Important 401K Benefits For Employees To Consider Now

401(k) plans are the most popular way for employees to save for retirement. However, many professionals across a wide array of industries and places of work do not take advantage of the 401(k) plans offered by their employers. This is a foolish mistake that no one should make. Find out 401k benefits for employees that will make you want to capitalize on these retirement savings opportunities below.

Employer Matching

Employers match a certain percentage of employee 401k contributions. This employer match element essentially gives employees like you free money for retirement. That means you will never have to worry about finding high risk loans after you finally leave the workforce. It would be silly to turn down free money. Employer match programs are one of the most considerable advantages to contributing to your 401(k) plan.


It is hard to save money. But, 401(k) plans make it so much easier and more convenient. 401k plans automatically deduct money from your paycheck each pay period. This happens before you even get your check. This is much more conducive to saving for retirement. It is much harder to save money once it is already in your account. If you are bad at saving your money, the convenience afforded by these plans if certainly one of the biggest 401k benefits for employees.

Taxable Income

Contributing to your 401k plan lowers you taxable income. This means less of your hard-earned money winds up in the hands of Uncle Sam, which is always a good thing. After all, that is why people are always trying to find a way around paying the family business tax. As long as you do not withdraw funds from 401k early, you will not have to worry about cancelling out those tax advantages. This is a considerable benefit to 401(k) plans for employees everywhere.


401(k) plans allow for lifetime contributions. No matter how long you are in the workforce, you will be able to contribute to your 401(k) plan until the very end. This is not something offered by other popular retirement accounts, like traditional IRAs. You will also be free from taking required minimum distributions, or RMDs, from your 401(k). You can keep your money working for you as long as you are working. This is one of the 401k benefits for employees that is not offered by any other retirement savings plans.

Compound Interest

The best thing about employer-sponsored 401k plans? Two words: compound interest. Compound interest allows your regular, small contributions to grow into rather large retirement savings. That is, as long as you start early. The earlier you start, the more compounded interest you earn. This is a great way for employees to easily save money for retirement in a way that is realistic for all budgets. It is also not something you can benefit from with mutual funds or other types of investments. Clearly, compound interest is one of the biggest benefits for employees with 401k plans.

If you are an employee of any company that offers a 401(k) plan, and you are not participating in said plan, you are making a huge mistake. Contributing to your employer-sponsored 401k plan is an absolute must for your future financial health, particularly in regards to saving for retirement. If you want to have a significant nest egg to retire on, consider these 401k benefits for employees above. They are sure to make you want to participate in a 401k plan as soon as possible. Your wallet will thank you for it in a couple years.

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