Kevin Busque, Guideline CEO, joins ‘Closing Bell Overtime’ to talk 401(K) investing, Robinhood’s retirement platform, and more. For access to live and exclusive video from CNBC subscribe to CNBC PRO:

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LEARN MORE ABOUT: 401k Plans

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When it comes to planning for retirement, one of the most effective tools available to individuals is the 401(k) plan. However, despite its numerous benefits, many people still choose not to participate, which according to Guideline CEO Kevin Busque, is the only wrong decision one can make.

In today’s uncertain economic climate, it has become increasingly crucial for individuals to take personal responsibility for their retirement savings. Gone are the days when company pensions and social security alone could guarantee a comfortable retirement. As a result, employer-sponsored retirement plans, such as the 401(k), have become integral to securing one’s financial future.

A 401(k) plan is a tax-advantaged retirement savings account offered by employers. It allows employees to contribute a portion of their salary on a pre-tax basis, meaning that the funds are deducted from their paycheck before income taxes are applied. This results in immediate tax savings and allows for potential investment growth over time.

One of the most significant advantages of a 401(k) plan is employer matching contributions. Many companies offer a matching program, whereby they contribute a percentage of the employee’s contributions into the account. This essentially provides a guaranteed return on investment and is essentially free money towards retirement savings.

Despite these benefits, many individuals still hesitate to participate in their employer-sponsored 401(k) plans, often due to misconceptions or a lack of understanding. Some may fear the complexities of investment choices within the plan, while others may feel that they cannot afford to contribute.

However, Busque emphasizes that not participating in a 401(k) plan is the only wrong decision one can make. He argues that the long-term financial implications of not saving for retirement far outweigh any perceived barriers or challenges. By not taking advantage of this opportunity, individuals risk leaving themselves financially vulnerable during their golden years.

Furthermore, Busque points out that participating in a 401(k) plan does not have to be complicated or financially burdensome. Most plans offer a range of investment options to suit individual risk tolerances, and contribution amounts can be adjusted over time. Starting with even a small percentage of one’s salary can make a significant difference in the long run.

In recent years, digital retirement plan providers, such as Guideline, have simplified the process further. These platforms offer convenient and user-friendly interfaces, making it easier for individuals to set up and manage their 401(k) accounts online. This accessibility removes most of the barriers that previously prevented people from participating in their retirement plans.

In conclusion, Kevin Busque, the CEO of Guideline, emphasizes that not participating in a 401(k) plan is the only wrong decision one can make. With the demise of traditional pension plans and the uncertain future of social security, individuals must take control and actively save for their retirement. The benefits provided by a 401(k) plan, from tax advantages to employer matching contributions, should not be underestimated. By starting early and contributing consistently, individuals can secure a solid financial foundation for their future retirement.