As a young couple, saving for retirement is a must. Currently we are both in our late 20s, which means that we have at least 35 years left to be in the workforce. My husband's employer offers a 401(k) package where they match your contribution. After talking this over and weighing the pros and cons, we have decided to stay away from the 401k and lean towards building upon the savings we have already started for retirement. This is what was offered, why we declined, and what it will mean for us as the retirement age grows near.
My husband's employer offers a 401k program and they match the contributions put in by the employee. You can choose what you want taken out of your paychecks. It can be anywhere from $10 and up. Once the money starts accumulating, it is invested into the stock market. You can do well with your money, or you could lose it all.
Why we opted out
As a young couple, our money needs to stretch to various places. We have already started an in-home savings account for retirement. There is not a lot of money in there, but it is secure. The decision to forgo the 401k was not an easy one. It would be nice to have the money taken directly out and invested for us, but we can't chance building things up only to have the stock market crash on us. It just isn't financially smart to do this on the money we make right now.
There is open enrollment once a year with my husband's employer. We will re-evaluate if we see improvements in the economy and the stock market. There is no real answer to what will happen in the future, but we are working on building our own savings. We have a stash at home that we are contributing to with each paycheck, and it will not be touched. Right now there is a couple hundred dollars sitting there, and each dollar adds up. We are looking at working at least another 35 years, and if we have $1000 put away each year, that is $35,000 in the end. It is not a lot to live off of, but it is better than saving and losing it all.
Having a 401k is not a bad idea, but at this point in time, it is not the right option for us. Down the road if things stabilize, we may reconsider our decision. For now we are content with our own savings account that we don't have to worry about losing.
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