Why Your 401(k) Match Could Be Worth More Than You Think
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We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. Learn more. Retirement 401(k) Share Share Close Mail Page URL https://money.com/401k-match-hidden-value/ Link copied! Why Your 401(k) Match Could Be Worth More Than You Think By: Marc Guberti Marc Guberti Marc Guberti is a personal finance writer who hosts Breakthrough Success, a podcast where he teaches listeners how to grow their businesses and achieve personal transformations. Has also written: Why Smart Retirees Are Embracing Passive Income Streams How To Stay Healthy and Wealthy in Retirement How Pets Can Improve Your Retirement The Retirement Budget Makeover: Trim Costs Without Sacrifice What No One Tells You About Social Security Timing See full bio Published: Dec 14, 2025 4 min read Getty Images A 401(k) match can make a big difference for your savings, and it’s important to take advantage. These matches are essentially free money, and the amount that you receive depends on what your employer offers and how much you yourself contribute. Read on for how the match works and how you can benefit. Must ReadExperts are Bullish on Gold — Here's How to Get InWarren Buffett on Market Volatility — and 3 Ways You Can Take AdvantageSide Hustles You Can Do In Your Spare Time How the 401(k) match works Employers can offer a variety of matching schemes. For example, your employer may match 100% of all contributions up to 4% of your annual income. If that’s the case and your income is $70,000, the employer will contribute up to $2,800 (as long as you also contribute that much). So while you may have thought you were just contributing $2,800, the total contribution actually amounts to $5,600. Another employer may offer a 50% match on all contributions up to 6% of your income. Save Smarter: Take control of your money with the Rocket Money budgeting app, one of Money's favorites Why you should prioritize the 401(k) match Receiving your full 401(k) match each year can help you build your nest egg over time. While it’s important to develop an emergency savings fund that can cover your expenses for three to six months, financial advisors will often advise that you also prioritize contributing at least enough to your retirement accounts to get the full match. Again, it’s free money. Everyone’s finances are different, which means the best strategy is one that works for your goals, risk tolerance and time horizon. For one person, it may make sense to contribute enough to a 401(k) to receive the match, then fund their cash reserves before contributing an additional amount to the retirement savings account. For others, it may make sense to max out their 401(k) contributions, receive the match and invest any leftover money in a taxable brokerage account. Gold Offer: Sign up with American Hartford Gold today and get a free investor kit, plus receive up to $20,000 in free silver on qualifying purchases What to know about vesting While an employer’s match will help your portfolio grow, there is a catch. Plans often have vesting schedules, which determine when you actually own your employer’s contributions. Some plans require that you work three years before receiving all of your matches. Others use a graded schedule, where you receive some of the employer’s match two years later and the rest of the match the following year, for example. The federal government requires that vesting take place within six years, but that could mean waiting up to six years until those contributions are actually yours. It’s a way for employers to retain employees, and it’s important to understand your plan’s vesting schedule in case you need to consider it before leaving a job. Some 401(k) plans offer immediate vesting. Extra Money: See how you can get up to $1,000 in stock when you fund a new active SoFi invest account Don’t leave money on the table Noticing an unused subscription that has lingered on credit card statement for six months feels like a waste, which is why some people meticulously review their budgets to ensure those types of mistakes don’t happen. Not contributing enough to your 401(k) to get the full match, similarly, leaves money on the table. Must ReadExperts are Bullish on Gold — Here's How to Get InWarren Buffett on Market Volatility — and 3 Ways You Can Take AdvantageSide Hustles You Can Do In Your Spare Time