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Changes in 401(k) Contribution: Part II

Posted on Aug 05, 2011 by  in 401(k) Retirement Planning, Retirement Life, Retirement Plans for Business, Retirement Readiness

Our last post highlighted some reasons why some employers match 401(k) contributions and others do not, and it also reviewed ways to determine the right amount for your business to match. Due to today’s economy, numerous business owners have had to review costs and lower spending, which has affected retirement contributions for many. Although most experts agree that the 401(k) match was tripped up by the recession, it is now coming back to life with new characteristics.

Employers are adjusting their formulas, sometimes requiring employees to contribute more of their own money in order to get the full match. Other companies are linking the match to the performance of the business – the better the bottom-line, the bigger the match. Still there are others that are using a competitive match as a key tool to attract and preserve talent.

We too at TSC have seen similar changes to employers matching. The good news is that this trend is contributing to helping employees save adequately for retirement.

For the record, we cannot emphasize enough the plain and simple importance of being retirement ready. With pension plans on the decline and the future of Social Security not looking so secure, healthy 401(k) plans are even more essential. Whether you want to check on the health of your own 401(k) plan or get some advice from an advisor for your business, now is the time for financial security.

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