This is the time of year many of us sign up for our health benefits. It’s also a good time to look at all of your finances, especially your retirement accounts, to see what’s working and what’s not.
A newly released report shows more employers are offering plans to help people save for retirement however, many people are failing to take advantage of one free work benefit – their employer match.
According to Aon Hewitt, "nearly 30 percent of 401(k) participants don’t contribute enough to get their full employer match." That's giving away free money.
Here’s an example that may make you think again:
Say you're 30, make $40,000 and contribute 3 percent of your salary -- $1,200 -- to your 401(k). Assume that you continue to make the same salary and contribute the same each year until age 65. After 35 years you will have put $42,000 in your account. However, if you're like many people who get a dollar-for-dollar match up to 3% of your salary and take full advantage of the match, that doubles your money to $84,000. And that's before factoring in profits on your investments, so the gains might even be bigger. Of course, as with any investment, you can lose money too. But you are certainly starting out ahead of the game with those matching funds.