09/23/2014 04:50 pm ET Updated Nov 23, 2014

This Year's Must-Have Benefit: The 401(k)

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.
  • Pump Up Your Contributions - It probably doesn't come as a surprise that contributing more to your 401(k) can result in having more dollars stashed away for your retirement. But the tendency can sometimes be to pick a contribution level and stick with it. While I always encourage workers to contribute at least enough to take advantage of their company's matching dollars, that's really just the starting point. The reality might be that you need to save much more to meet your retirement goals. Many plans offer an auto-increase feature, which bumps up your savings level automatically every year. About 57 percent of those surveyed said they've increased their 401(k) contributions in the past two years. This is a good start, but there's definitely an opportunity for more of us to be mindful in this area.
  • Leave Loans Alone - Many 401(k) plans offer participants the option of taking loans against their account, but this should really only be done as a last resort. Taking a 401(k) loan can have major tax consequences and can potentially derail your path to a comfortable retirement. Nearly three-quarters of those surveyed have never taken a 401(k) loan, and I'd encourage you to take their lead since that quick cash fix may not be worth the long-term consequences.
  • Ask for Directions - While it's great to take the reins when it comes to your retirement, sometimes the best thing you can do is ask for help. Whether you're just starting out or could use a little guidance in choosing appropriate investments at any point in your career, make sure to take advantage of any professional advice available as part of your 401(k) plan. We've seen that participants who used third-party, independent 401(k) advice tended to increase their savings rate, were better diversified and stayed the course in their investing decisions.** Moreover, the majority of respondents in the recent survey say they would feel extremely or very confident in their ability to make the right investment decisions if they had the help of a financial professional.

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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