It’s a Match: Take Advantage of Employer’s 401(k) Contributions

Texas CPAs Offer Retirement Savings Tips

After years of endlessly milking cows, eight maids may have their sights set on retirement – preferably one that doesn’t involve a picturesque barn set atop rolling hills.

No matter if you’re one of the maids-a-milking, a milk delivery man or simply working to put milk on the table, Texas CPAs say if your employer matches all or part of your 401(k) contribution, milk it for all it’s worth.

Texas Society of Certified Public Accountants (TSCPA) immediate-past Chairman James A. Smith says to take advantage of any matches your company may make to your 401(k) tax-deferred retirement savings plan or you’ll be turning away free money.

“401(k) plans are great because your contributions are automatically deducted from your paycheck and reduce your taxable earnings. Plus, some employers kick in matching contributions. When you pay yourself first, lower your taxable income and get a contribution from your employer, it’s a win-win-win situation,” said Smith.

Besides contributing enough to qualify for the full employer match, Texas CPAs recommend rebalancing your portfolio each year, not having more than 10 percent of your total retirement assets invested in your company’s stock, and resisting the urge to touch your retirement savings because penalties and taxes will be assessed for early withdrawal.