401K match is basically free money. And leaving free money behind is one of the worst things you can do for the success of your financial life. There are some things to maximize the amount of money you will receive from your 401K. Here are some tips:
You need to know that it is a MATCH
This means you only will receive contributions if you contribute your plan yourself first. When you are saving some of your income for your 401K, your company can also contribute to your payment. However if you don’t do it, you company won’t too. So basically you are leaving large amount of free Moen behind by not contributing to your 401K.
There are many different 401K matches to learn
Some companies will contribute to employees 401K matching program, however some others don’t. So the first thing you should learn is if your company contributes.
Then the second thing you should learn is how much your company matches. The average company contribution is %2,7 of your payment.
There is also 50% match up to the first 6%. This means for every dollar your pay for your 401K, your company will contribute by 50 cents. However it’s only for the firts 6% of your contribution.
There is a dollar for dollar match ups to 5% too. In this case your company give a dollar for every dollar you put into your 401K account. Once it reaches 5%, your company won’t be contributing to your 401K until next year.
Never turn down the free money
This is very basic. If you fail to contribute to your 401K plan, then you are turning down the contribution of your employer, which is free money. Turning down free money is not a smart choice to make if you want a financial success