Employer 401(k) Match Guide
Understand how employer matching works and maximize your free retirement money
Employer matching is essentially free money added to your 401(k). The average employer match is worth $3,500-$5,000 per year. Learn how match formulas work, vesting schedules, and strategies to maximize your match.
How Employer Matching Works
When your employer offers a 401(k) match, they contribute additional money to your account based on how much you contribute. Common formulas include dollar-for-dollar match up to 6%, 50 cents on the dollar up to 6%, or tiered matching structures.
Common Match Formulas
- 100% match up to 3%: Employer matches dollar-for-dollar on the first 3% you contribute
- 100% match up to 6%: Most generous common formula, doubles your first 6%
- 50% match up to 6%: The most common formula, adds 50 cents per dollar on first 6%
- Tiered match: 100% on first 3%, then 50% on next 2%