Saving for retirement is essential. If you don't build yourself a solid nest egg, you might struggle financially once you stop working and the paycheck you once relied on ceases to hit your bank account.

And if you think you're set to retire on Social Security alone, think again. Those benefits will only replace about 40% of your pre-retirement income if you're an average earner, and most seniors need roughly twice that much money to live comfortably.

That's where your personal savings come in, and if you have the option to contribute to a 401(k) plan through your employer, it pays to do so. One advantage 401(k)s have over IRAs is that employers often put matching dollars into them. The result? Free retirement money for you.

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Source Fool.com