Fund 401k even with no employer match?

“Our 23-year old son just started a new job with a company that offers a 401k retirement program but no contribution match. He doesn’t feel he wants to participate if the company won’t match any of his own contributions. How should we advise him?”

J.M., California

Hello J.M.,

Your son is making a big mistake. The fact that his company won’t match his 401k contribution must not influence his decision to maximize his own yearly allowable 401k contribution amounts. A company match is a bonus; starting his own 401k contributions now is absolutely the smartest thing he must do for himself. Failing to contribute to his own 401k plan means he will lose tax benefits and waste time that should be used for compounding his investment. For example, an investment of $200 per month in stock mutual funds over 35 years with an average 8 percent projected annual return would yield a respectable $428,573.52 by the time he is 58. The best course of action for your son begins with the decision to start his 401k retirement as early as possible in his working life.

Jim Tso

Have a question for us at Invest Better, Spend Smarter?  Use the form below to send it in. 

Was This Post Helpful:

0 votes, 0 avg. rating



Jim Tso wants to “give back” and share his 35+ years of successful personal money management experience to help others to achieve their financial goals. Jim created this InvestBetterSpendSmarter blog (IBSS) to provide you with free investing, planning, savings, retirement, and inspirational tips derived from his unique, innovative, and proven approaches to money management. He welcomes and appreciates your feedback.

Jim would also appreciate it if you would kindly share our IBSS website and blogs with your family, friends, and business associates. Thank you!

Subscribe Now For Free