Our company’s top salesman, also known for his financially savvy, has requested our payroll department max out his 401(k) plan when issuing his commission check on Monday. He is under age 49, so he can contribute up to $15,500 for 2008. This check will include the majority of commissions he has earned this year; allowing him to take advantage of the plan's tax deferral in addition to the down market.
I cannot help but be comforted by his actions. This request comes at a time when I have been trying hard not to panic or do anything rash with my own 401(k). Over the past two weeks, many of my co-workers have stopped contributing to the plan altogether. In a year when this salesman is struggling to maintain his #1 position for the first time in 22 years, he has enough confidence and risk tolerance to pump a large chunk of his paycheck into the market. As he made his request, he said, “With twenty years remaining until retirement I would be crazy to stop contributing now; if the market were to completely collapse, which it won’t, the economy would be in such disarray stopping now wouldn’t make a difference in the long run anyway.”