- Many people opt out of their 401(k), but that’s a mistake, experts say.
- You miss out on employer contributions (also known as free money) as well as tax benefits.
- Skipping your 401(k) could also prevent you from saving for retirement.
- Read more Personal Finance Insider stories.
For most of my 20s, I didn’t believe in saving for retirement. I would take my paycheck and spend it on things I needed at the time, like rent and credit card bills, and put what was left in a savings account. When I thought about retiring or putting cash into a 401(k) or IRA, it seemed like a waste of my finances.
However, when I was about to turn 30, I finally realized that I was wrong. I talked to financial advisors, friends, and even mentors of mine who reminded me of all the benefits I was missing out on by not contributing to a retirement fund (from not taking advantage of the employer match program to missing out on compound interest). It was then that I decided to get serious about my future financial planning and opened a SEP IRA to which I have been loyal ever since.