Do you remember playing with that kid in the neighborhood who set up a game, and then changed the rules as the game went on to suit himself? Just like those games, you’ll never come out winning with your retirement plan if someone else sets – and constantly changes – the rules!
Here’s one of those inconvenient truths: When your retirement savings are in a government-controlled plan sponsored by your employer, your employer can change the rules at any time. And so can the government.
Despite the mass of paperwork your employer handed you when you first began your retirement plan, your employer’s retirement plan rules are not set in concrete. Employers can change their rules, even in midstream.
For example, not too long ago, IBM decided to change its retirement plan rules. Up until that time, IBM gave employees their 401(k) match with each pay check. But some smart bean counter pointed out that Big Blue could save a bundle if they waited to give the match until the very last day of the year instead of throughout the year.