- Why Start Now?
- Ask These Questions
- Make Enrollment Decisions
- Get Matching Contributions
- Tools & Calculators
Enroll in Your 401k Retirement Plan
It’s decision time. Keep reading for factors to think about as you consider enrolling in your 401k retirement plan.
Take control of your own future.
It’s great if you already have a pension plan. But remember companies can discontinue their pension plans at any time, so it's important to take care of yourself. Opening a 401k retirement account through your employer may help you better reach your retirement savings goal.
Invest automatically.
Your contributions are deducted from your paycheck and go directly into your account before taxes are withheld – so you may barely miss the money. Use our paycheck impact tool to see how little impact contributions have on your take-home pay.
Get the match.
Your company may match a certain percentage of the money you put into your account. Most companies do. That’s free money for participating in your retirement plan.
Consider going for the max.
Take full advantage of the tax-deferral by contributing the maximum amount allowed by your company. Check with your employer for limits and details. Please keep in mind that all investing involves market risk, including the possible loss of principal.
Get more bang for your buck.
If you contribute the same amount of money regularly, you’re using an
investment strategy called “dollar cost averaging.” This method averages
out the price you pay for the investments in your account, so you’re
buying more when the price is lower and less when the price is higher –
giving you better buying power.
| Amount Invested | Unit Price | Shares Bought | |
|---|---|---|---|
| January | $200 | $12 | 16.67 |
| February | $200 | $11 | 18.18 |
| March | $200 | $9 | 22.22 |
| April | $200 | $8 | 25.00 |
| May | $200 | $9 | 22.22 |
| June | $200 | $10 | 20.00 |
| Total | $1200 | $59 | 124.29 |
Although dollar cost averaging is a good method for long-term investing without having to navigate market fluctuations, you aren't guaranteed a profit or protected from loss in a declining market.
Get the tax benefit.
Your retirement plan contributions are tax-deferred, which means you don’t pay taxes on the money in your account until you take it out – usually, when you’re retired. You may be in a lower tax bracket then.
Plan fees information
There are fees and expenses associated with retirement plans. If you have a retirement plan with Nationwide, look up fees for your plan, a comparison of investment options, and a glossary of investment terms.
Choose your investments.
You decide how your money is invested inside your 401k. Talk to your investment professional about the best investment strategy to help you reach your retirement goals.
Avoid penalties
Since 401ks are designed to help you save for retirement, there are stiff penalties for taking your money out early. You’ll owe income taxes on the total amount and, if you're younger than 59½. You may also owe a 10% early-withdrawal penalty. Plus, the IRS requires your employer to withhold 20% of your account value to pre-pay at least part of the taxes you’ll owe.
Next Steps
Ready to take the next step toward the retirement you want? Talk with your employer about how to enroll.
