Take a look at this article from Smart Money about a new law that will allow companies to set employees up for automatic contributions to their 401(k) accounts. It will also allow a company to automatically increase an employees contributions to a 401(k) each year up to a certain cap percentage.
According to the article, about 25% of eligible employees choose not to participate in their 401(k), and only 11% of the employees that do participate will max out their contributions. It’s understandable why some people don’t contribute the maximum amount, but to not participate at all, is detrimental to your financial well-being. Many companies offer a company match, which is FREE money. You’ll never have anyone offer you free money the rest of your life, so why not take it?
Can’t afford to contribute to your 401(k)? How do you know? You’re used to balancing your budget on the amount that you currently take home, but if you made a few adjustments, you could find enough money to start contributing to your plan. The best thing about a 401(k) is that you start to forget about the money getting taken out. Before you know it, you’ve socked away a big chunk of cash that will continue to grow exponentially.
If you want more information about 401(k)’s and what funds to invest in, check out the related articles below…