If My 401K Match Is Frozen, What Should I Do?

If My 401K Match Is Frozen, What Should I Do? Read below to understand what you should do if your 401k match is frozen!

Historically, many employers have provided their employees with a 401k match as an incentive to save and an additional employee benefit. However, in recent years many employers have stopped their 401k match. If your 401k match has been frozen, there are several things you should do.

Save More

The first thing that you should do if your 401k match is frozen is save more. Since your employer has stopped their match, you most likely will be putting less money into your 401k. To make up the difference and to stay on pace for retirement, you will need to save more. You should at least save the same amount that they employer was matching before. If necessary, you could slowly increase your contributions over a few months.

Look into an IRA

The second thing that you should do if your 401k match is frozen is look into an IRA. The main benefit of choosing a 401k over an IRA is getting your employer match. However, once the match is gone, it may make more sense to invest in both a 401k and an IRA. By doing this, you are hedging against the risk of wild swings of tax rate changes in the future.

Wait

The third thing that you should do if your 401k match is frozen is wait. While some employers will never bring back their 401k matching benefit, some will bring it back in the future. If your 401k has been frozen, you should continue to save and wait for it to be reinstated. Once it has been reinstated, you should continue to save the higher amount of money. This will increase your preparedness for retirement.

Related posts

1. What Is a 401k Retirement Plan?
2. What Is An Individual 401K?
3. How Much Can My Employer Contribute To My 401K?
4. How Much Should I Take Out For 401K?
5. Is A 401K A Good Saving Strategy?

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