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You're right.

But you mention that it's free money in your pocket later on.

The fact of the matter is that it's free money in your pocket right now. Because of your contributions you are paying out less in income taxes. Granted, the match is really nice, but you are still putting that money that was going to Uncle Sam in your pocket.

Also, you may benefit from a new tax credit this year for contributions to retirement plans, 401(k)s included. If your adjusted gross income (that amount at the bottom of the front page of the Form 1040) is below $50,000 you may be eligible for a credit on your tax return in addition to your normal tax break.

Also, many people forget that by virtue of contributing to a 401(k) plan they are making it more likely that they will be able to deduct contributions to an IRA account.

When my company started its 401(k) plan there was no match either. Now they have consented to match 25% of the first 6% of employee contributions. I've always contributed the max. I consider the match gravy.

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