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Why You Should Always Contribute to a Matching 401k

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    Saving for retirement can be difficult, but one of the easiest things you can do is invest in a 401k if your employer offers one and is willing to match up to a certain amount. If you don't then you are literally throwing away free money being offered to your by your employer.

    Many employers will contribute to their employees 401k in one of four ways - a percentage match, a "fixed" match, a set contribution, or using a special formula. Out of these four, the percentage match is the most common in the workplace.

    A percentage match is when your employer will match whatever amount you contribute to your 401k up to a predetermined percentage. If your employer says they will match your contribution up to 6% of your salary and you are able to manage that much then you are actually setting aside 12% of your salary each paycheck. So if you make $40,000 a year, contribute 6% to your 401k and your employer matches, then you just saved $4,800 in one year.

    If you can't afford to contribute the maximum amount for whatever reason then just contribute whatever you can because the money does start adding up regardless if your employer is matching the full amount of a smaller amount.


    Is anyone currently enrolled in a 401k? If so, are you happy with it or do you think there's a better way to save for retirement?

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    I made the mistake of waiting a few years before contributing to the 401k plan offered to my company and now I'm pretty sure I'm going to have to work years longer than I originally anticipated.