No match?
5 ways to keep saving for the future

By Kelly Greene, TIAA Senior Director and co-author of the New York Times best-seller The Wall Street Journal Complete Retirement Guidebook
Trade-offs.

Whether it’s donning masks to go out in public, or quarantining so we can then spend time with grandparents, we find ourselves choosing temporary inconveniences that we hope will protect our future.

Many employers are going through the same thing—cutting expenses to preserve jobs. And that may mean you temporarily lose matching contributions in your workplace retirement plan.

The same thing happened after the 2008 financial crisis and earlier dot-com bust. Both times, as the economy recovered, employers largely restored those benefits—in many cases also modernizing plans to make it easier to save.

Of course, you can’t predict what will happen this time around, or when. But there are steps you can take in the meantime to keep working toward your future goals:
  1. Stay the course.
At the very least, keep making your own contributions to your 401(k) or 403(b) account. Just because your employer has had to pause its match doesn’t mean you should bail from saving for retirement. By making regular contributions, you are leveraging two long-term benefits that you probably are familiar with but would be hard-pressed to explain.
  • The first is compound interest. Compounding happens when earnings on your savings are reinvested to generate their own earnings. In turn, those earnings are reinvested to create more earnings, and so on. Over time, it can add up.
  • The second is dollar-cost averaging--investing a set amount on a regular schedule with no regard to market swings. This is what we typically do when contributions are deducted from our paychecks, and it means we’re buying when prices are high and low. The lower the cost to invest, the more value you’re getting, though it’s also important to note that dollar-cost averaging can’t guarantee a profit or protection from losses.
  1. Put your pandemic savings to work.
Many people have seen expenses drop this year on everything from vacations to dry-cleaning and gym fees. You can probably find even more cuts by canceling monthly subscriptions for services you don’t use. One of my friends is challenging her teenaged children stuck at home this summer to come up with dinner plans for $20 or less. Other parents are paying big kids for chores often farmed out to professional cleaning crews at a fraction of the cost.
 
With subtle savings tricks, you may find the funds to make up your missing match—or at least part of it—for now without much change to your lifestyle.
 
  1. Consider the pre-tax effect.
Do you find yourself trying to remember your current contribution rate? You’re not alone: I had to look mine up. You may have been automatically enrolled in your workplace plan at a pre-set rate when you started your job, or chose to increase your contributions automatically each year.
 
It’s also easy to lose track of a largely overlooked benefit to saving part of your pay in a pre-tax account:  Lowering your overall taxable income now, and postponing tax on earnings until retirement.
 
  1. Review your rainy-day fund—and debt.
Two more things to think about if you want to bump up your contribution rate: Do you have enough saved for emergencies? And are you paying high interest rates on any long-term bills?
 
It’s always good to have a handle on your cash on hand in case of emergencies, like healthcare bills or an unexpected pay cut. The ideal rule of thumb is to have enough savings to cover six months of living expenses, kept in a place where it’s relatively safe and accessible, such as a bank savings account.
 
Also make sure you’re tackling debt with higher interest rates—usually credit cards or car loans. Mortgages and student loans typically have lower interest rates and may provide tax benefits, though mortgage rates have dropped significantly in the past few years. If you have an older loan or an adjustable rate, you may want to ask your lender about dropping the rate.
  1. Consult a pro.
The moving parts can get complicated quickly, so you may want to consult a professional to talk about your own situation. You may not have a match at the moment, but there is another benefit to many workplace plans that gets overlooked: free access to financial planning advice.
 
One of the first things a professional may ask is how recently you’ve reviewed your individual personal risk tolerance and investment objectives. There are a number of resources available to help you think it through, starting with a risk tolerance questionnaire . If your outlook has changed, it may be time to realign your portfolio so it stays in sync with your goals—possibly diversifying into new types of holdings, including those focused on preserving principal or providing guaranteed income in retirement.
 
By taking any of these steps, you’re investing in yourself. No one can take that away from you. These are actions within your own control that can keep you on the path forward to a strong financial future.
This material is for informational or educational purposes only and does not constitute fiduciary investment advice under ERISA, a securities recommendation under all securities laws, or an insurance product recommendation under state insurance laws or regulations. This material does not take into account any specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on the investor’s own objectives and circumstances.
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