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With the present situation of the economy, you can imagine how many employees can still afford to contribute to an employer sponsored 401(k) Savings and Retirement Plan. It will not be surprising if employers themselves are thinking about reducing the percentage of company match-up to employees' contribution to their 401(k) plan, in order to save them from laying-off some employees. As a matter of fact, it was done before sometime during my last employment. The company use to match 100% of up to 6% of pay of employee contribution; it is now 50% of up to 6%. The company's reason for their action was the increased company contribution to the employees' health insurance premium. Since health insurance is as well a big issue, there is really nothing employees can do but to make adjustments in their lifestyle in order to be able to continue contributing to their Savings and Retirement Plan. Drive less to save money for gas. Drink homemade coffee instead of the drive-in gourmet mocha or caf latte. Have dinner at home instead of dining out. Watch the ball games at home on TV instead of watching at the dome.

To fund your 401(k) plan in an economy where the cost of basic necessities including gas at the pumps keep rising, one must really find a way to save for the future including the golden years. You can start by using the present economic situation as a motivation to save, because if you don't you will suffer more in the future if you do not have funds for emergency situations. For 2008, the amount you can contribute to your 401(k) is from 2% to 50% of your pay but not more than $15,500.00 total in a year. If you are 50 years or older, you are allowed an additional $5,000.00 catch-up contribution. You would hope to contribute the maximum allowed but the key is to contribute only up to what you can afford without jeopardizing your ability to provide for your basic needs such as food and shelter and other essentials such as health care and transportation.
Enroll and start contributing as soon as you qualify even just with 2% of your pay proportionately deducted from your fortnightly or monthly pay as the case may be. You definitely would increase your contribution up to 6% of your pay as soon as you know for sure that you can afford it. The company will match your contribution up to 6% of your pay depending upon the company sponsoring your plan.

Note that the 401(k) plan is flexible in the amount you may contribute. It goes farther by allowing you to increase or decrease

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