When Amber Steeves started working at Verizon almost 15 years ago, she did one of the best things you can do when you start a new job. She enrolled in the company’s 401(k) program to start saving for retirement.
“I was never financially stable and that was my goal,” she tells CNBC Make It. “Okay, I’m working now, I need to be smart with my money,” she remembers telling herself.
Steeves started at Verizon right after college. Around the same time, he also began making monthly payments on his student debt, which was less than $15,000 when he graduated. Although he now balances his debt payments and retirement savings well, it wasn’t easy at first, she says.
“I was working paycheck to paycheck after graduating school and hitting the job market during the 2009 recession,” Steeves says. “A few times over about six years, I had to ask for options such as reducing my monthly payments or a temporary forbearance due to unexpected life and financial circumstances.”
Verizon offers employees a 6% match on retirement contributions, which Steeves says it has been taking full advantage of “since day one.” But now Steeves, who works as a member of the company’s hosting team, has the opportunity to take even more advantage of his employee benefits.
Last December, Verizon announced that it would begin offering 401(k) matching for student loan payments.
“I felt like April Fools’ Day, I didn’t believe it,” he says. The company, like many others, had a tuition assistance program, but Steeves says he often joked with colleagues or friends at other companies that their employers offered a benefit for educational debt.
“It still doesn’t feel real, even though I signed up, I’ve got it ready,” he says. “I can’t really put it into words because I’ve never heard of a company offering this type of benefit before.”
Making the most of its benefits
Verizon employees are eligible to enroll in the company’s Secure Your Future plan from day one. The plan allows employees to earn 6% of the employer’s full 401(k) match by making student loan payments, making their own 401(k) contributions, or a combination of both.
That means an employee could put 3% of their salary toward student loans and 3% toward their 401(k) and receive a 6% 401(k) match from Verizon. Alternatively, an employee could put a full 6% of his salary toward his loans and still receive a 6% employer contribution to his retirement savings.
Signing up was easy, Steeves says, and he’s using another employee benefit, financial counseling, to ensure he’s making the best decisions to reach his long-term goals.
He currently contributes more than 6% of his salary to his 401(k), but he hasn’t made a final decision on how much he will put toward his debt and his 401(k) in the future. He’s leaning toward prioritizing his debt for a while to pay off his loans.
“I think this is the first time I’ve felt good in 15 years since I graduated as far as focusing and planning to pay off these loans,” he says.
Steeves hopes the Secure Your Future program will help her reach her goal of paying off her student loans in the next five years. Both the program itself and the platform she uses to navigate it have been helpful, she says, because they have helped her visualize and organize what she needs to do to achieve her goals.
“Now I feel more confident,” she says. “I feel much clearer.”
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