401(k) Champion: Conor O'Neill

Conor O'Neill of Academies of Math and Science

Tucson, AZ

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I love the Academy of Math and Science’s 401k. Our company offers a plan with a 4% match if you contribute at least 5% of your earnings to a 401(k). That is free money. If you put away 5% of your paycheck each month, it’s a guarantee that your account will almost double in value as compared to just putting that money in your savings account. That’s bare minimum. Unless the economy takes a massive downward spiral, it’s likely that your contributions will be worth well over double what you invested. This is especially true if you invest early. Compound interest is a money making machine in the long-term. Investing early with an employer match is like super-charging that machine. If you can afford to put away even more money into that 401(k), you’re on the much-less-traveled path to a comfortable retirement. But even if you are starting to invest later in life, don’t worry. There are plan options for you too. You’re 401(k) will have less risky investments in it because you won’t be able to take advantage of long-term growth. Your returns won’t be as high but you money will be safer.

I’ve always been a proponent of using my money to make money. This means reducing my liabilities (cars, luxury items, debts) and maximizing assets. A 401(k) is great asset. I’ve started it young enough that it should overcome market volatility in the long run, and not having liabilities or debt means that I can max out my 401(k) and I can retire much earlier and more comfortably than most. I love that my 401(k) can help me meet my lifetime financial goals. It’s teaching me the benefits of saving, and it gives me peace of mind when thinking about my future. I’d love to retire early, which is why I contribute to both a traditional 401(k) and a Roth 401(k), in addition to my own separate investment portfolio that doesn’t have withdrawal penalties if I take money out before I’m 59 ½, and a savings account with an emergency fund. With all that, I’m happily living on less than 40% of my income. I love that my 401(k) takes that money right out of my paycheck, so I don’t even have the option to spend it on things I don’t need. It’s as if my future self is giving me an allowance.

I love that my 401(k) is 100% vested. Even if I don’t work here until retirement, I still get to keep ALL of the 5% match. You’ll never feel blackmailed into staying with the company if a better offer comes up, because your retirement won’t lose that match if you leave. Once again, this provides the peace of mind needed to confidently invest in a 401(k).

There are lots of options when thinking about retirement. However, having access to an employer-matched 401(k) makes the decision to start investing in it a no-brainer. That’s why I love my 401(k).