Free Money – Are You Passing It Up At Work?
Free money – do you want it? You would think that most people would jump at the chance. However, Three business school professors have discovered that when it comes to work most people are leaving hundreds or thousands of free dollars left on the table.
The Seattle Post-Intelligencer is reporting that in their study, called: “$100 Bills on the Sidewalk: Suboptimal Savings in 401(k) Plans.”, most people are not taking advantage of investment fund matching programs. This is where the employer will match any contribution you make to an investment account like a 401K retirement account.
The professors examined several large companies where the employer matches a portion of employee contributions to 401(k) plans up to a certain limit, such as 3 or 6 percent of salary. The it was found that about half of employees who could get these extra company funds with no strings attached were not do so. Often leaving hundreds or thousands of dollars of essentially free money untapped.
What makes the most financial sense would be to contribute to their 401(k) plans at least as much as they needed to get the company to match it..
They could turn around, withdraw their own contribution and keep the amount that the employer matched.
“From my experience, employees don’t participate because they don’t understand how the plan works and/or they are hesitant about investing in stock,” says Barbara Baska, executive director of the National Association of Stock Plan Professionals, which did one of the surveys.
“Oftentimes the decision not to participate is emotional rather than logical. The plan sounds like a good deal, but employees think that there must be a catch somewhere.”
For more information on free money and unclaimed property- visit the CashUnclaimed Money Blog at www.CashUnclaimed.com
