401(k) Center: Employee

 Perhaps you want to start saving but are already living paycheck to paycheck.  Start small!  Often times getting started is the hardest part.  After you have adjusted to the change in your net pay you can make the decision to gradually increase until you reach or even exceed the suggested retirement savings rate of 10% of your annual income.

With a 401(k), your contributions are tax deferred meaning you won’t pay any taxes on that money until you take withdrawals which will, ideally, be after retirement when you are likely to fall into a lower tax bracket.  Also, many employers will offer company matching up to a certain percentage –  this is free money that you do not want to miss out on!

You may be worried about unforeseen expenses and the illiquidity of a 401(k).  This type of retirement plan is a bit more flexible than an Individual Retirement Account in that you can actually take a loan against your vested balance.  In this way, you can still access your funds and pay back the loan without incurring tax penalties for early withdrawals.

Many times people are overwhelmed by their investment options once they have made the decision to participate in an employer sponsored retirement plan.  That’s okay – help is available.  You may not know the inner workings of your vehicle but you do know how to drive.  You do not need investment savvy to begin saving.

According to a recent report [Help in Defined Contribution Plans:  2006-2012 by Financial Engines, Inc.] participants in 401(k) plans who enlist the help of an investment advisor earn an average of 3.32% higher returns annually than those who opt to invest on their own.  With Hillspring Financial, Inc. we will help you assess your personal risk budget so you can invest in a model managed and monitored by trusted investment advisors that has been created specifically for people like you.