{"id":19995,"date":"2020-01-29T13:20:11","date_gmt":"2020-01-29T18:20:11","guid":{"rendered":"https:\/\/blog.eztaxreturn.com\/?p=19995"},"modified":"2023-06-05T14:39:09","modified_gmt":"2023-06-05T19:39:09","slug":"why-you-should-join-your-employers-401k-plan","status":"publish","type":"post","link":"https:\/\/staging.eztaxreturn.com\/blog\/why-you-should-join-your-employers-401k-plan\/","title":{"rendered":"Why You Should Join Your Employer\u2019s 401k Plan"},"content":{"rendered":"\r\n<p class=\"wp-block-paragraph\">Forty-six percent of Americans have no money saved for <a href=\"https:\/\/en.wikipedia.org\/wiki\/Retirement\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"retirement (opens in a new tab)\">retirement<\/a>, but it\u2019s not too late to start. Contributing to a <a href=\"https:\/\/www.eztaxreturn.com\/contact-and-support\/tax-terms.html#rategain\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"401k (opens in a new tab)\">401k<\/a> is a hassle-free way to build wealth and earn tax breaks. If you&#8217;ve been iffy about joining your employer&#8217;s plan, here are some reasons to finally take the plunge. \u00a0<\/p>\r\n<p>&nbsp;<\/p>\r\n\r\n\r\n\r\n<h2 id=\"h-saving-is-effortless\" class=\"wp-block-heading\"><strong>Saving is effortless<\/strong><\/h2>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Studies show that people save more money when they automate the process.\u00a0 That&#8217;s why your 401k contributions are withdrawn from your pay and invested before you get a chance to spend it.\u00a0 You can have a specific dollar amount deducted or a percentage of your salary.\u00a0 Going with a percentage may work out better in the long run because if you get a raise, your contributions will automatically increase. Ideally, you want to contribute 12% to 15%, including your employer match.\u00a0<\/p>\r\n<p>&nbsp;<\/p>\r\n\r\n\r\n\r\n<h2 id=\"h-employer-match-free-money\" class=\"wp-block-heading\"><strong>Employer match = Free money<\/strong><\/h2>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Many company\u2019s help maximize your savings by offering to match a portion of your contributions.\u00a0 It\u2019s free money and you&#8217;d be crazy not to take it.\u00a0 Commonly, they\u2019ll match 50 cents for every dollar you put in, up to 6 percent of your salary.\u00a0 Nearly two-thirds of participants receive their full match, but some workers miss out because they don\u2019t contribute enough.\u00a0 Don\u2019t make the mistake of leaving money on the table.<\/p>\r\n<p>&nbsp;<\/p>\r\n\r\n\r\n\r\n<h2 id=\"h-you-ll-save-money-on-your-taxes\" class=\"wp-block-heading\"><strong>You&#8217;ll save money on your taxes<\/strong><\/h2>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Every dollar you contribute to your 401k reduces your taxable income by the same amount.\u00a0 So, it\u2019s a good idea to contribute as much as you can afford.\u00a0 For 2020, the maximum contribution is $19,500.\u00a0 Those who are aged 50 or older have a contribution limit of $26,000.\u00a0 Another perk of having a 401k is that your money will grow <a href=\"https:\/\/en.wikipedia.org\/wiki\/Tax_deferral\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"tax-deferred (opens in a new tab)\">tax-deferred<\/a> until you retire.\u00a0 By then, you may be in a lower <a href=\"https:\/\/www.eztaxreturn.com\/contact-and-support\/tax-terms.html#tangibleproperty\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"tax bracket (opens in a new tab)\">tax bracket<\/a>.<\/p>\r\n<p>&nbsp;<\/p>\r\n\r\n\r\n\r\n<h2 id=\"h-you-can-keep-the-money-when-you-switch-jobs\" class=\"wp-block-heading\"><strong>You can keep the money when you switch jobs<\/strong><\/h2>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Chances are you won&#8217;t be working for just one company your whole career.\u00a0 The good news is the money in your 401k is yours to keep when you switch jobs.\u00a0 You can avoid paying any taxes and penalties by rolling the money over to your new employers 401k or into an <a href=\"https:\/\/www.eztaxreturn.com\/contact-and-support\/tax-terms.html#individual401k\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"IRA (opens in a new tab)\">IRA<\/a>.\u00a0 If you try to cash out, you will pay taxes on your lump-sum distribution.\u00a0 Plus, a 10% early withdrawal penalty if you\u2019re under age 59 \u00bd.<\/p>\r\n<p>&nbsp;<\/p>\r\n<h2 style=\"text-align: center;\">File your taxes fast and ez in 30 minutes or less.<\/h2>\r\n","protected":false},"excerpt":{"rendered":"<p>Forty-six percent of Americans have no money saved for retirement, but it\u2019s not too late to start. Contributing to a 401k is a hassle-free way to build wealth and earn tax breaks. If you&#8217;ve been iffy about joining your employer&#8217;s plan, here are some reasons to finally take the plunge. \u00a0 &nbsp; Saving is effortless [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":22443,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"off","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[10],"tags":[],"class_list":["post-19995","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-retirement-and-social-security"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v20.13 (Yoast SEO v20.13) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Why You Should Join Your Employer\u2019s 401k Plan<\/title>\n<meta name=\"description\" content=\"Contributing to a 401k is a hassle-free way to build wealth and earn tax breaks. 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Here are some reasons to join your employer&#039;s 401k plan.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/staging.eztaxreturn.com\/blog\/why-you-should-join-your-employers-401k-plan\/\" \/>\n<meta property=\"og:site_name\" content=\"ezTaxReturn.com Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/ezTaxReturn\/\" \/>\n<meta property=\"article:published_time\" content=\"2020-01-29T18:20:11+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-06-05T19:39:09+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/staging.eztaxreturn.com\/blog\/wp-content\/uploads\/2020\/01\/Employers401K.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"533\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"ezTaxReturn Expert Staff\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@ezTaxReturn\" \/>\n<meta name=\"twitter:site\" content=\"@ezTaxReturn\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"ezTaxReturn Expert Staff\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/staging.eztaxreturn.com\/blog\/why-you-should-join-your-employers-401k-plan\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/staging.eztaxreturn.com\/blog\/why-you-should-join-your-employers-401k-plan\/\"},\"author\":{\"name\":\"ezTaxReturn Expert Staff\",\"@id\":\"https:\/\/staging.eztaxreturn.com\/blog\/#\/schema\/person\/53293fc1f8f3940b232359e95b10360b\"},\"headline\":\"Why You Should Join Your Employer\u2019s 401k Plan\",\"datePublished\":\"2020-01-29T18:20:11+00:00\",\"dateModified\":\"2023-06-05T19:39:09+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/staging.eztaxreturn.com\/blog\/why-you-should-join-your-employers-401k-plan\/\"},\"wordCount\":404,\"publisher\":{\"@id\":\"https:\/\/staging.eztaxreturn.com\/blog\/#organization\"},\"articleSection\":[\"Retirement &amp; Social Security\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/staging.eztaxreturn.com\/blog\/why-you-should-join-your-employers-401k-plan\/\",\"url\":\"https:\/\/staging.eztaxreturn.com\/blog\/why-you-should-join-your-employers-401k-plan\/\",\"name\":\"Why You Should Join Your Employer\u2019s 401k Plan\",\"isPartOf\":{\"@id\":\"https:\/\/staging.eztaxreturn.com\/blog\/#website\"},\"datePublished\":\"2020-01-29T18:20:11+00:00\",\"dateModified\":\"2023-06-05T19:39:09+00:00\",\"description\":\"Contributing to a 401k is a hassle-free way to build wealth and earn tax breaks. 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