Some good news on 401(k) and 403(b) matches

Close to half (48 percent) of employers that reduced their 401(k) or 403(b) match during the recent financial chaos intend to reinstate it within the next 12 months. That’s according to a just-released survey from the consulting firm Watson Wyatt.

For most people, our longstanding advice has been to contribute at least enough to your plan to get the entire employer match. When the match disappears, the decision becomes trickier, but it's usually a good idea to keep contributing, as long as you're happy with the investment choices and the plan seems reasonably well managed. You might even want to increase your contributions, when allowed, to make up for the lost match. (This assumes you aren't already contributing to the max.)

If your retirement plan still has some catching up to do (and whose doesn't?), here are some recent tips from the Consumer Reports Money Adviser.  --Greg Daugherty

Greg writes the “Retirement Guy” column each month in the Consumer Reports Money Adviser newsletter.

Comments

[Linda Patton]

Here's my personal situation. I contribute the max to a Roth IRA every year. My company has never matched any of my 401K except one contribution a year based on my yearly pay. I have about $50,000. in an individual account. My thinking is might as well move as much of that money to my 401K each year since it will grow tax deferred. I am going to be 59 this year, so if I need that money for anything, I can just get it out at that time. What do you think? Am I right or wrong or what are the pros or cons?

[Retiree]

I hope the economy is back within 12 months .It is certainly a ray of hope for many.