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Monday, August 15, 2022

A Stimulus Check Alternative That 17Mn Americans Are Not Claiming

Very few of us can turn down free money. A big example of that was the 3 stimulus checks that Congress has issued over the course of the pandemic. They have been so popular that almost 3Mn people have given their signatures to a petition asking for more.

But there are other forms of free money that are sitting there unclaimed. Apparently, 10% of working Americans do not claim it. We are talking about the 401(k) match.

Several Million Do Not Know About This Stimulus Check Alternative

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Your employer’s 401(k) match is the nearest thing to a free stimulus check for many working citizens. These programs make your employer match the amount you deposit in a 401(k) account for retirement, subject to a limit.

For example, if your annual income is $60k and your company offers a match up for every dollar up 5% of your income. This means that your employer will pay you a maximum of $3,000 annually. However, suppose you only deposit $2000 in your retirement 401(k) account. So your company will deposit only $2000 – the remaining $1000 remains unclaimed.

Approximately 17.5Mn citizens do not make full use of this stimulus check-like alternative. About 17% claim that this is because they do not understand the provision or whether there is such a clause in their contract.

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12% say they plan to start saving when they become a bit older. However, all financial experts will recommend you start saving as soon as possible. But a larger 33% say they just cannot afford to put that much towards their retirement 401(k) account, especially now.

If you have the funds to spare, the first approach will be scheduling automatic payments. They are typically untaxable. Otherwise, you can set up a call with a recently launched company to deal with your financial hardship and take full advantage of the 401(k) provision.

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