Act 2.0 offer a streamlined approach to retirement planning, thus making it more accessible and efficient for small businesses. Here’s why that matters:

  1. Reduced Administrative Load:

Joining a MEP lessens the administrative burden placed on small businesses. In essence, most responsibilities are shouldered by the MEP provider. This consequently minimizes paperwork and compliance issues for participating employers.

  1. Cost Efficiency:

Pooling resources with MEPs often means reduced fees and potentially superior investment choices, which leads to noteworthy savings for small businesses.

  1. Competitive Benefits:

MEPs empower small businesses to present retirement plans that rival those of big corporations. Therefore, this helps ensure they attract and retain talented employees.

  1. Risk Management:

The collaborative nature of MEPs diminishes fiduciary risks for individual employers, as these are often shared or completely handled by the MEP provider.

Your partnership with saveday can make navigating these changes even simpler. We’re designed to guide businesses through retirement nuances at $0 cost to them. With the SECURE Act 2.0, and the potential of MEPs, small businesses are in a stronger position than ever to secure a better retirement future for their workforce. You can help ensure a brighter future for your team by partnering with saveday today. 

Understanding 401(k) Vesting: Securing Your Retirement Funds

Hey savvy savers!

Emma here, back with another dose of financial wisdom. Today, I’m diving deep into a term that floats around a lot with 401(k)s: vesting. Unfortunately, it’s not about thrifting a quirky vest with your friends (but I’m free Saturday if that sounds fun to anyone else). Vesting, in the 401(k) world, plays the role of determining when you officially “own” your retirement fund. 

What Is Vesting?

Vesting refers to the amount of time you need to be with your employer before you “own” or have the full right to the employer contributions made to your 401(k) account. Now, you always have 100% ownership of the funds you contribute from your paycheck. The schedule comes into play with the additional funds your employer might toss into the mix. 

Types of Vesting Schedules

  1. Immediate: You own 100% of your employer’s contributions as soon as they hit your account. So, if you decide to leave the company, you can take all of those contributions with you. Cha-ching!
  2. Graded: Here’s where patience pays off. With graded vesting, a specific percentage of your employer’s contributions becomes vested with each year of service. For example, after year one, you might be 20% vested, meaning you own 20% of your employer’s contributions. This percentage typically increases each year until you reach 100% vesting.
  3. Cliff: With cliff vesting, you’ll have to work for the company for a specific period (often around 3 years)  before you’re 100% vested. If you leave before this period, you might forfeit all employer contributions. But once you’ve reached the “cliff”, you’re fully vested. 

Why It Matters

Vesting is an incentive. Companies want talented employees (like us) to stick around. Offering a 401(k) match is attractive, but they might not want to hand over all those funds immediately if there’s a change you might leave early. The vesting schedule ensures that you’re rewarded the longer you stay. 

Navigating Your Vesting Schedule

First things first: check your 401(k) plan details or chat with HR. Know where you stand. If you’re considering a job change and you’re close to being fully vested, it might be worth waiting a bit, so you don’t leave money behind.

Saveday has been a lifesaver for working through nitty gritty details like these. Find out more tips and tricks with their blog here.

Until next time!

-Emma

401(k) Saving Tips for Millennials with Student Loans

Welcome back, savvy savers!

Emma here, with a fresh coffee and fresh insights! Let’s get real, millennials. It seems like every headline is telling us about the future we can’t have. Ready to flip the script? This blog post is about becoming the saver you want to be, even with student loans. It really is possible to save without compromising the little things you love. Let me show you how saveday did that for me. 

Mapping the Terrain: the Millennial Dilemma

Millennials, often tagged as the “student loan generation”, find themselves in a tight bind. On one hand, there is the burgeoning weight of student loans, on the other, there’s the pressing need to kick start retirement planning. It may seem like standing at the crossroads, but guess what? You can still have it all.

Building Your Nest Egg Despite Debt: 

  1. Balance Payments and Contributions
    1. Automatic Contributions – Easy Money: Most people don’t know that 401(k)s can actually grow for you. You don’t even have to think about it! By automating your contributions, you ensure a portion of your salary is consistently funneled into your retirement account. It’s hassle-free, and basically qualifies you to call yourself a finance guru!
    2. Employer Match – Your Golden Ticket: If your employer offers matching to your 401(k), they’re giving you extra money in addition to your paycheck. By claiming it, not only are you getting more money now, you’re also letting it grow automatically in your 401(k) account. 
  2. Budget Without Sacrificing What You Love
    1. Compound Interest – Money That Works for you: Time and money are your power duo. Thanks to compound interest, the money you save now can generate more money. It snowballs on itself so that even just $1 a day can mean thousands tomorrow. The longer your money stays invested, the more it can grow. That’s the magic of “earnings on earnings”. But it also makes it crucial to claim your 401(k) as early as possible. 
    2. Know What It Will Take: Clear achievable goals don’t have to be daunting. First, determine the lifestyle you want for your retirement. You’re in control here. Saveday’s tools can help you figure out the daily steps for you to get there!
  3. Embracing Flexibility
    1. Find Your Investing Power: Understanding your risk tolerance is more important than most realize. A diversified portfolio helps to balance returns while minimizing risk. Saveday utilizes the Nobel-Prize-winning Modern Portfolio Theory, which specializes in minimizing risk for maximum returns. Stay informed and check out more of saveday’s blog to see just how much saveday can be your saving superpower. 

The Saveday Difference

Let’s be real. This “adulting” thing is hard. Saveday has helped me know that I’m not alone when it comes to finance. Their intuitive tools and resources are designed to empower people like us. It really does make saving smoother and more attainable. Here’s two ways you can seize the savings today…

  • Educational Resources: Take a peek in saveday’s playbook to navigate the nuances of balancing debt and saving with ease. 
  • Personalized Guidance: Start personalized saving now. Saveday provides a free quiz to help you visualize your saving path. You can start being the saver you always wanted to be here.

At the end of the day, remember your financial success journey is a marathon, not a sprint. With the right planning and support, you can dance gracefully through student loans and debts to earn the blossoming retirement garden you deserve. 

Here’s to mastering the art of financial balance, one step at a time!

Let’s get saving!

-Emma

New Job? Here’s What You Can Do With Your Old 401(k)

Welcome back, savvy savers!

It’s Emma, again (who’s still trying this whole saving thing)! Today we’re navigating a topic many of us will face at some point in our careers: when switching jobs, what do I do about my 401(k)? It’s an exciting (but definitely nerve-wracking) phase. Between the inevitable LinkedIn update and making the oh-so important decision that is your first-day outfit, it’s nice to know at least one major decision is in good hands. Saveday helped guide me through my options, so I’m here to pay it forward! 

A Glimpse at Your 401(k) Choices

1. Let It Be:

What it entails: Letting your cash stay put in your prior employer’s 401(k) setup. It’s the path of least resistance for many.

Upsides: The comfort of known investment avenues.

Downsides: Risk of a fragmented retirement plan over time, the potential lure of better options elsewhere, and the need to juggle plan particulars. The provider may have time limits on holding accounts for inactive employees, meaning the money could be returned to you in the form of a check if you don’t take action on it before the deadline. Then you’ll need to move the money into a new retirement account or face the possibility of penalty taxes.

2. Roll It Over:

What it entails: Funneling your former 401(k) assets into your new employer’s plan.

Upsides: Streamlined retirement funds, possibly superior investments or fewer fees.

Downsides: Potential rollover restrictions or hoops and the hustle of paperwork.

3. Cash Out:

What it entails: Withdrawing your 401(k) dollars, right here, right now.

Upsides: Immediate funds for emergencies or pivotal expenditures.

Downsides: Penalties for those below 59 ½, taxable withdrawals, and truncating your retirement growth.

4. Shift to an IRA:

What it entails: Redirecting your old 401(k) into an Individual Retirement Account.

Upsides: Augmented investment horizons, coalesced accounts, and tax-free direct rollovers.

Downsides: Greater autonomy may need more of your time, and watch out for provider fees.

Your Savvy Saver Checklist

Fees: Every 401(k) comes with a price tag. Always evaluate your option’s economic viability. Here’s where saveday’s candidness on pricing stands out.

Investment avenues: Ensure your pick resonates with your investment philosophy and risk appetite. Dive into saveday’s swift quiz to decode yours.

Taxes: Everyone’s (least) favorite subject! The timing of your 401(k) moves can influence your tax savings. Saveday has great guides for optimizing this.

In essence, those are your moves. Remember, every twist and turn on the savings route is a learning curve. With the right insights and tools, you’re not just saving; you’re building the future you deserve. 

The Saveday Edge

Job transitions are a whirlwind, even without the added 401(k) puzzle. That’s where saveday came in handy for me. Their user-centric dashboard coupled with a goldmine of informative assets demystifies the decision labyrinth. Rolling over? Consolidating? Or keen to up your knowledge quotient? Saveday’s got your six. Check out their blog to learn more.

Best of luck,

-Emma

Boosting 401(k) Participation: The Power of Automatic Enrollment for Small Businesses

Small business leaders know ensuring financial wellness is paramount. Optimal participation in 401(k) plans can be your big solution to give your employees and business the future they deserve. The answer is simpler than you think: Automatic Enrollment. 

Understanding Automatic Enrollment

Automatic Enrollment is straightforward. When new employees come on board, they are automatically integrated into the 401(k) plan. They, however, maintain the choice to opt-out if it doesn’t align with their financial plans. What seems like a small adjustment can significantly elevate participation rates.

Data Speaks Louder than Words 

  1. Increased Participation: Vanguard’s recent findings emphasize the efficacy of automatic enrollment. An impressive 90% of newly hired individuals stay committed to their employer’s plan for at least three years after their auto-enrollment.
  2. Reaching the Underrepresented: The study also underscores automatic enrollment’s role in democratizing savings. It remarkably boosts 401(k) participation rates among historically underrepresented groups, such as the young, those earning lower wages, and minority employees.
  3. Simplifying the Process: The true genius of automatic enrollment resides in its streamlined approach. It transitions those who might never contribute into proactive savers. Over time, this not only bolsters their financial standing but also fosters a sense of security and well-being. Even just $1 a day can mean thousands in the future.

Why Saveday Champions Automatic Enrollment

At the heart of saveday lies a commitment to amplifying employee savings without any added burden on employers. We’ve meticulously crafted our platform to be in perfect sync with businesses keen on embracing the future. When savings become an effortless endeavor for your employees, it directly correlates with heightened job satisfaction and unwavering loyalty.

Incorporating automatic enrollment isn’t merely a tactical move—it’s a visionary step. It empowers you to proactively confer a straightforward yet potent benefit, shaping a financially robust future for your workforce.