When you get your first job that offers a 401K savings plan for retirement, it is in your best interest to participate, according to the AllstateBlog. One reason is that many companies match a portion of your contributions to a 401K plan. Basically, you are getting free money that you wouldn’t otherwise receive if you didn’t have a 401K. Another reason for contributing is the tax benefits. Money contributed to a 401K is deducted from your paycheck before you pay taxes. This gives you a smaller salary (on paper), and you could pay less tax. Finally, 401K benefits are portable between jobs, Allstate Blog notes. If you get a new job in a few years, rest assured that you can take your retirement account with you. The best reason, though, may be that you are taking an active step in planning for life after work. Whatever life throws you, you’re taking positive steps to be financially prepared.
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Why Saving for Your 401(k) Matters: 3 Reasons