Take Advantage of Your Company Match
A company match is a huge financial benefit to you, the employee. It is essentially additional money deposited into your retirement plan. Many employers match at least a portion of the 401(k) plan. This means that your employer contributes a certain amount to your retirement savings plan based on your contribution.1 If your employer offers a matching contribution, take advantage of it. It is free money for you. If possible, contribute at least the amount your company will match. It is the best way to maximize your retirement savings.
The Impact of your Employer’s Match
If your budget allows, you will get the most benefit if you contribute up to the contribution limit. For 2023, the contribution limits are $22,500 for employee contributions and $66,000 for combined employee and employer contributions. If you are age 50 or older, you’re eligible for an additional $7,500 catch-up contribution ($30,000).
For 2024, the employee limit will increase $500 ($23,000) and the catch-up contribution will stay the same.2
If you need assistance understanding your company match or if you have questions, our advisors are here to help. Contact us at APAdvisors.com or at 866.515.2742.
1 https://www.investopedia.com/articles/personal-finance/112315/how-401k-matching-works.asp
2 https://iconsavingsplan.com/the-basics/start-saving/why-401k-plans-are-so-great/#:~:text=One%20of%20the%20most%20powerful,pay%20less%20in%20income%20taxes
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