401(k) savers can access one of the 'rare guarantees' in investing, CFP says

Published On Sep 20, 2024, 1:40 PM

The article discusses the value of 401(k) matching contributions by employers, which are often viewed as 'free money'. Most companies offer a matching contribution where they contribute to employees' retirement savings based on the employees' contributions, sometimes doubling their savings. This matching segment is crucial for long-term retirement investment as it can significantly increase an employee's retirement fund. However, there are typically vesting requirements, meaning employees may need to stay with the company for a certain period before they fully own the matching contributions.

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Given that many employers are increasingly adopting or maintaining competitive 401(k) matching programs, this could lead to a more engaged workforce and higher employee retention rates, indirectly benefiting companies in the long term. Investments in companies with strong employee benefits, especially those providing favorable retirement match programs, could be attractive.

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