A 401(K) is a tax favored retirement savings account offered by employers.  The high contribution limits and tax benefits of a 401(K) make it a great way to save for retirement.

Many employers offer a matching program, to add incentive for participants to contribute to their retirement savings.  This is the easiest money you’ll ever make.
Every 401(K) plan is different, so it’s important to understand the rules of your employer’s plan.

For example, if your employer offers a $1 for $1 match up to 4% of your salary – you should contribute a minimum of 4% to ensure you obtain the full employer match.

Depending on your situation, most financial planners recommend saving 10 to 15% of your income for retirement.  This can be a stretch for some, but an employer match can help you get closer to that goal.

What if my employer doesn’t match my contributions?  Then does it make sense to participate?  Yes, because the dollars you contribute reduce your tax bill and have the opportunity to grow tax deferred.   See our next post in our 401(K) Series or feel free to contact a Haven Wealth Group advisor for additional information.