Does your firm offer profit sharing?

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Anonymous User
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Does your firm offer profit sharing?

Postby Anonymous User » Wed Nov 23, 2016 2:42 pm

I have an offer from a lit boutique. Among other questions, I asked whether they match 401K contributions; they responded that they don't but that they offer profit sharing, through I "may be eligible for up to 3% of your salary as profit sharing."

Do any of you work at a firm that offers this? How does the 3% max compare? I am class of 2013, and they pay market, so .03 X $235,000 (my projected 2017 salary) = $7,050.

So if I max my 401K at $18,000, this essentially amounts to a roughly 40% match, right? Am I think about this correctly?

Just trying to weigh all of the factors as I consider a competing offer.

onionz

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Re: Does your firm offer profit sharing?

Postby onionz » Wed Nov 23, 2016 3:11 pm

Doesn't it make the most sense to just go back and ask them what they mean by that specifically?

Anonymous User
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Re: Does your firm offer profit sharing?

Postby Anonymous User » Wed Nov 23, 2016 3:36 pm

I'd rather not bother them if I can answer my own questions with the assistance of google and this fine community. Besides, I doubt they are in a position to speak to profit sharing at comparable firms...

Anonymous User
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Re: Does your firm offer profit sharing?

Postby Anonymous User » Wed Nov 23, 2016 3:42 pm

My firm (also a lit boutique) has a profit sharing plan, but it operates differently (generally an allocated portion of bonuses). The positive is that it lets you exceed the $18,000 cap on tax-free retirement savings. But the function of the plan will vary by firm (subject only to constraints imposed by the tax rules). Most firms don't offer any match, so 3% is pretty decent.

Anonymous User
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Re: Does your firm offer profit sharing?

Postby Anonymous User » Wed Nov 23, 2016 8:09 pm

Mine offers profit sharing, and tells you that historically it has been anywhere from 8-10% of your base salary, which is extremely generous. Takes 2 years to vest though.

Anonymous User
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Re: Does your firm offer profit sharing?

Postby Anonymous User » Wed Nov 23, 2016 9:10 pm

My firm had it but it took five years to vest so I essentially knew it was useless.



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