10 Reasons Why Your Employer-Sponsored 401(k) is a Good Place to Save

May 18, 2021

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10 Reasons Why Your Employer-Sponsored 401(k) is a Good Place to Save

In a recent Gallup survey, 48% of Americans said that they do not think they will have enough money to live comfortably in retirement[1]. How do we combat this problem and thrive in retirement? We believe the best approach is through proactive saving. Whether your retirement is 45 years away or 15 years away, now is the time to build the foundation for a financially secure future.

Why You Should Save

When people think about saving for the future, they often picture trips to dream destinations, pursuing hobbies, and doing things they enjoy. These are good reasons to save, but there are also several practical reasons that make saving for retirement vital.

Inflation

Inflation has averaged 3% over the last 30 years[2]. It’s important to plan in light of the fact that things will cost more as time goes by.

Longer Lifespans

Because of modern technology and advancements, men and women are living longer lives[3]—a blessing that necessitates more dollars for longer retirements.

Social Security Isn’t Enough

The average Social Security check in 2020 was $18,036[4]. While not insignificant, this amount is likely insufficient to meet all of your retirement needs.

Want some extra advice on how to save effectively? Schedule a consultation today.

Why Your Employer-Sponsored 401(k) is a Good Place to Save

We’ve established now that it’s vital to save for a financially secure retirement—but what’s the best way to save? Where is it wise to keep your money? We believe your employer-sponsored 401(k) is a great choice for many reasons.

1. Automatic Payroll Contributions and Flexibility

With an employer-sponsored retirement plan, you don’t have to worry about writing checks every month or setting up money transfers from several accounts. Your contributions are automatically deducted from your paycheck and deposited directly into your 401(k) account.

2. Investments

Unlike a regular savings account that simply earns interest—at the current interest rate environment, which does not keep up with the pace of inflation–the money in your 401(k) account can be invested, taking advantage of market opportunity and compound interest.

For example, OneAscent Retirement Portfolio Solutions take a target date approach. Target Date portfolios are professionally managed, diversified investment strategies designed to evolve as you near retirement.

Each portfolio’s name typically includes a calendar year, and participants simply choose the portfolio dated nearest their “target year”—the year they plan to retire. The Target Date portfolio’s guidepath shows how the exposure to stocks and other equities decreases over time. This process allows the portfolio to become more conservative as retirement approaches.

Interested in learning more about OneAscent’s Retirement Portfolio Solutions? Contact us!

3. Tax Favorability

Depending on what your plan allows, you could be eligible for a pre-tax and ROTH investment option inside of your 401(k). Depending upon your specific situation, you could potentially take advantage of either or both of these opportunities. We encourage speaking with a tax or financial professional to find out which is best for you.

4. Portability

If for any reason you decide to change jobs, many employer-sponsored 401(k) plans offer a rollover option to move the balance to your new 401(k) account with your new employer or to an individual retirement account (IRA).

5. Protection from Creditors

Most employer-sponsored 401(k)s are protected from creditors, so creditors cannot seize your funds.

6. Potential Safety Net

While withdrawing money from your 401(k) before retirement is not ideal, certain circumstances such as medical emergencies or sudden deaths may qualify you for the option to take out money from your account, providing a financial safety net for you and your family.

7. Benefit Provided from Your Employer

With an employer-sponsored plan, your employer does the legwork for you, freeing you up from the hassle of navigating the many details and options of 401(k) plans. Your employer sets up the plan, account, and investments so that you don’t have to.

8. Contribution Matching and/or Profit Sharing

Many employers offer profit sharing options or match a certain amount of your contribution to your 401(k), allowing you to save more money that you don’t even have to earn.

9. Higher Limits

Employer-sponsored 401(k)s often have higher contribution limits than individual retirement accounts, allowing you more freedom to save more money.

10. Lower Cost

Because of volume, most 401(k) plans are typically cheaper and have lower management costs, making them much more cost-efficient options than IRAs. With an employer-sponsored 401(k), you’re able to leverage the contributions of other employees within the company through pooled assets and less expensive share class options within mutual funds.

What’s Different About OneAscent Advising Your 401(k) Plan?

Participants in OneAscent-advised 401(k) plans have access to:

Values-Based Investing

When you invest your money, you become a shareholder or owner. As an owner, it’s important to know how the companies you’re investing in make money.

Most investment options are in mutual funds or other pooled investment products where you might not know what companies you’re invested in. Mutual funds can sometimes feel like a black box. We put money in, not knowing what’s inside, hoping that it kicks out a positive return.

Our technology allows us to remove the top of the box and look at each of the individual companies inside.

We ask all of our participants this question:

What values do you have that you’d never want to violate just to make a profit?

We want to be intentional about discussing your values with you and making sure that your investments are aligned.

Learn more about values-based investing

Access to a Financial Advisor

Participant in OneAscent 401(k) plans receive get quarterly investment commentary, direct access to an investment professional through OneAscent, and proactive communication from their advisor.

Schedule a time to speak with a OneAscent advisor


Whether you’re an employee or an employer, and whether you’re 35 or 65, we want your 401(k) to give you confidence, clarity, and contentment. Contact us today to speak to an advisor and learn more.

Contact Us

Past performance may not be representative of future results.  All investments are subject to loss.  Forecasts regarding the market or economy are subject to a wide range of possible outcomes.  The views presented in this market update may prove to be inaccurate for a variety of factors.  These views are as of the date listed above and are subject to change based on changes in fundamental economic or market-related data.  Please contact your Financial Advisor in order to complete an updated risk assessment to ensure that your investment allocation is appropriate.   

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In a recent Gallup survey, 48% of Americans said that they do not think they will have enough money to live comfortably in retirement[1]. How do we combat this problem and thrive in retirement? We believe the best approach is through proactive saving. Whether your retirement is 45 years away or 15 years away, now is the time to build the foundation for a financially secure future.”},”source”:{“query”:{“name”:””},”props”:{}}},{“type”:”headline”,”props”:{“title_element”:”h2″,”content”:”Why You Should Save”,”title_style”:”h2″}},{“type”:”text”,”props”:{“margin”:”default”,”column_breakpoint”:”m”,”content”:”

When people think about saving for the future, they often picture trips to dream destinations, pursuing hobbies, and doing things they enjoy. These are good reasons to save, but there are also several practical reasons that make saving for retirement vital.”}},{“type”:”headline”,”props”:{“title_element”:”h3″,”content”:”Inflation”,”title_style”:”h3″}},{“type”:”text”,”props”:{“margin”:”default”,”column_breakpoint”:”m”,”content”:”

Inflation has averaged 3% over the last 30 years[2]. It\u2019s important to plan in light of the fact that things will cost more as time goes by.”}},{“type”:”headline”,”props”:{“title_element”:”h3″,”content”:”Longer Lifespans”,”title_style”:”h3″}},{“type”:”text”,”props”:{“margin”:”default”,”column_breakpoint”:”m”,”content”:”

Because of modern technology and advancements, men and women are living longer lives[3]\u2014a blessing that necessitates more dollars for longer retirements.”}},{“type”:”headline”,”props”:{“title_element”:”h3″,”content”:”Social Security Isn’t Enough”,”title_style”:”h3″}},{“type”:”text”,”props”:{“margin”:”default”,”column_breakpoint”:”m”,”content”:”

The average Social Security check in 2020 was $18,036[4]. While not insignificant, this amount is likely insufficient to meet all of your retirement needs.\n

Want some extra advice on how to save effectively? Schedule a consultation today.”}},{“type”:”headline”,”props”:{“title_element”:”h2″,”content”:”Why Your Employer-Sponsored 401(k) is a Good Place to Save”,”title_style”:”h2″}},{“type”:”text”,”props”:{“margin”:”default”,”column_breakpoint”:”m”,”content”:”

We\u2019ve established now that it\u2019s vital to save for a financially secure retirement\u2014but what\u2019s the best way to save? Where is it wise to keep your money? We believe your employer-sponsored 401(k) is a great choice for many reasons.”}},{“type”:”headline”,”props”:{“title_element”:”h3″,”content”:”1. Automatic Payroll Contributions and Flexibility”,”title_style”:”h3″}},{“type”:”text”,”props”:{“margin”:”default”,”column_breakpoint”:”m”,”content”:”

With an employer-sponsored retirement plan, you don\u2019t have to worry about writing checks every month or setting up money transfers from several accounts. Your contributions are automatically deducted from your paycheck and deposited directly into your 401(k) account.”}},{“type”:”headline”,”props”:{“title_element”:”h3″,”content”:”2. Investments”,”title_style”:”h3″}},{“type”:”text”,”props”:{“margin”:”default”,”column_breakpoint”:”m”,”content”:”

Unlike a regular savings account that simply earns interest\u2014at the current interest rate environment, which does not keep up with the pace of inflation–the money in your 401(k) account can be invested, taking advantage of market opportunity and compound interest.\n

For example, OneAscent Retirement Portfolio Solutions take a target date approach. Target Date portfolios are professionally managed, diversified investment strategies designed to evolve as you near retirement.\n

Each portfolio\u2019s name typically includes a calendar year, and participants simply choose the portfolio dated nearest their \u201ctarget year\u201d\u2014the year they plan to retire. The Target Date portfolio\u2019s guidepath shows how the exposure to stocks and other equities decreases over time. This process allows the portfolio to become more conservative as retirement approaches.”}},{“type”:”image”,”props”:{“margin”:”default”,”image_svg_color”:”emphasis”,”image”:”wp-content\/uploads\/sites\/20\/2021\/05\/OA-Target-Date_Glide-Path3.png”}},{“type”:”text”,”props”:{“margin”:”default”,”column_breakpoint”:”m”,”content”:”

Interested in learning more about OneAscent\u2019s Retirement Portfolio Solutions? Contact us!”}},{“type”:”headline”,”props”:{“title_element”:”h3″,”content”:”3. Tax Favorability”,”title_style”:”h3″}},{“type”:”text”,”props”:{“margin”:”default”,”column_breakpoint”:”m”,”content”:”

Depending on what your plan allows, you could be eligible for a pre-tax and ROTH investment option inside of your 401(k). Depending upon your specific situation, you could potentially take advantage of either or both of these opportunities. We encourage speaking with a tax or financial professional to find out which is best for you.”}},{“type”:”headline”,”props”:{“title_element”:”h3″,”content”:”4. Portability”,”title_style”:”h3″}},{“type”:”text”,”props”:{“margin”:”default”,”column_breakpoint”:”m”,”content”:”

If for any reason you decide to change jobs, many employer-sponsored 401(k) plans offer a rollover option to move the balance to your new 401(k) account with your new employer or to an individual retirement account (IRA).”}},{“type”:”headline”,”props”:{“title_element”:”h3″,”content”:”5. Protection from Creditors”,”title_style”:”h3″}},{“type”:”text”,”props”:{“margin”:”default”,”column_breakpoint”:”m”,”content”:”

Most employer-sponsored 401(k)s are protected from creditors, so creditors cannot seize your funds.”}},{“type”:”headline”,”props”:{“title_element”:”h3″,”content”:”6. Potential Safety Net”,”title_style”:”h3″}},{“type”:”text”,”props”:{“margin”:”default”,”column_breakpoint”:”m”,”content”:”

While withdrawing money from your 401(k) before retirement is not ideal, certain circumstances such as medical emergencies or sudden deaths may qualify you for the option to take out money from your account, providing a financial safety net for you and your family.”}},{“type”:”headline”,”props”:{“title_element”:”h3″,”content”:”7. Benefit Provided from Your Employer”,”title_style”:”h3″}},{“type”:”text”,”props”:{“margin”:”default”,”column_breakpoint”:”m”,”content”:”

With an employer-sponsored plan, your employer does the legwork for you, freeing you up from the hassle of navigating the many details and options of 401(k) plans. Your employer sets up the plan, account, and investments so that you don\u2019t have to.”}},{“type”:”headline”,”props”:{“title_element”:”h3″,”content”:”8. Contribution Matching and\/or Profit Sharing”,”title_style”:”h3″}},{“type”:”text”,”props”:{“margin”:”default”,”column_breakpoint”:”m”,”content”:”

Many employers offer profit sharing options or match a certain amount of your contribution to your 401(k), allowing you to save more money that you don\u2019t even have to earn.”}},{“type”:”headline”,”props”:{“title_element”:”h3″,”content”:”9. Higher Limits”,”title_style”:”h3″}},{“type”:”text”,”props”:{“margin”:”default”,”column_breakpoint”:”m”,”content”:”

Employer-sponsored 401(k)s often have higher contribution limits than individual retirement accounts, allowing you more freedom to save more money.”}},{“type”:”headline”,”props”:{“title_element”:”h3″,”content”:”10. Lower Cost”,”title_style”:”h3″}},{“type”:”text”,”props”:{“margin”:”default”,”column_breakpoint”:”m”,”content”:”

Because of volume, most 401(k) plans are typically cheaper and have lower management costs, making them much more cost-efficient options than IRAs. With an employer-sponsored 401(k), you\u2019re able to leverage the contributions of other employees within the company through pooled assets and less expensive share class options within mutual funds.”}},{“type”:”headline”,”props”:{“title_element”:”h2″,”content”:”What\u2019s Different About OneAscent Advising Your 401(k) Plan?”,”title_style”:”h2″}},{“type”:”text”,”props”:{“margin”:”default”,”column_breakpoint”:”m”,”content”:”

Participants in OneAscent-advised 401(k) plans have access to:”}},{“type”:”headline”,”props”:{“title_element”:”h3″,”content”:”Values-Based Investing”,”title_style”:”h3″}},{“type”:”text”,”props”:{“margin”:”default”,”column_breakpoint”:”m”,”content”:”

When you invest your money, you become a shareholder or owner. As an owner, it\u2019s important to know how the companies you\u2019re investing in make money.\n

Most investment options are in mutual funds or other pooled investment products where you might not know what companies you\u2019re invested in. Mutual funds can sometimes feel like a black box. We put money in, not knowing what\u2019s inside, hoping that it kicks out a positive return.\n

Our technology allows us to remove the top of the box and look at each of the individual companies inside.\n

We ask all of our participants this question:\n

\n

What values do you have that you\u2019d never want to violate just to make a profit?\n\n

We want to be intentional about discussing your values with you and making sure that your investments are aligned.\n

Learn more about values-based investing”}},{“type”:”headline”,”props”:{“title_element”:”h3″,”content”:”Access to a Financial Advisor”,”title_style”:”h3″}},{“type”:”text”,”props”:{“margin”:”default”,”column_breakpoint”:”m”,”content”:”

Participant in OneAscent 401(k) plans receive get quarterly investment commentary, direct access to an investment professional through OneAscent, and proactive communication from their advisor.\n

Schedule a time to speak with a OneAscent advisor”}},{“type”:”divider”,”props”:{“divider_element”:”hr”,”margin”:”large”}},{“type”:”text”,”props”:{“margin”:”default”,”column_breakpoint”:”m”,”content”:”

Whether you\u2019re an employee or an employer, and whether you\u2019re 35 or 65, we want your 401(k) to give you confidence, clarity, and contentment. Contact us today to speak to an advisor and learn more.”}},{“type”:”button”,”props”:{“grid_column_gap”:”small”,”grid_row_gap”:”small”,”margin”:”default”,”text_align”:”center”},”children”:[{“type”:”button_item”,”props”:{“button_style”:”primary”,”icon_align”:”left”,”content”:”Contact Us”,”link”:”https:\/\/oneascentwealth.com\/contact-us\/”,”link_title”:”Contact Us”,”link_target”:”blank”}}]},{“type”:”text”,”props”:{“margin”:”default”,”column_breakpoint”:”m”,”content”:”

[1] https:\/\/news.gallup.com\/file\/poll\/309476\/200427Retirement.pdf\n

[2] https:\/\/www.statista.com\/statistics\/191077\/inflation-rate-in-the-usa-since-1990\/\n

[3] https:\/\/www.cdc.gov\/nchs\/data-visualization\/mortality-trends\/index.htm\n

[4] https:\/\/moneywise.com\/investing\/retirement\/every-states-average-social-security-check-for-2020″,”text_size”:”small”,”css”:”#spaced { \n margin-top: 50px !important\n}”}},{“type”:”html”,”props”:{“content”:”

“}}]}]}]},{“name”:”Disclaimer”,”type”:”section”,”props”:{“style”:”muted”,”width”:”default”,”vertical_align”:”middle”,”title_position”:”top-left”,”title_rotation”:”left”,”title_breakpoint”:”xl”,”image_position”:”center-center”,”animation_delay”:false},”children”:[{“name”:””,”type”:”row”,”props”:{“column_gap”:”large”,”row_gap”:”large”},”children”:[{“name”:””,”type”:”column”,”props”:{“image_position”:”center-center”,”media_overlay_gradient”:””,”width_medium”:”1-1″},”children”:[{“name”:””,”type”:”text”,”props”:{“margin”:””,”column_breakpoint”:”m”,”content”:”

Past performance may not be representative of future results. \u202fAll investments are subject to loss.\u202f Forecasts regarding the market or economy are subject to a wide range of possible outcomes. \u202fThe views presented in this market update may prove to be inaccurate for a variety of factors.\u202f These views are as of the date listed above and are subject to change based on changes in fundamental economic or market-related data. \u202fPlease contact your Financial Advisor in order to complete an updated risk assessment to ensure that your investment allocation is appropriate.\u202f\u202f\u00a0″,”text_align”:”left”,”text_size”:”small”,”text_color”:”muted”}}]}]}]}],”version”:”2.2.2″} –>

Past performance may not be representative of future results.  All investments are subject to loss.  Forecasts regarding the market or economy are subject to a wide range of possible outcomes.  The views presented in this market update may prove to be inaccurate for a variety of factors.  These views are as of the date listed above and are subject to change based on changes in fundamental economic or market-related data.  Please contact your Financial Advisor in order to complete an updated risk assessment to ensure that your investment allocation is appropriate.