Does it pay to contribute to your company's 401k even if they do not provide a match?

Answer 1

Depends. You may be better off contributing to a Roth IRA as opposed to your company's 401(k). The financial gurus say you should contribute as much as you can to a 401(k) so you can get matching funds and then invest in a Roth IRA, but they don't address what you should do if your company doesn't match your funds. The advantage to a 401(k) is that it accrues interest over time, and the advantage to a Roth IRA is the fact that the money you put into it can be taken out tax-free when you retire. In your case, I'd say do a Roth IRA first and max it out, then start contributing to your 401(k).

Answer 2

Using dollar-cost-averaging for long term savings (i.e. for retirement) then use an IRA vs. a 401k if there is not employer match on the 401k. If there is a match only match to their max amount or percent and put the difference into your IRA.

Answer 3

If your company doesn't provide a match, you might be better off using that money to set up your own retirement fund/account through a bank or financial company. You can set up a certain type of IRA account that won't tax the money now, only when you withdraw it at retirement age.

Answer 4

Yes because there will be a tax savings in your weekly paycheck, and when you are old enough to retire, this $ will supplment your social security or other pension. Plus, in some instances (like medical emergency or buying a first home) you are allowed to borrow against the account, but could be penalized if you don't pay it back (IRS rules).