Take Advantage of Your Company’s Match
Overview to participants of the benefits of taking full advantage of your company's match.
Investing in your 401(k) plan should be a no-brainer – especially if it includes an employer match. For you, that means free money.
Here’s How it Works
You invest in a 401(k) plan to help build your retirement savings. As an extra benefit, your employer may match your contribution up to a specified percentage of your salary. It’s literally FREE MONEY1 and one of the best ways to increase your balance.
Let’s look at an example of how it works. At the end of 2020, the average employer match for a 401(k) was 5% of annual pay. And according the the Bureau of Labor Statistics, the average salary for a U.S. worker was $53,380.
Average Worker’s Salary………. $53,380.00
X Average Match…………………………. 5%
Annual FREE Money…………….. $2,669.00*
That’s over $13,000.00 of free money is just five years! And that doesn’t even include investment growth potential.
*Assumes a dollar-for-dollar match for a participant contributing at least 5% of pre-tax salary to their 401(k) plan.
Investing in You
A 401(k) is you investing in your future. The sooner you begin contributing, the more opportunity for gains you will have. You may earn a return on the money you contribute, your employer’s match AND growth on the returns from your original investments.
So Do Yourself a Favor
Make sure you’re saving enough to at least equal your company’s match. Otherwise, you’re leaving free money on the table.
1 Some companies’ match is subject to a vesting schedule. Vesting describes the amount of company match contribution and earnings available to you. Refer to your Summary Plan Description to view your plan’s vesting schedule.