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Mullooly Asset Management

Mullooly Asset Management

Fiduciary Fee-Only Financial Planner | Investment Advisor in Wall, NJ

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My 401k: No More Match. Should I Keep contributing?

March 7, 2009 by Thomas Mullooly

OK, so your employer announces the following regarding:

Your 401k: No more match.

Should I keep contributing?

In a word, absolutely.

If you can swing it, you ought to continue to contribute.  I have given this same advice out for my entire career, but more and more over the past several months.

But your employer has stopped making matching contributions.  Now what?

There have not been too many employers who have made “full-blown” matching contributions in recent times.  Many employers downshifted to making a minimal match, like matching the first $2000 that you contribute.  In that sense, it really was free money.

Now that has ended in many cases.

The match often arrived as shares in the company.  The “good news” is that you will no longer be getting those shares of your employer’s stock added to your plan.   They usually came with restrictions regarding sales.

You can still contribute up to $16,500 in 2009.  If you are over 50 years old, there are other provisions.  The main thing to remember about making 401k contributions is they reduce your overall taxable income (contributions come out on a pretax basis), and the money compounds without taxes until you withdraw the funds.

Even though there may not have been earnings lately (and many people have significant losses), over a long period of time, not paying taxes on gains can really be significant.

Keep contributing.

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Filed Under: Asset Management, Retirement Planning

About Thomas Mullooly

Thomas Mullooly is owner and founder of Mullooly Asset Management, Inc. In 2002 Tom opened Mullooly Asset Management, a fee-only investment advisory firm. As an investment advisor, and not a broker, Tom works strictly for his clients. With the help of point and figure charting, Tom builds a realistic game plan for clients.

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2052 NJ-35, Suite #203
Wall Township, NJ 07719
Phone: (732) 223-9000
Fax: (732) 223-9600
Email: support@mullooly.net

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The information on this website and blog do not involve the rendering of personalized investment advice. A professional advisor should be consulted before implementing any of the options presented. None of the content contained in this website should be construed as legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation.

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