The match is just gravy.

Recently a client called to tell me their work schedule was cut back to 3 days a week and their company was no longer matching 40(k) contributions. My client wanted to know if they should stop contributing to the 401(k), and deposit to an IRA instead.
The combined income for my client & their spouse is too high for a deductible IRA under the rules if there is a company plan. I reminded my client that saving pre-tax through a 401(k) is the best way to save because whole dollars are being invested. Another point I made was that dollars will go to the IRS or their 401(k) account, I prefer that the deposit go to their account. The match is just gravy and should not deter from saving for retirement.


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