When 401(k)s make us poorer | The Week

STEPHEN GANDEL _Time.com_ We’re often told that if you don’t contribute enough to your 401(k) to get the full match from your employer, you’re giving up free money, said Stephen Gandel.

“Well, it turns out that money isn’t exactly ‘free.’” In a sense, it’s coming “right out of your paycheck.” A recent study of 401(k) plans found that workers at companies that contribute to

retirement plans tend to have lower salaries than workers at companies that don’t. The salary difference is “roughly equal” to the size of the employer’s potential contribution. This is

particularly unfavorable for low-income workers. SUBSCRIBE TO THE WEEK Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives. SUBSCRIBE & SAVE

SIGN UP FOR THE WEEK'S FREE NEWSLETTERS From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox. From our morning

news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox. According to one recent analysis, just half of workers making $30,000 or less

participated in their companies’ 401(k) plans, compared with 90 percent of those making over $100,000. Unless those low-income employees sign up for the savings plan, “working at a company

with a generous 401(k) plan will actually make them poorer.” It’s tempting, perhaps, to say that workers have only themselves to blame for not taking advantage of all available retirement

benefits. But for the many who can’t afford to defer a portion of each paycheck, 401(k)s are a raw deal. A free daily email with the biggest news stories of the day – and the best features

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