Findings from Fidelity suggest that many employees prefer the match and are willing to take a hit on instant gradification for a bigger payoff when retirement comes. Of the workers surveyed more than 4 out of 10 suggested that, if offered, they would prefer to have lower compensation in return for a higher employer contribution to their 401k.
To me this is great news. Why do I feel that this is such great news? Because it shows that there is still a large amount of workers who know the importance of saving and contributing to retirement. Not only do they know the importance of it but they are willing to push away instant gratification in the form of a higher pay check so that they can contribute to a better retirement.
How important are employer 401k contributions? According to the survey they are very important. In fact, employer contributions represent more than 35 percent of the total contributions on average to an employee's workplace savings account. 35 percent is a very significant percent of your total contributions to your retirement account. On top of that they suggest that you contribute 10 to 15 percent of your salary to your 401k. For many workers they cannot get to that 10 to 15 percent without the help of an employer match.
How important is the 401k? It is so important that it is the sole retirement savings account for an ever increasing amount of U.S. workers. Roughly 42 percent indicated that they are not saving for retirement in any other way besides their 401k.
What does all of this data show? It shows that one a 401k is a very important account to help you provide for a decent life while in retirement. It shows that an employer match is also vital to help you create that retirement that you have always wanted. On average over 10 years of saving, the match that employers average can grow to roughly $50,000 and that is assuming only 5% annual returns. It is significant!
Make sure you are on the right track for a proper retirement. Take time to review your retirement as it is an important time in your life. Following the tips from our retirement guide can help you get and stay on the right track for retirement.
If you have any questions about other retirement accounts that you can set up to invest for a great retirement contact us because there are so many things you can do to help you create a great retirement. You can even use your 401k or IRA monies to invest in things other than stocks and bonds. Contact us today to figure out what types of investments you can invest in with your 401k or IRA.
Author: Nick Barker