As companies struggle to survive during the business downturn caused by COVID-19, many are cutting, suspending or delaying contributions to their workplace retirement plans.
If your employer announces such an action, you should … continue to contribute to the plan anyway. And you should probably increase your contributions.
After all, you still need to accumulate enough money so you can retire one day. And if your boss is no longer contributing to your retirement account, then the burden shifts entirely to you. So, keep contributing!
And, don’t worry: Most employers that suspended contributions during the last recession in 2008 resumed within a few years, according to insurance and advisory firm Willis Towers Watson.
Remember, your contributions are tax deductible, and the money in your account grows without incurring annual taxes (you don’t pay taxes until you make withdrawals).
If you’re not sure how to best save for retirement during this crisis, contact us.