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Your employer offers a 401(k) retirement plan, but you are not participating in it. Why not?

Keep in mind that a 401(k) plan helps employees save for retirement in a tax-advantaged way. Plus, with many 401(k)s, employers kick in money for your retirement — but in most cases, you have to take action for that to happen.

A 401(k) is not a passive benefit plan. It needs attention and action — action that only you can take.

While it’s a lot easier to just sit tight with your decision not to participate in your 401(k), I’ll give you a list of questions to get you moving in the right direction. Only after you review these questions will I believe that your decision NOT to participate is right for you. (Convince me.)

Start here: Are you eligible to participate in the company’s 401(k)? Find out as soon as possible. Who should you ask? Your boss or your human resources department.

If you are eligible, what is the company offering you if you enroll in the plan? Find that out, too.

Is there an offer of money to help you save for retirement? How much? Is there a limit on how much money the employer is offering? What do you need to do to qualify for the top limit? Definitely find that out.

Ask about strings. Assume you “take” the money offered by the employer — are there any limitations? For example, what if you change jobs? Do you have to do anything special to keep the money your employer is offering? Find out.

Then, turn to taxes.

What 401(k) actions can you take (or not take) that will influence your W-2 income for income tax purposes?

What W-4 actions can you take that influence your regular paycheck if you do or don’t contribute to your 401(k) on a pre-tax basis versus an after-tax basis?

If you contribute to your 401(k) on a pre-tax basis, what would each dollar you contribute “cost” you after you factor in tax benefits?

What about the employer’s contributions? Find out if you get taxed on matches or other contributions.

After you get your answers, you’ll need to digest that information before deciding that it’s better NOT to participate. We’ll need to talk some more — in next week’s column.

In the meantime, I’d like you to think about this. Other employees who are participating in the 401(k) are benefiting from employer money if the program provides a match or other type of contribution.

For example, a report by Vanguard, an investment management company, titled ”How America Saves 2021” found that participants in a Vanguard defined contribution plan such as a 401(k), on average, saved an estimated 7.2% of their salary in 2020. For someone making, say, $60,000 a year, 7.2% equals $4,320.

Say the company matches 3% of what an employee contributes. That’s an additional $1,800, which puts the employee over $6,000 for the year in retirement contributions. If you are not participating, ask yourself why you think the company should be helping other employees with their retirements, but you would prefer not to be included.

Unless the company enrolls you automatically (many companies do — the Vanguard report found that 54% of Vanguard defined contribution plans had auto enrollment at the end of 2020), you are leaving your employer out of being able to help you achieve retirement security.

Are you sure you want to do that? Are you sure you want to “go it alone”?

Again, we’ll talk more next week.Let me know what you find out about your 401(k). You can email me at readers@juliejason.com.

Julie Jason, JD, LLM, is a personal money manager with Jackson, Grant Investment Advisers Inc. of Stamford, Conn., and an award-winning author. Send questions and comments to readers@juliejason.com.