This has become a source of interest for me in the past month or so as a foreseeable career change is about to ensue, so I was wondering what everybody's opinion and experience has been with it.

I guess I should first state that in a previous post, I made an ass of myself and would like to apologize for my ignorance to the subject and am open to all advice given. I have quite a few ideas and questions rolling in my tiny head and am trying to get my finacial ball rolling.

Lay 'em on us.

Basically, a company can set up a profit sharing plan and then pay cash to an account for your benefit when you retire. They do it because it means they are putting money in the pockets of their employees instead of the IRS. Of course, the owners benefit as well so they are doubly incentivized to have such a plan.

If you leave the company prior to retirement, you can usually roll over part or all of that money into your IRA or to the next company's profit sharing plan. Whatever you prefer.

Vesting schedules usually apply, for example, if you leave the company the first or second year, you get nothing. 20% per year after that. Different vesting schedules are seen all the time.

In most cases, you do not get to choose the investments of the money which is fine; it ain't your money yet anyway. More often, they'll let you direct the investment of your vested portion but it isn't really all that common in most PSP's. Still, find out if you get to direct the investment of money in your account.

It's money that just gets given to you so it's not a real concern for you in terms of your actual compensation. It really only makes a significant difference if you stay with a company for a gazillion years (well, 10, probably!) and give it time to vest and build up some value.

401(k) plans are better for you (MOST of the time) but it's different so learn the differences. Some companies have both but they are different animals.

When you leave a company and they give you your profit sharing money, be aware of the tax consequences of HOW they do it. It matters, believe me.

Any other questions, post up. Someone will be able to help you find answers.

--Wag--

Great info man. Thanks.:cheers

You're more than welcome!

--Wag--

Wag gave you some great info and here is a little something off topic...

the best thing you can do if your young is start up your 401k and do it early... dont count on social security b/c your not gonna get it.. and dont count on pension either... if you get it then thats cherry on top of your 401k...

True 'nuff, JetSpeedz. Probably the best advice I could give any one is to friggin' educate yourself. Our schools teach next to zero about financial savvy. However, there is no reason why you can't find the information you need to educate yourself. 10 years ago, you had to go to a library to do it or buy some books. Nowadays, you can do it on your computer from home.

Granted, there is some crappy advice out there but there always has been. Just be smart about it and cross-check yourself on everything. It isn't difficult to do. Do NOT make financial decisions based on emotion. I equate it to walking out of the car or bike or T.V. delerships store empty-handed with the intent of coming back tomorrow if I still think it's a good buy!!

Also, bear in mind, you may find you don't agree with mine or other people's ideologies about money but that's okay. There is more than one way to make or save a buck or two out there.

Eh. Some will read this and go learn and other will foolishly believe they are already "taken care of."

Go forth and conquer!!!

--Wag--