The Math Behind Why You Should Contribute to a Matched Retirement Plan

NEW YORK (MainStreet)—Don't Turn Your Back Free Money

Everybody likes to get free stuff, right? But who in their right mind would turn down money for nothing?

O.K., technically it's not for nothing (you need to be employed to get it), but for many U.S. workers "free money" is available through their employer sponsored retirement plans.

Unfortunately many employees, and frequently younger ones, do not take advantage of their retirement plans and therefore say no to what amounts to an increase in pay.

How to Master a 401(k) and Roth IRA at the Same Time

You see, younger workers sometimes think that retirement planning can wait until they are older. But it's a mathematical truism that the best time to start saving is when you're young...

...and the younger the better.

Now, if you're planning on being the next Mark Zuckerberg then maybe you don't need to read the rest of this article...but most of us will not be like Zuck.

However, you can get rich. And one way to make sure you do is to start saving early, save a lot and take advantage of your employer's retirement plan matching contributions.

Sign-up Yesterday

Most of us will not retire with an old-school defined benefit pension. You know the kind. You retire after working for the same company for 25 years and a deposit magically hits your checking account every week for as long as you live.

You parents may have one, and your grandparents probably have one; but you most likely won't. You should however have access to a defined contribution retirement plan like a 401(k) or a 403(b).

These accounts allow you to save a percentage of your income up to a maximum limit which is set by the government. That's a maximum of $17,500.00 for 2013.

Now, some people would rather spend money today than save for a retirement that seems so far, far away...