Answered

Why might an employee contribute to an employer's retirement plan that offers matching contributions?

A. To comply with mandatory regulations regarding retirement savings.
B. To avoid penalties for not participating in the company's benefits program.
C. To ensure job security by demonstrating financial responsibility.
D. To double the amount saved without increasing the employee's contributions.



Answer :

Final answer:

Employee contributions to an employer's retirement plan with matching contributions offer free money, tax-deferred growth, and can demonstrate financial responsibility.


Explanation:

Employee contributions to an employer's retirement plan with matching contributions are beneficial for various reasons:

  • Employer matching: Employers offering matching contributions essentially provide employees with free money, doubling their savings without increasing their contributions.
  • Retirement savings growth: Contributing to a retirement plan ensures financial security in the future by allowing for tax-deferred growth of the saved amount.
  • Job security and responsibility: By participating in the employer's retirement plan, employees demonstrate financial responsibility and may enhance their job security.

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