401(k)s & IRAs For Dummies

Chapter 23

Ten Reasons to Participate in a 401(k)

IN THIS CHAPTER

Doing yourself a favor by participating

Growing your money

Taking your 401(k) with you to a new job

Supplementing Social Security

You have absolutely no reason not to save for retirement — especially if your employer makes it easy by offering a 401(k) or similar plan.

This chapter offers the obvious and not-so-obvious benefits of 401(k) plans.

You Can’t Afford Not To

Most people can find $20 a week if they really try — that’s about $1,000 a year. Invest $1,000 a year for 40 years, at a 9 percent annual return, and you end up with $338,000. That’s certainly better than nothing — and you’ll probably be able to afford to save a larger amount sooner than you think.

Don’t make the common mistake of expecting it to get easier to save after you start making more money. It never gets easier, so start now. Most people can find ways to reduce expenses without feeling any pain. See Chapter 11 for some suggestions. Also, a tax credit is available to retirement plan participants with low and moderate incomes. Details are in ...