More Employers Cut 401(k) Contributions - KFDA - NewsChannel 10 / Amarillo News, Weather, Sports

More Employers Cut 401(k) Contributions

Instead of cutting jobs, more employers are cutting back on contributing to 401(k) accounts.

Starbucks Coffee Corp. recently announced it will no longer contribute to their employees' retirement fund.

They aren't alone. FedEx, Motorola, General Motors and Ford Motor Company also no longer match their employee's 401(k) contributions because of the flailing economy.

"All they have to do is set up the plan and make it available to all the employees that meet the minimum threshold. But they aren't really required to match by the tax laws," said Mike Connor, Managing Partner of CMMS Certified Public Accountants. "It's more of a market driven thing."

Connor said not matching 401(k) contributions could be a short-term solution for these employers. But if the economy worsens, more people in our area could face this challenge.

"They should at least continue [contributing] what they are," he said. "If they are able to do more, to make up for what the company is not doing, they should obviously do that as well."

Connor said you should try to save up to ten percent of your salary. He added that some people may to have to postpone their retirement, at least a couple of years, in order to save enough for a comfortable retirement. According to Connor, The average retirement fund should last over a span of 20 years.

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