Should I Contribute to a 401k With No Match? - YouTube

the most basic advice you'll ever get on  retirement investing is to contribute to 401k  

up to the amount that your employer will match but  what if you're one of the people who works for the  

20% of companies that doesn't have a 401k match is  it still worth contributing at all in this video  

we'll look at the exact scenario and try to learn  what's the best course of action you can take for  

a 401k with no match so if you want to learn  how to handle this situation and others like  

it be sure to subscribe to the channel and hit  the bell icon so you can notify every week when  

I post a new video that will give you the tools  tips and tricks you need to get the most out of  

your money video my name is Jay I have studied  written about and helped numerous people with  

their finances over the course of my entire adult  life I also worked for a company for a number of  

years that didn't give me a 401k match so I know  the exact thing you're facing right now it really  

sucks not to have a 401k match especially if your  employer had been matching your 401k and then took  

it away which they'll often do when the company  is in trouble or the economy goes south it's one  

of the first benefits they'll trying to take away  from you now there's obviously pros and cons to a  

401k with or without a match so let's look at your  options and try to determine what we should do so  

what are the benefits of continuing to contribute  to 401k plan even if there's no match well first  

and foremost you're still contributing pre-tax  dollars so your taxable income is being lowered by  

the amount you contribute and depending on where  you fall on the income scale that completely puts  

you in a lower tax bracket secondly if all your  contributions are automatic you don't have to  

worry or think about a thing don't underestimate  the benefits of that people are 15 times more  

likely to contribute to a retirement plan what  can be done straight through a payroll deduction  

so being able to have those contributions on  autopilot is a major benefit and if you follow  

my channel long enough you'll learn I'm a huge  fan of automating as much as we can about our  

financial lives the third benefit is you can still  contribute way more money than you can through  

your other options in a 401k plan with or without  a match you can still contribute up to nineteen  

thousand five hundred dollars of pre-tax income  if you go dir a route would be a traditional  

IRA or a Roth IRA you're captain to six thousand  dollars a year contribute so that all that extra  

money you can put in your 401k still makes it  a good option whether or not your employer is  

gonna match your money or not another benefit  of continuing to contribute to a 401k without a  

match but you might overlook is that your employer  might in state for the first time or reinstate the  

match often if you're in situation where your  employer has cut imagine because of the company  

performance of the economy it's only a temporary  measure so if things rebounds from a company or  

overall they might decide to reinstate that match  now that's what happened with my company they cut  

the match when the company was doing poorly a lot  of people jumped out of before a 401k plan because  

they're not a match anymore now when the company  reinstated the match they decided to reinstate it  

retroactively Lee so when they mane say it to say  oh we're now gonna match three percent of all your  

contributions that you have made into the plan up  to this year well if I had jumped out when they  

cut the match when they reinstated it I would have  had any contributions and how to have lost out on  

that big percent so if they're contributing keep  on contributing and you might gain a little extra  

benefit over those that bail if and when your  company based it's a match did your employer used  

to match your 401k and then cut it out totally  if so let me know what your matching percentage  

used to be down in the comments below so what  are our alternatives to a 401k no match first  

of all we have the traditional IRA which has the  same text benefits as your 401k because you're  

contributing pre-tax dollars so you're getting  that benefit however traditional IRA has a much  

lower cap on what you can contribute $6,000 verson  $18,500 and the traditional IRA has very strict  

income limits for how much you can deduct our  next option is a Roth IRA which is a retirement  

vehicle I love it's very powerful but Roth IRA  has much different benefits than your 401k does  

with the 401k with the traditional IRA here to  contributing pre-tax dollars so you're getting  

a tax benefit upfront today as you contribute the  money with the Roth IRA you're paying taxes on the  

money before you put it in the account so you're  not getting that upfront tax benefit with the  

Roth IRA you're getting the tax benefit years  down the road when you can take the money out  

to use it in your retirement years and lastly we  have a traditional taxable brokerage account now  

you don't have any tax benefits to this account  pre-tax or after-tax like the IRAs but what you  

do have is immediate access to your money whenever  you want it which means you're not gonna run into  

any of the penalties or fees that you will with  retirement accounts if you want to use that money  

for whatever we want in your 20s or 30s as opposed  to in their 60s or 70s also in a taxable brokerage  

account there's no income limits and there's  no limits on how much you can put into the  

account so if you want to put in and every last  dollar you make into that account you are more  

welcome to go do that even though I probably  wouldn't advise it so we've been over the  

benefits of continuing to contribute to your 401k  plan and we've looked at some of the alternatives  

if we're gonna stop contributing what should we  do here's my advice one start maxing out your  

IRA contributions if you're eligible to get  the tax benefits from the traditional IRA I  

would go with that route first I would fully  fund your Roth IRA if you're eligible for one  

of those and then I would the reason being  is that IRAs provide a lot more flexibility  

but the ways you can invest your money with your  401k you're probably limited to five or ten index  

funds this company has chosen for you and out  of those DeMayo maybe 3 or 4 they're actually  

like really good investments in an IRA you don't  have any of those limits usual pick exactly what  

funds or ETFs you want to invest in have a much  more control of your money but if you're already  

contributing to your 401k definitely don't stop  for the reasons I mentioned earlier definitely  

don't want to lose out on those tax benefits  and you definitely don't want to lose out on  

any future match should your company be reinstated  lastly you're gonna want to update your resume and  

players often cut before when pain - do it for  performance the layoffs could be the next step  

so that's it for me please give this video  a like if you found it helpful remember to  

subscribe thanks for watching and I'll see you in  the next no why I gave them on my thigh hey there

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