When you first take a new job your new employer is throwing a lot of new information at you about your benefits, let alone your actual new job, and something like a 401k match can easily get overlooked in the mix. You’ll want to find out if your company offers one, and what that match is, however because it’s something you definitely don’t want to be missing out on.
A 401k is a retirement savings account that you set up through your employer. A percentage of your income, traditionally before taxes are taken out, is contributed to the account and invested in a plan of your choosing. These investments consist of money market accounts, stocks, bonds, etc and will earn you returns over the years.
To encourage employees to take advantage of this great opportunity, and as a benefit to your employment, many employers will offer to match your contributions up to a certain percentage point. That means that if your employer is offering to match you up to three percent, then if you contribute three percent of your income they will also contribute that amount to your account. This is payment from your employer that you won’t be seeing anywhere else, so if you don’t take advantage of it, you’re missing out on money.
Something like three percent may sound like a very small amount of money, but over the years until you reach retirement age, fifty nine and a half years old, that small amount of money will be invested and earn you returns each year. By the time you’re ready to retire that small amount will have grown into a respectable nest egg that will allow you to afford to retire.
If you aren’t aware of whether your company matches 401k contributions contact your human resources department and find out today so that you don’t miss out on any more money for your future.
Knowledge is power, become more informed about all your options by visiting IRA and 401k for all the information you need, including information about retirement balances, cashing out, and the 401k withdrawal penalty.