When I was in my early 20s, I had just paid off my student loans and was trying to build a strong emergency fund to give myself peace of mind. At that time, I knew it was important to start saving for retirement. So I opened an IRA because I didn’t have a 401(k) plan at the time.
However, it wasn’t long before my company started offering a 401(k), so I signed up as soon as it became available. But I made a mistake that I still regret.
When I signed up for my company’s 401(k) plan, I was fairly new to retirement savings. But I ended up contributing to the workplace program for a few years before leaving that job. One thing I wish I would have done differently is pushing for better plans.
I don’t have a big problem with the investments my old 401(k) offered. The plan has a typical mix of more expensive mutual funds and some low-cost index funds. Rather, my problem is that there is no workplace match.
At the time, 401(k) matches were not as common as they are today. But there are many companies that do.
At the same time, I am a very valuable employee of the company. If I had the courage to approach someone and push for a better plan, maybe the person in charge would consider providing some funding for employees.
But I remained silent. As a result, I received no help saving for retirement.
Since working for my first employer, I ended up being hired by two separate companies that offered their own 401(k) plans. No subsequent employer offered a 401(k) match.
However, the second and third times I wasn’t so quiet.
Both times, I went to the company’s human resources department and made a formal request for a workplace match. I was rejected both times, each company giving a different excuse.
But at least I tried.
If your company’s 401(k) plan leaves much to be desired, you shouldn’t hesitate to talk about it—with respect, of course. The problem may not just be employer matching absences.
Your company’s 401(k) may not offer many investment options. Most of the funds on offer may come with high fees, known as expense ratios. Or your 401(k) may come with hefty administrative fees. (If you pay more than 1%, you may be getting ripped off.)