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Money Minute: Top Reasons Why You Need to Participate in Your 401(k)

Money Minute: Top Reasons Why You Need to Participate in Your 401(k)


Employer-sponsored retirement plans such as 401(k)s are some of the most powerful retirement savings tools available. Studies show that many Americans are not taking full advantage of this benefit. If your employer offers such a plan and you're not participating in it you should be.

Here are some of the top reasons why:

  • Employer Matching Contributions

    Many 401(k) plans offer a provision in which the employer will match all or part of the employee’s contribution up to a certain level. If your plan offers a match, make sure you maximize this benefit and don’t pass on free money.

  • Automatic Savings

    Automatic contributions from your paycheck creates a habit of saving for your retirement without much effort or discipline. After a few pay periods, you may never miss the money – out of sight, out of mind.

  • Tax-Deferred Savings and Investing

    Contributions from your paycheck can be made before state and federal taxes are withheld, lowering your current taxable income. In addition, investment earnings in the account are not taxed until you withdraw money from your account, which allows your retirement savings to grow faster.

  • Personal Investment Guidance

    Participating in a 401(k) plan is a great way to get access to a personal advisor to help with investment selection and determining how much you need to save to meet your retirement goals. Taking the initiative to meet with your plan’s advisor is often the most important step to getting the most out of this benefit

SVA Plumb Financial offers business retirement plans and our advisors can assist you with making the most of your 401(k) plan.

All information herein has been prepared solely for informational purposes only and opinions are subject to change. Past performance is not indicative of future results and all investments involve the risk of loss of principle. For information on how these general principles apply to your situation, consult an investment professional.

Article Topic Expert: Sean Cote

With more than fifteen years of experience in retirement planning, investment consulting and futures trading, Sean specializes in helping businesses understand how qualified retirement plans work and what options will best meet their specific needs. In his prior role with WHA Financial Solutions, a subsidiary of the Wisconsin Hospital Association, he provided research and reports for investment committees of hospitals to assist in the selection and ongoing monitoring of investments for the retirement plans of those institutions.

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