National Debt Relief Tackles Dos And Don’ts of 401(k)

National Debt Relief recently shared in an article published June 25, 2015, some of the important things consumers need to know about their 401(k) account. The article, titled “The Biggest Dos and Don’ts of A 401(k),” lists down some of the things people need to remember about their retirement fund.

The article starts off by pointing out that the 401(k) is one of the retirement accounts that consumers can bank on when the day comes that they have to stop working. This is even more ideal because some companies offer to match the employee’s contribution. Meaning some might cough up a dollar for every dollar an employee puts into their 401(k) account. But as great as it is, consumers need to understand the account better.

The article starts off by by explaining how it is important for consumers to remember that if they are not earning much, they need to start saving for their 401(k) as early as possible. This has a lot to do with the compound interest on the fund. If consumers save just a little cash and give it a lot of time to grow, this will be better than saving a lot of cash but for a short period of time.

Another one is a favorite of most employees which is the matching program of a company for their 401(k). This basically allows the employees to almost double their 401(k) contributions because of their employer’s generosity. As good as this sounds, consumers need to know what the vesting schedule is of the company.

The company may match an employee’s 401(k) contribution, but they can put in a stipulation that says that if the employee leaves the company within three years, they can take what they contributed to their 401(k). This vesting schedule may differ from one company to another so it is important that employees know about this.

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