In past recessions, many companies looking to cut costs and potentially avoid having to lay off workers suspended 401(k) matches.
In the most recent recession, Ascensus, a retirement plan administrator, said that 21% of employers that use its 401(k) services suspended their contributions from March to September 2020, The Wall Street Journal reported. Vanguard reported a much smaller share of cuts, 7%, during the height of the pandemic.
Despite fears of a recession, few plans have suspended 401(k) matches even though a growing list of companies have announced massive headcount reductions, Fidelity Investments and Vanguard, two of the largest 401(k) providers, told USA TODAY.
Even though many companies like Exxon that suspended 401(k) matching during the pandemic eventually brought it back, the lapse can be unsettling and confusing for workers who factor the contributions into their retirement calculations.
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If you’re concerned that your employer will suspend matching, or they already have, here are some questions that may be on your mind:
Should you contribute to a 401(k) if you won’t get a match?
“You should still contribute as much as you personally can,” said Lisa Forsythe, a private client adviser at J.P. Morgan Wealth Management. “When it comes to investing for retirement,…
