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This paper is for Murphy Oil employees who will have to know the basics of their 401(k) plans, including the role of the company's contributions and the way the assets are invested in order to understand the basics of the retirement planning process.'
'['Free' means that, as a Murphy Oil employee, you can optimize your retirement savings and, thus, your future financial independence by frequently checking and changing your 401(k) contributions, as well as by consulting for a Roth 401(k)].
In this article, we will discuss:
1. How to increase your chances of retirement savings by taking advantage of employer contributions.
2. What are the conditions under which you own the company contributions? Do not miss the money! A simple guide to the basics of stock investing within your 401(k) plan.
3. It is not intended to be an exhaustive treatment of the subject, but rather a general introduction that will help you understand the basics and consider whether or not to participate.
In a time of increasing financial complexity, it is essential to know how to make the most out of your savings, especially when you are planning for your retirement. The 401k plan has been and will be one of the best ways to build wealth over the long term. However, as with any instrument, its effectiveness depends on the user’s understanding of its capabilities and potential risks.
Harnessing Matching Contributions:
Most of the Murphy Oil companies provide for matching schemes under which they pay for a certain percentage of the amount an employee places into a 401k. On average, companies match 4.5% of employee contributions, as per Vanguard’s annual report. Although this percentage may not be very high, it can amount to a lot of money over the years. When you include the interest that is charged on the account, this can make for a good retirement portfolio.
Vesting Requirements - Patience Pays:
Vesting refers to the conditions under which an employee is entitled to the company contributions to a 401(k) plan. Two main types are:
Cliff Vesting: Contributions are fully vested at the end of the set period, which is usually three years.
Graded Vesting: The employer’s contributions become vested at 20% annually from the second year and at 100% by the end of the sixth year.
Thus, if you change jobs before your contributions become vested, you will deny yourself access to the money. So, it is important to know your company’s vesting policy.
The Risk of Company Stock:
While it may be tempting to invest in your company’s stock, it’s wise to limit such investments to 5-10% of your total 401(k) assets. This is because too much money is at risk in the event the company is not doing well.
The Dual-Edge of Stock Investments:
Equities, or stocks, shouldn’t be avoided entirely. Although they are risky, very conservative products may not perform well versus inflation, and, thus, reduce your buying power in the future. This is where balanced equity investments come in to help with this.
Sources:
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1. Internal Revenue Service (IRS). 'Matching Contributions Help You Save More for Retirement.' IRS, https://www.irs.gov/retirement-plans/matching-contributions-help-you-save-more-for-retirement . Accessed 17 Feb. 2025.
2. Internal Revenue Service (IRS). 'Retirement Topics - Vesting.' IRS, https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-vesting . Accessed 17 Feb. 2025.
3. Empower. 'What is 401(k) Matching & How Does It Work?' Empower, https://www.empower.com/the-currency/work/how-does-401k-matching-work . Accessed 17 Feb. 2025.
4 Investopedia. '401(k) Vesting Rules.' Investopedia, https://www.investopedia.com/401-k-vesting-rules-5323652 . Accessed 17 Feb. 2025.
5. National Council on Aging (NCOA). 'Leverage Employer Matching Contributions to Your 401(k).' NCOA, https://www.ncoa.org/article/matching-contributions-101-how-to-maximize-your-retirement-savings-now . Accessed 17 Feb. 2025.
What type of retirement plan does Murphy Oil offer to its employees?
Murphy Oil offers a 401(k) retirement savings plan to its employees.
How can employees of Murphy Oil enroll in the 401(k) plan?
Employees of Murphy Oil can enroll in the 401(k) plan through the company’s HR portal or by contacting the HR department for assistance.
Does Murphy Oil match employee contributions to the 401(k) plan?
Yes, Murphy Oil provides a matching contribution to employee contributions, subject to specific terms and conditions.
What is the maximum employee contribution limit for Murphy Oil’s 401(k) plan?
The maximum employee contribution limit for Murphy Oil’s 401(k) plan follows the IRS guidelines, which may change annually.
Can employees of Murphy Oil take loans against their 401(k) savings?
Yes, employees of Murphy Oil may have the option to take loans against their 401(k) savings, subject to plan rules.
What investment options are available in Murphy Oil's 401(k) plan?
Murphy Oil’s 401(k) plan typically offers a variety of investment options, including mutual funds, stocks, and bonds.
Is there a vesting schedule for the employer match in Murphy Oil’s 401(k) plan?
Yes, Murphy Oil has a vesting schedule for the employer match, which determines when employees fully own the matched contributions.
How often can employees change their contribution amounts in Murphy Oil's 401(k) plan?
Employees of Murphy Oil can change their contribution amounts during designated enrollment periods or as specified in the plan documents.
What happens to my 401(k) if I leave Murphy Oil?
If you leave Murphy Oil, you can roll over your 401(k) balance to another retirement account, cash out, or leave it in the plan, depending on the plan’s rules.
Are there any fees associated with Murphy Oil's 401(k) plan?
Yes, there may be fees associated with Murphy Oil's 401(k) plan, which are outlined in the plan documents provided to employees.
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