Workers in a new survey have spoken out: the 401(k) plan is a "must-have" workplace benefit. In fact, when asked which benefits are must haves aside from health insurance, nearly nine in ten workers named the 401(k) - significantly more than those who chose disability and life insurance or even extra vacation days and the ability to telecommute.* It's clear that people understand the importance of this long-term savings vehicle. So what can they - and you - do to maximize its benefits?
There are a number of go-to techniques for making the most out of the workplace 401(k), which for 90 percent of people is the primary means of saving for retirement, according to that same survey. Fortunately, the numbers show that most workers are putting these techniques into practice. Following are some top ways savers in-the-know keep their 401(k) accounts working for them:
- Mind Your Matches - One of the most important things 401(k) savers can do is know if they're eligible for any matching contributions from their employer and then save enough to take advantage of the full match. Not doing so means missing out on additional savings. The good news is, an overwhelming majority (86%) of the people surveyed who are eligible for a 401(k) employer match reported that they are contributing at least enough to receive it in full.
Planning for retirement can be tough, so I hope you'll take a note from the 401(k) participants who are taking the right steps when managing their retirement savings. We know the 401(k) is crucial to retirement for most people, but knowing how to make the most of it is just as important.
*Schwab Retirement Plan Services, Inc. in conjunction with Koski Research, 401(k) Participant Survey, 2014.
** Charles Schwab in conjunction with Koski Research, The New Rules of Engagement for 401(k) Plans, 2010. Retirement plan investment advice was formulated and provided by GuidedChoice Asset Management, Inc.® (GuidedChoice), which is not affiliated with or an agent of Charles Schwab & Co., Inc. (CS&Co.), a federally registered investment advisor; Schwab Retirement Plan Services, Inc.; or any of their affiliates.
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