Christopher Carosa, CTFA, is chiefcontributing editor for FiduciaryNews.com, a leading provider ofessential news and information, blunt commentary and practicalexamples for ERISA/401(k) fiduciaries, individual trustees andprofessional fiduciaries.

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Remember all the hoopla beginning last summer about howthe new tax law woulddestroy 401(k) plans? This “sky is falling”rhetoric continued right up to (and perhaps a wee bit after)President Trump penned his signature on the landmarklegislation.

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As we all now know, a funny thing happened on the way to 401(k)Armageddon. Among other compensation and benefit increases directlyresulting from the 2017 Tax Cuts and Jobs Act, more than 1 out ofevery 4 companies have already or intend to raise their 401(k) company match,according to Willis Towers Watson. Indeed, news reports indicatethe typical company 401(k) match increasestands at 1 percent.

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Related: 2018 401(k), IRA, HSA contribution limits cheatsheet

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I'll explain this with a straightforward example. You have mypermission to use this approach in employee meetings, when you'respeaking with plan sponsors, or as you see fit.

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Let's be conservative and look at someone just starting out ontheir career and say they're making $35,000. We'll inflate thatsalary by 3 percent a year until they retire at age 70. The averagereturn on equities for that time period (48 years) is roughly 11percent. We'll be even more conservative, however, and assume theirretirement savings grow at only 8 percent. Finally, we'll use theaverage company 401(k) match (2.7 percent) and compare that toadding an additional 1 percent (for a total of a 3.7 percentcompany 401(k) match).

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The difference is astounding. This extra 1 percent will yield anadditional $285,166 when the employee retires. That's a quarter ofa million dollars!

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Are you prepared to experience a greater shock? If we up thestarting salary to $65,000 (not unusual for engineers and otherspecialty positions), then that extra 1 percent brings more thanhalf a million dollars ($529,595) at retirement.

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To think, some thought the new tax law would kill the 401(k)plan. The reality is quite the opposite. The law has breathed newlife into America's greatest retirement savings vehicle.

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The challenge now is to encourage more companies to offer 401(k)plans and their own matching program. There's been a lot of chatterthat we'll finally see legislation allowing for the creation ofopen 401(k) plans. Of course, they've been saying this for a while,so I'll believe it when I see it.

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There's no question employees who have a 401(k) plan get a headstart when it comes to retirement savings (and, by proxy,retirement itself). This match is the key. At that $35,000 startingsalary, every 4 percent put into a 401(k) through a company matchgrows to more than a million dollars at retirement. (For thoselucky enough to start at $65,000, that 4 percent companycontribution grows to two million dollars.)

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Never believe a story about proposed legislation until that lawis actually passed.

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Christopher Carosa

Chris Carosa has been writing a weekly article and monthly column for BenefitsPRO online and BenefitsPRO Magazine since 2011 and is a nationally recognized award-winning writer, researcher and speaker. He’s written seven books, including From Cradle to Retire: The Child IRA; Hey! What’s My Number? – How to Increase the Odds You Will Retire in Comfort; A Pizza The Action: Everything I Ever Learned About Business I Learned By Working in a Pizza Stand at the Erie County Fair; and the widely acclaimed 401(k) Fiduciary Solutions. Carosa is also Chief Contributing Editor of the authoritative trade journal FiduciaryNews.com and publisher of the Mendon-Honeoye Falls-Lima Sentinel, a weekly community newspaper he founded in 1989. Currently serving as President of the National Society of Newspaper Columnists and with more than 1,000 articles published in various publications, he appears regularly in the national media. A “parallel” entrepreneur, he actively runs a handful of businesses, including a small boutique investment adviser, providing hands-on experience for his writing. A trained astrophysicist, he also holds an MBA and has been designated a Certified Trust and Financial Advisor. Share your thoughts and story ideas with him through Facebook (https://www.facebook.com/christophercarosa/)and Twitter (https://twitter.com/ChrisCarosa).