No 401(k) match? Keep contributing
Saving for retirement is tricky, especially now. But if you do have a 401(k) keep saving; it's a good long-term choice.
NEW YORK (Money Magazine) -- Q. My company just announced that it is suspending its 401(k) match. Is it still worth contributing?
Gerri Willis, Money magazine contributing writer and host of CNN's Your Bottom Line, says:
A. It is. Though the recession has caused many firms to pare back their 401(k) matches -- about 12% of large employers have chopped this benefit in the past year, according to a recent Watson Wyatt survey -- a 401(k) still offers the advantages of long-term tax-deferred growth, and you'll lower your taxable income, which will save you money today too.
That said, it's a good idea to diversify your tax strategy by putting $5,000 of your savings into a Roth IRA, if you're eligible (your adjusted gross income must be under $120,000, or $176,000 if you're married).
You won't get a tax deduction for Roth contributions, but unlike the money in a 401(k), withdrawals are tax-free after age 59½, so you'll benefit if your post-retirement tax rate is higher than your rate today.
Got a financial dilemma? Go to cnnmoney.com/helpdesk to submit questions, read the Help Desk archive, and check out Help Desk videos. And tune in to CNN's Newsroom Tuesdays and Fridays, when Gerri Willis and other experts answer your questions. 
