Articles on Stock markets

News, Research and Analysis

Help Center
Investment Portfolios
Investment Terminology and Instruments
Technical Analysis and Trading
Cryptocurrencies and Blockchain
Retirement Accounts401(k) and 403(b) PlansIndividual Retirement Accounts (IRA)SEP and SIMPLE IRAsKeogh PlansMoney Purchase/Profit Sharing PlansSelf-Employed 401(k)s and 457sPension Plan RulesCash-Balance PlansThrift Savings Plans and 529 Plans and ESA
Personal Finance
Corporate Basics

What if the Matching Contribution for My 401(k) is in Company Stock?

Employer contributions in the form of company stock can pose some liquidity issues, but it can also be a nice benefit.

If the matching contribution to your 401(k) is made in company stock, you have to weigh carefully your overall exposure to the financial well-being of your company. You are already receiving the current income (salary) from your employer.

You may also have taken advantage of an Employee Stock Purchase Plan (ESPP) or Employee Stock Ownership Plan (ESOP) outside of the retirement plan. Therefore, you might already have a lot riding on the stability of your company.

Carefully analyze your exposure, and consider selling the stock of your company in your 401(k) if you find your exposure excessive.

Think Enron!

Lockdowns and blackout periods are times when the company will not allow employees to trade their shares of company stock. It could be that all employee’s shares end up on lockdown at the same time that the company share prices are doing a swan dive.

Keywords: retirement accounts, vesting, Enron, lockdowns, blackouts, ESOP,