Investing in a company sponsored 401k program is a financially responsible decision you should be considering. Here are some of the benefits investing can provide to help you prepare for your future.
Automatically Saving
If you choose to opt in to your work’s 401k program, you can have the money automatically taken out of your paycheck. This means that you don’t have to worry about setting aside money on your own and the check you receive is 100% yours. You wont really be missing the money as you adapt to living on your take-home wage, yet your retirement fund will continue to grow. Double check to see if your company has any sort of matching policy as well. If they do, it means they will give you free money just to enroll in their 401k. For example, if you contribute 5% of your earnings into your retirement fund, your company will match your contribution by putting in an additional 5%. It doubles the amount of moolah your putting away each month and doesn’t require you to do anything extra to get there.
Financial Sense
Another benefit of investing this way is that it provides you with two tax breaks. You aren’t taxed on the money you contribute to your savings plan, and it also reduces your gross yearly income which reduces your taxes as well. Additionally, your 401k compounds interest as you go. What does this mean? It means all of your earnings will be put right back into your retirement fund. You will earn interest on your original principle plus interest! It may not seem like much at first, but over the years you’ll be able to see it grow much faster. A 401k is a great way to have your money work hard for you while you sit back and watch it happen!
Keeping it Simple
Investing your money is a full time job. There are thousands of places to invest and it can be overwhelming trying to navigate through it all. When you opt in to a 401k, your money is invested for you by the financial advisors hired by your company. They do take a small fee for their work but it’s worth it for the return on investment you will receive. They are a dedicated team of professionals who are eager to help you grow your retirement savings. Additionally, 401khelpcenter.com states, “With a 401k, you also avoid the minimum investment that many mutual funds require of other investors. These can start at $500 and run up to $10,000 or more.” Through the help of your dedicated financial advisors, you can avoid those large fees and start at a level that’s comfortable for you.
There are so many pros to investing in a 401k. This opportunity is perfect for those who simply want to get their foot in the door and start saving for retirement. Work hard and prepare now so you can have an unbelievable future.