Approaching retirement can be an exciting time, as you think about the many ways you hope to enjoy your golden years. However, it is crucial to ensure you have enough savings to support your lifestyle during retirement. One of the most effective ways to save for retirement is through an employer-sponsored retirement plan.
If you're working and already saving for retirement or plan to start socking away money soon, educating yourself on how investing in a retirement plan can benefit you is essential. An employer-sponsored retirement plan, such as a 401(k), offers numerous advantages that can help you reach your retirement goals.
A 401(k) is a retirement savings and investing plan offered only by employers. An employee enrolled in a 401(k) plan can have their contributions deducted from their paycheck before taxes, which means potential tax savings and more money going towards retirement.
Catch-up contributions are about to change. Starting in 2024, some workers who make catch-up contributions to employer-sponsored retirement plans will be able to save even more. This change aims to provide additional support for individuals nearing retirement age.
American workers are more likely to remain with their current employer if offered an employer-sponsored retirement savings plan. The availability of such a plan is a valuable benefit that can improve employee retention and satisfaction.
Many workers reach retirement age with no savings. Fortunately, automatic enrollment retirement savings programs are changing that. Employers can automatically enroll their employees in retirement plans, ensuring that everyone has the opportunity to save for the future.
When it comes to retirement planning, Americans are often way behind. In fact, in 2019, almost half of households headed by someone 55 or older had no retirement savings. Taking advantage of employer-sponsored retirement plans can help bridge this savings gap.
The best retirement plan depends on your individual situation. If you have taxable income or work for an employer, you'll probably qualify for an employer-sponsored retirement plan. It is crucial to explore the different options available and choose the plan that aligns with your financial goals.
Benjamin Glasner highlights the gaps in the current retirement system, particularly for low-income individuals. It is crucial to address these gaps and provide better retirement savings options for all workers.
