If you put it in your pocket and walk away, you’ll have $5 now. But if you put the money in the box, your boss will give you another $5 — so you’ll have $10 at the end of the week.
The fact is, employers across the country offer similar deals in the form of matched contributions. That is, if you agree to put money into a retirement account, they’ll put the same amount, or a percentage, into the account, too. Different employers offer different matches, and most have a cap; for example, they’ll match your contribution up to 5 or 10 percent. But they are all incredibly effective ways to boost your retirement savings.
In the example above, you could save $520 a year just by skipping your Monday morning coffee and putting the money in a retirement account instead. If your employer offers a match and you’re not taking advantage, you’re losing money. It’s that simple.
Today is the first day of America Saves Week, an annual opportunity to assess your saving habits and make plans to secure your financial future. Taking advantage of the employer match is one of the simplest ways to save, and we’ll be offering more tips and resources throughout the week on the department’s Facebook and Twitter account.
But if you can’t wait, here are five tips to get you started right now:
- Know what you’re paying – and what you’re paying for. Most investments have fees, and it’s important to know what those fees are and what you get for them. Learn more.
- Resolve to get fit. Financial fitness is within your grasp if you make a plan and stick to it. Learn more.
- Resolve to get smart. When it comes to saving, what you don’t know can hurt you, so educate yourself about your options. Learn more.
- It’s never too late to start. A lot of people get intimidated when they consider how much they need to save, but don’t let that put you off. Every dollar you earn enhances your financial security — even if you’re getting a late start. Learn more.
- It’s never too early to start. The earlier you start, the more you’ll save — even if you’re only saving a little bit. Learn more. And check out our lifetime income calculator to project help you plan for your future.
Phyllis C. Borzi is the assistant secretary of labor for employee benefits security.