May 21, 2018
Many Americans are completely unprepared for their retirement, having put nothing aside over the years, and with pensions on the decline and Social Security at risk of becoming insolvent by 2034, 401(k)’s, are becoming ever more important as a retirement tool.
Despite their importance however, most Americans don’t have access to one, and research has uncovered that a significant proportion of private sector employees over the age of 22, don’t work for companies that offer such plans. For those below the age of 22, the statistics for those with access to employer sponsored retirement plans are even worse, making their prospects even direr.
For those who are fortunate enough to have access to such a plan though, here’s why you should take full advantage of it, as both an employee and an employer.
Why you should offer a 401(k) company-sponsored plan to your employees:
When talking about employee benefits, most workers state that retirement is among the most sought after of all the benefits, as it can give them greater tax savings and go on to not only help employers retain their workforce but may even attract new employees when required.
A 401(k) plan enables you to help your employees save for their retirement and pay less on their short term annual taxable income, while allowing their long-term investments to flourish absolutely tax free until the point of retirement. An employee who is not happy to be offered such a plan will be hard to find, and in doing so, you can save more cash for your company and for your personal savings, too.
Why, as an employee, you should take advantage of an employer match on a 401(k):
Preparing for your retirement may not be something that you relish the thought of, but it’s important to prepare for it as best you can, and to take full advantage of an employer match on a company sponsored plan such as a 401(k).
Young adults are less likely to participate as for them, the thought of retirement is perhaps too far away for them to even think about putting money aside for, or they may believe that they don’t earn enough yet. While the older generation are far more likely to want to participate in such a plan, not all are offered it. But if you are fortunate to be offered a retirement plan, you should take full advantage of it if you want to save on your taxes and be able to cope better when you are ready to retire.
Even if you are a young adult who can’t quite bear the thought of planning for your retirement, it’s highly advisable to make small sacrifices when you are young to prevent you from getting caught out financially when the time does come.
Whatever your age, and whatever type of work you are employed in, don’t wait to find out what your retirement planning options are, get the best advice and guidance possible by seeking professional help today to avoid any financial shortcomings in the future.