Is a 401k Worth It?


You know that it’s never too early to think about retirement planning, your issue is the method people default to. Your company offers a 401k retirement plan and it seems like everyone else you know has one. 

We’ve all seen the stock market fluctuate widely over the past few years. On top of that, with new exciting ways to invest like cryptocurrencies being available the big question on everyone’s mind this, “is a 401k worth it anymore?”

There may be other options newer available to you, but we’re firm advocates for the tried and true. Here’s why you should plan to put money into your 401k. 

No-Thought Savings 

Sometimes the hardest part of saving is having to put the money away somewhere. It can be tough to move a couple hundred into a retirement account when you’re thinking of everything you could use to pay for things now. 

A 401k can take the guesswork (and pretty much all of the work) out of having to save. You can easily set up automatic deductions each pay period so you don’t have to think about things. 

Before Tax Contributions 

Retirement taxes are one of the biggest concerns for people planning for the future. You want to get the most out of your hard-earned money, and paying high taxes could be putting your future plans on hold. 

This by far is one of the most important reasons why we believe 401k plans are worth the trouble. You may not know this, but the contributions you make to your 401k come directly from your paycheck before taxes are taken into account.

Curious why having before-tax contributions matter? The money you put into your 401k doesn’t count towards taxable income. That could put you in a lower tax bracket and help your tax bills for years to come. 

This also helps investors grow their savings without having to worry about being taxed. As long as your money stays in the account taxes won’t be a concern. 

Company Match Benefits 

If your company is offering a 401k plan, be sure to ask if they match contributions. Any 401k account that comes with an employer match should be one you sign up for. 

Employer contributions are essentially free money from your company. They agree to match whatever amount you’re paying, and you can sit back and reap the benefits. This can help significantly grow your savings over the years. 

Move With Ease

You started your 401k with your current employer, but you’re going to be leaving for a new job soon. Does that mean it’s time to close this account? 

Some people make the false assumption that they have to start over once they go to different employers, but your 401k can go wherever you go! You can choose to roll your 401k into your new account or continue to contribute to the one you have. 

Is a 401k Worth It: The Ultimate Answer

If you’re asking yourself the question “is a 401k worth it”, know that the answer will come down to your personal preference. Remember, you can still invest in plenty of other things alongside your 401k. It doesn’t have to be an either/or situation, any way you choose to save for retirement is good!

Do you have more finance questions around retirement, saving, or just how to get better with money? Keep browsing our finance content so you can learn how to master your money.