Skip to main content


ROUTING # 281076730


What is 401(k) Matching?

Mar 16, 2022

You will be hard-pressed to find a single person who doesn’t like receiving extra money. 401(k) matching is your employer agreeing to match contributions up to a certain percentage of your salary! It can’t get better than that, right? Here are some things to keep in mind. 

Consult HR 

The first thing you’ll want to do is reach out to your HR department to see if your company offers a 401(k) matching plan and, if it does, how it works. Some companies will match a percentage of your salary. For example, if you earn $1,000 per paycheck and your employer matches your 401(k) contributions up to 5% of your salary, and you contribute 5%, your employer will match your contribution by also contributing $50 per paycheck to your 401(k) funds.  

Some employers will offer a partial matching plan. A common partial match provided by employers is 50% of what you contribute, up to a certain percent of your salary. For example, if you contribute $1,200 throughout the year, your employer will match $600. Or if you contribute 6%, your employer will match 3% of your salary. 

Each employer has its own 401(k) match rules. Make sure you understand the rules fully and talk to your HR department if you have questions. 

But What’s a Vesting Schedule? 

Many companies that offer a 401(k) matching plan also have a vesting schedule. The schedule determines how much of your employer’s contributions you get to keep if you were to leave the company. Your goal is to get to 100% vested. For example, a company may require you to work for them for five years before you become 100% vested. Again, talk to your HR department if you have questions about the schedule. 

Know Your Limits 

There is a limit to how much you and your employer can contribute to your 401(k) every year. These contribution limits are updated at the beginning of each year. Visit the IRS website to see this year’s limits. 

No matter what kind of 401(k) plan your company offers, you should take advantage of it! Don’t miss out on any available matched funds. It’s an easy way to pad your retirement savings and boost your overall compensation.