Why Participate?

Why You Should Participate in a Retirement Plan

Does your employer offer a retirement plan like a 401(k), 403(b) or 457 deferred compensation plan?

If the answer is yes and your employer matches a portion of contributions, consider participating. If you don’t, you could be missing out on free money. Many employers match contributions up to a certain limit; for example, 50 cents for every dollar you invest up to 6% of your salary.

Keep in mind that the employer match may be subject to a vesting schedule. Withdrawals are taxed as ordinary income and, if taken prior to age 59½, they may be subject to a 10% penalty. Investing is subject to market risk, including possible loss of principal.

Give yourself a raise through your retirement plan

If you don’t contribute to your retirement plan, neither does your employer – and that potential benefit is left on the table. Not getting your company’s matching contribution is like volunteering to take a cut in benefits.

Start planning for retirement now

It’s never too early to plan for retirement. Contact your company’s human resources representative to see how you can get started. Prepare to ask questions about plan features. Be sure you know the ins and outs of your employer's retirement plans and other retirement planning options.