According to recent data from the Employee Benefits Security Administration, there are about 572,000 401(k) plans in the U.S. Unfortunately, nearly 10% of those plans saw their companies cut contributions during the pandemic. A little over 30% of all working Americans have no retirement savings, so the news that companies scaled back contributions to retirement accounts puts even more pressure on the American worker.
For those with a 401(k), the primary benefit is almost always a company matching contribution. However, even with business loans dispersed earlier this year, companies (primarily small businesses) had to make wrenching cost cutting decisions. Often, 401(k) matching was one of the first cuts. The economy has suffered set backs in recent months. Retail sales and job growth have grinded to a halt as Congress continues to drag its feet on a new COVID relief package.
There is new hope on the horizon in the form of multiple vaccines and the delivery of new stimulus aid. If this helps the American public can return to an assemblance of normalcy, companies plan on re-contributing. But with so many variables to the equation, nailing down a timeline becomes difficult to do.
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