Time to retire

I know this is a career blog but I want you to think about retiring.


We have fantastic retirement benefits at American Family and it’s never too early to start planning your retirement. In fact, no matter where you work, you should start your retirement planning as soon as you start your career, if not sooner.

Here’s what sets American Family apart in the arena of retirement benefits: we offer BOTH a 401(k) with a company match AND a traditional pension plan. We also have a host of other retirement benefits, such as medical and dental insurance and life insurance.

(Obligatory disclaimer #1: Of course, there are eligibility rules for retirement benefits but it’s good to know that these benefits exist.)

(OK, obligatory disclaimer #2: The fact that these benefits exist today does not guarantee that they’ll exist in the future. We don’t have any plans at this time to eliminate anything but our crystal ball can’t tell you what the state of the world will be in, say, 40 years. Our legal department says I have to mention that obvious point.)

Obligatory disclaimers out of the way, let me tell you a little bit about our 401(k) and pension plans.

You can start putting money into our 401(k) plan from day one. There is no waiting period. You can put up to 30 percent of your pay into the plan (up to the IRS limits set annually). We offer both traditional and Roth options, and you can use either or both if you want.

What about the company match, you say? American Family matches dollar-for-dollar the first 3 percent of what you put in. We then match 50 cents on the dollar on the next 2 percent. Bottom line: If you put in 5 percent, the company will put in 4 percent. But the real beauty of the American Family company match is that you are 100 percent vested from day one. Every cent the company puts into your account is yours the minute it goes in, no matter what you do or how long you stay with the company. THAT is a sweet deal!

But wait, that’s not all! Our pension plan is fully paid by the company, and you don’t have to do anything to get in. The plan is what’s called a “cash balance” plan, because the company contributes a certain amount to your pension “account” every year. (You’ll notice the quotation marks. You don’t really have an individual account since there’s just one big pension plan. But we keep track of everyone’s “account” on paper.)

So how much does the company put in? An amount ranging from 3 percent to 10 percent of your eligible earnings, based on your age and years of service. Your “account” also earns interest each year.

To give you an idea of the magnitude of the benefit, here’s a very rough, very fictitious calculation. If you start working here when you’re 24, with a starting salary of $40,000; and you get 2 percent raises every year; and the plan interest is 4 percent every year (the minimum interest possible is 4 percent), when you’re 65 you’ll have over $375,000 in your pension.

If you put at least 5 percent in your 401(k) over those same 40 years, your company matching contributions will be over $100,000. That means over the course of your employment, American Family will provide nearly $500,000 toward your golden years. Almost half a million bucks!

(Alright, obligatory disclaimer #3: The lawyers want me to emphasize the fictitious nature of these calculations. I have to remind you that we are not guaranteeing you’ll get half a million dollars in retirement if you work at American Family. It’s a simplified calculation based on some very generalized assumptions that may or may not be accurate. As they say, your mileage may vary.)

See you at the retiree golf outing!!

***Scott has been with American Family for a little over two years as a benefits consultant in our human resources department headquarters in Madison. In addition to being an HR professional, Scott is a writer wannabe and has written six novels (well, not actually written them DOWN, but the imaginary Pulitzer sits proudly on his pretend mantle!)

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