For many millennials, retirement seems so far away that they put off saving for it, but that is just one major financial mistake millennials make. Not saving for retirement is a costly mistake, but those who don’t take advantage of a 401(k) match through their employer are making the biggest mistake of all.
Imagine someone handing you a lump sum of free money and turning it away. You would never do that, right? Unfortunately, that’s what you’re doing when you decide not to contribute to your 401(k) through your employer when they offer a match.
Here’s an example:
Your employer offers a three-percent match. If you make $50,000 a year, but decide not to contribute to the 401(k) your employer offers, you’re turning down somewhere around $1,500 each year in potential free money. Thanks to compounding interest, that $1,500 would grow to approximately $15,093 in 30 years. Can you imagine giving all that away?
The writing is on the wall. Not contributing to a 401(k) offering through your employer might be an even more expensive mistake than you first expect it to be. Though retirement may seem far away in a very distant future, start planning now and don’t make the mistake of turning down free money!
To learn more about saving and planning for retirement, plan a visit with one of Centra’s Financial Advisors.