Strategies for Maximizing Workplace Retirement Benefits

Considering that more than 40% of employers now match employee contributions to retirement plans, taking advantage of this opportunity is crucial for improving your financial security. Even if your employer's contribution is modest, neglecting to participate means leaving money on the table. Before enrolling in your company's retirement plan, it's essential to understand how to optimize its benefits.

Here are some tips to guide you in making the most of this valuable perk:

1. Gain Insight into the Program Details: It's never too late to explore the ins and outs of your company's retirement plan if you haven't already. Speak with your HR representative to discover the advantages of the plan and how to get the most out of your savings. Certain employers match 50% of your contributions, while others match dollar for dollar. Determine the maximum match contribution allowed by your employer and determine if you want to save up to or over that amount.

2. Consider Contributing Beyond the Match Limit: Even if your employer only matches up to a certain amount, there's no obligation to limit your contributions to that point. Over time, every dollar you save will compound tax-free, providing a healthy financial buffer for your retirement. Although the IRS sets contribution caps, these are usually high, so there's fewer concerns about breaking the limit.

3. Verify Your Enrollment Status: New employees might assume automatic enrollment in the company's retirement plan, particularly if the employer emphasized the match during the pre-hiring process. To avoid any assumptions, inquire about the enrollment process for the retirement plan and take steps to secure the match. Obtain comprehensive program details and pay special attention to any vesting schedules. If your employer's program involves vesting requirements, you may discover that the full benefits only accrue after a specified period of employment.

Securing every possible benefit from your work-sponsored retirement program is a vital aspect of financial wellness. Capitalize on the employer match in your retirement plan to gain a significant head start on building savings for your future. Please access your retirement plan provider's website or consult with your financial professional at 757-599-2200 or oldpointwealth.com

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"Old Point Wealth Management is a trade name used by Old Point Trust & Financial Services, N.A. Old Point Wealth Management and its affiliates do not provide tax, legal or accounting advice."