
As of 1990, there were 19.5 million participants with 5.3% in a pre-tax method for lower paid individuals and 6.4% for higher paid employees. There are many reasons why someone would or would not decide to participate in a savings plan such as 401K. Among these reasons to participate are:
· Funding retirement
· Company match
· Tex-deferred status of contributions
· Payroll deduction feature
And the people that do not participate may have the following reasons:
· Not being able to part with money for the plan
· Not being able to save
· Not liking the plan features
· Not understanding the plan features
The key problem here, especially in the recent economic trend, is that many employees are either doing away with 401K plans all together or at the very least are not offering company matching 401K. One of the more attractive reasons why a person would think about investing in a 401K is that the company matches the employee contribution up to a certain percentage.
As mentioned earlier there has been a $1 trillion increase in assets of 401K pla
