Money Mishaps: Forfeiting Free Funds!
Hi there, Money Masters!
OK, is this weather EVER going to feel like Spring? Well, let’s keep warm by talking about this week’s Money Mishap: saying “No” to a 401(k) match. If your employer offered you more money and said, “you don’t have to do any extra work”, what would you say? I know you wouldn’t say “No”! 😉 A 401(k) can do just that if your employer offers a match.
Some of you might be asking, “Helen, what is a 401(k)?” Well, let me tell you. After all, that’s what I do! A 401(k) is a long-term savings plan that is designed to save money for your retirement. How does it work? Money is taken out of your paycheck every week or month and deposited into an account (you decide how much). The money is then invested so it can grow. Here’s the free money part…a lot of employers offer a match, meaning the company will add money to your 401(k) account! Winning!!!
The IRS has set limits on contribution amounts. For 2018, it is $18,500. If you are over age 50 there is an extra $6000 allowed.
Other benefits to a 401(k) are:
Once you have completed the enrollment paperwork/process it is automatic. Set it and forget it!
Tax breaks: your contributions are tax-deductible.
It’s still yours if you change jobs.