How Much Money Are You Losing Out on Your Employer’s 401k Match?
A recent study concludes that the average worker loses out on more than $1,300
in missed employer matches because of not contributing enough to their company-provided 401k plan. It is estimated that 92% of employers that offer a 401k plan match employee contributions, according to Aon Hewitt.
According to this article
, 1 out of 4 employees miss out on receiving their company’s full 401k match because they do not contribute enough to their 401k. To put this in context, US employees miss out on a cumulative contribution match that adds up to $24 Billion
According to InvestmentNews
For the typical employee, failing to receive the full company 401k match leaves $1,336 of potential free money on the table each year. That equates to an extra 2.4% of annual income not received. Assuming a 4.4% annual rate of return, the forfeited matching funds could amount to nearly $43,000 over 20 years.
Who are the employees most likely to miss out on their company’s generosity? They typically fall in two categories: younger employees and those who do not get financial advice whether at work or on their own. We launched our free services at 401k Tutor precisely because of the latter reason. Our goal is to provide you with the necessary basic educational tools and free asset allocation models that will empower you to become a better investor. Start now.