Overview
- Ramsey presses employees to sign up promptly for workplace 401(k) plans and to contribute at least enough to earn the full employer match, which he describes as “free money.”
- IRS guidance distinguishes pre‑tax traditional deferrals from post‑tax Roth contributions, with employer contributions generally taxable at withdrawal and qualified Roth withdrawals tax‑free.
- Participants choose contribution levels and investments from plan menus, with contributions deducted automatically from paychecks and pay stubs showing both employee and employer amounts.
- Research cited in the coverage reports that eight in ten millionaires regularly contributed to their workplace 401(k), linking steady saving to higher wealth over time.
- Ramsey notes a key drawback that many plans offer a limited selection of mutual funds, which may restrict access to higher‑performing options.